Union Pacific previously announced it would extend their “catastrophic embargo” throughout parts of the Midwest, which caused some shippers to express their frustration. Leading the STB to keep an eye on the railroads’ use of embargoes.
How Did We Get Here?
Back on December 29th, UP issued the embargo throughout the Minnesota, Iowa and Wisconsin regions. The reason for the initial embargo in December was due to the severe winter weather conditions.
Additionally, the railroad argues that even though it’s taking longer to restore the network, they believe the embargoes are necessary due to the weather conditions – the railroad sent a letter to their customers on January 11th further detailing their thoughts on the matter.
Recently, eight members of Congress representing Minnesota, Iowa, and the Wisconsin regions, asked the STB to direct UP to lift the embargo. They contend that these cold temperatures are typical in these regions during this time of year and the railroad has successfully navigated similar weather events in the past.
As of this morning – Union Pacific has canceled the embargo that was related to the severe weather events throughout Minnesota, Iowa, and Wisconsin.
The Use of Embargoes
Embargoes are a temporary way to control traffic movements when the railroad determines accumulations, threatened congestion or other disruptions with operations warrant temporary restrictions against such movements.
The use of embargoes have been a hot, and rather controversial topic in recent months.
More specifically, in mid-December UP paused the use of embargoes on its freight network and stated that they would be taking a hard look at their use of congestion-related embargoes. This came after reports from shippers’ that stated the embargoes were causing issues to their operations and adding to supply chain challenges.
Looking Ahead
Should you have any questions regarding this and how it could impact your shipments, please reach out to our team today.
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