Railroad giant Union Pacific Corp. said today it will transport all 2.5-million General Motors Corp. (GM) vehicles moved by rail in the western U.S., taking business from rival Burlington Northern Santa Fe Corp. The announcement comes a day after Union Pacific and DaimlerChrysler AG agreed to form a logistics company that will manage as many as 3-million Chrysler Group vehicle shipments by train and truck.

Union Pacific spokesman John Bromley said the railroad agreed to build or expand seven vehicle distribution centers to allow 24-hour handling of GM’s shipments as part of a multiyear contract. The agreement affects deliveries to California, Arizona, New Mexico, Minnesota and other Western states, and includes shipments that were made by Burlington Northern, the second-largest U.S. railroad, Union Pacific said.

Meanwhile, DaimlerChrysler yesterday said it has formed a new company with Union Pacific, Insight Network Logistics. The company will track vehicle shipments by the Internet from assembly plants to dealers to reduce vehicle delivery time of factory-built Chrysler Group products in North America.

Insight Network Logistics will be based in the Detroit area and is expected to begin providing logistical services by early in the fourth quarter. Its operations will employ 20 persons and use Union Pacific's VinVision technology.