The Rails: Trouble Behind, Trouble Ahead

UP's pileup is costing billions--and may nudge up prices

For most Americans, the service meltdown on the Union Pacific Railroad seems like an obscure event--like a war between two far-off countries whose names one can't keep straight. But after more than three months of tying up deliveries of everything from scrap metal to flower pots, UP's struggle is sending aftershocks through the economy. The Federal Reserve, in its October "beige book" report, says that in parts of California, "generally positive views of the economy were tempered by many reports of shipping bottlenecks." In the Pacific Northwest, the Fed reported that "capacity constraints...particularly in rail transportation, could restrain further growth."

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