Union Pacific is "pausing" construction of its new $550 million rail yard in Texas.
The Omaha, Neb.-based company said it will shift the money it committed this year to the Brazos project to instead make improvements to its 760-mile line running from El Paso to Los Angeles.
When the railroad began the ambitious project last year, it was to be the single largest capital project in the company's 156-year history. The yard, designed for expected growth in rail cargo moving through Texas, was intended to be where long trains would be broken down and sent to their next destinations.
Union Pacific and other railway companies are moving toward strategies that run fewer but longer trains on tighter schedules to cut operating expenses. That meant the Brazos yard wasn't needed immediately.
The company hired Jim Vena earlier this year to implement its long-train strategy. During a call with analysts Thursday evening to discuss Union Pacific's first-quarter results, Vena said locomotive productivity is up considerably this year.
"Our train size jumped up 7%. That's key," he told analysts. "That tells us that we're moving more railcars on the same number of trains."
Union Pacific reported a 6% jump in profit for the first three months of the year, despite contending with severe weather along the Missouri River and a decline in freight hauled. Its quarterly earnings of $1.4 billion compared with $1.3 billion for the same time frame last year. Its revenue fell 2% to $5.4 billion.
The 1,875-acre Brazos facility is in Robertson County, about 125 miles south of Dallas. It's where seven Union Pacific rail lines converge in Hearne. The company's 32,400 miles of track connect 23 Western states.
It also operates a 360-acre intermodal terminal in Wilmer, just south of downtown Dallas.
