Update - Flooding in Midwest and Impact to Rail Operations

17 June 2008

APL utilizes the Union Pacific Railroad as the primary carrier to and from the US Midwest. The following is pertinent information from a Union Pacific communication on delays in rail movement due to flooding in the Midwest:

"Union Pacific track in parts of the Midwest continues to be impacted by the heavy rainfall over the past couple of weeks, resulting in stream and river flooding that has washed out or weakened bridges and large sections of main line track. The most significant impact of the flooding on the Union Pacific system continues to be in the state of Iowa where 83 of the 99 counties have now been declared disaster areas. The National Weather Service continues to have much of the Midwest under flood warning."

Main line track in several UP subdivisions has been taken out of service intermittently over the past several days due to high water and washouts, including the River Subdivision between Kansas City and St. Louis, and on the Adams Subdivision between Chicago and Minneapolis and St. Paul. Currently, a section of our Overland Route on the east-west main line near Cedar Rapids remains out of service, along with the north-south spine line between Kansas City and Des Moines.

These track outages continue to impact cargo that is moving to or from the west coast through Chicago.
The UP is endeavoring to reroute cargo across other available lines, however, this results in congestion on those routes. Customers should anticipate at least 72 hours delays associated with cargo moving in these corridors.

Union Pacific continues to have embargoes in place this week for traffic moving across parts of our east-west main line across Iowa, with a permit application process in place to offer a regulated flow of traffic as their limited operation returns to normal.

We currently anticipate re-opening the east-west main line later this week, as water levels recede. At that point, Union Pacific crews will begin to work off the backlog of traffic as engineering continues repairs to track, yards and signal systems. While some repair work may continue over a few weeks, we anticipate that crews will be able to quickly restore service to normal levels, allowing us to lift the embargoes currently in place.

We encourage customers to visit the link below to obtain continued further updates on the situation from the Union Pacific.

http://www.uprr.com/customers/embargo/list.shtml