2016-2017 Grain Equipment Program

Announcement Number: AG2016-24
Categories: Domestic Corn Feed Grains and Soybeans,Export Corn Feed Grains and Soybeans,Meals and Oils,Wheat and Food Grain Products,Wheat and Food Grains,Livestock and Feed
Posted Date: June 21, 2016

Dear Valued Customers,

Union Pacific is excited to announce the following modifications to our 2016-2017 Grain Equipment Program. These changes are designed to enhance UP’s shuttle and Guaranteed Freight products by providing more flexibility to help you plan and manage your rail freight needs for the upcoming crop year.

• Six Month Shuttles – Union Pacific will be offering short-term, six month shuttles starting September 1, 2016. These shuttles will be limited in number and available on our auction site. Six month shuttles will start at a minimum bid of $100 per car and are not eligible for the trip incentive; however, load/unload incentives will be available. Early cancelation liquidated damages will be assessed at $100,000 per month.

• Reduced Cancelation Terms for Year Long Shuttles – Liquidated damages will be reduced by 50% for customers who pay an auction premium of $200 or more per car on year long contracts.

Example: A customer pays a $200 per car bid premium for a year long shuttle and decides to cancel with 3 months remaining on the term. Therefore, the customer is entitled to reduced cancelation terms as follows: $65,000 per month times 3 months equals $195,000 times 50% reduction equals $97,500 cancellation damages that will be due.

• Guaranteed Freight – Union Pacific will provide customers an opportunity to increase their Guaranteed Freight fleet annually (one time during the month of September), if Union Pacific determines equipment availability exists, as opposed to the customer waiting for the three-year term to terminate.

Additional details regarding these enhancements will be published in General Rule Items 70 and 80 in our public tariffs or by contacting your Sales Representative. Union Pacific is committed to providing enhanced transparency on our grain equipment program and is looking forward to assisting you with your ongoing rail freight needs.
 

If you have any questions please contact your Union Pacific representative.