The Union Pacific Railroad is a Class I freight-hauling railroad that owns 8,300 locomotives for use over approximately 32,200 miles routes in 23 western U.S. states
As one of the largest railroad companies in the U.S., what should our readers know about Union Pacific and your current operations?
Union Pacific operates across 23 states, covering more than 32,000 miles of rail with the support of 33,000 dedicated employees. At its core, our operations focus on customer centricity, ensuring that freight is delivered efficiently and reliably. To support this, the company invests between $3 to $4 billion annually in its operations. About half of this investment is directed towards renewing existing infrastructure, ensuring that the service product remains robust and dependable. This includes replacing track and ties to maintain a strong operational foundation. The other half of the investment is dedicated to technology and growth, including building new facilities and expanding capacity to meet current and future demand. This growth strategy includes creating new intermodal terminals and repurposing existing ones, particularly in high-demand areas like the LA basin, Phoenix, and the Twin Cities.
Given you are spending billions on it, what does the renewal of assets involve?
Renewing assets at Union Pacific involves replacing existing infrastructure components such as track and ties, which are fundamental to the company's service product. For instance, this year alone, we plan to replace approximately three and a half million ties and install over 300 miles of new rail. These efforts ensure that we maintain a high standard of safety and efficiency across our extensive network.
With such a vast network across over half of the U.S., how do you decide where to expand your railroads?
Deciding where to grow the railroad network involves a combination of responding to customer demand and strategic foresight. Growth is often driven by customers who either want to expand existing facilities or build new ones. We also provide “Focus Sites,” a portfolio of industrial parks across our network with utilities already in place, providing optionality to customers who may not have used rail in the past. In addition to customer-driven growth, our strategy team focuses on long-term trends in various markets, looking ahead several years to anticipate where growth will occur. This proactive approach allows the company to plan for future needs, such as identifying where new sites should be developed to support the growth of both raw materials and finished goods markets. An example of this strategic planning is evident in the Gulf Coast, where we closely collaborate with customers to support growth opportunities from New Orleans to Brownsville.
Why do you think the public is so focused on the safety record of railroads?
The public's interest in railroad safety is driven by the essential role that railroads play in the economy. Almost everything in our lives, rather in raw or finished format, has been on a train at some point, and the public understands the importance of railroads. The industry's consistent improvements in safety have also heightened expectations, leading the public to expect continuous progress. In the case of incidents like East Palestine, despite a 99.93% success rate in safely transporting hazardous materials, the industry recognizes the need for constant vigilance and improvement. We use technology like wayside detectors to monitor and address potential issues in real-time, ensuring that risks are mitigated proactively.
How is Union Pacific addressing the trend of localized supply chains, particularly in relation to the railroads?
We are well-positioned to address the growing trend of localized supply chains, thanks to its extensive network and strategic partnerships. With more than 32,000 miles of track and 273 terminals, the company can effectively cover a vast area west of the Mississippi, as well as regions east of it through partnerships with Eastern railroads. This reach allows us to be a key player in discussions about localizing supply chains, offering solutions that meet customers’ needs.
We are actively engaged in nearshoring discussions, particularly with customers looking to increase their presence in Mexico. We are the only railroad with access to all six interchange points with Mexico, facilitating the movement of a million carloads annually through these points.
Which industry value chains will be key growth areas for Union Pacific in 2025, and which ones might be unexpected?
Intermodal will continue to be a significant growth engine for us. This includes expanding existing terminals, building new ones, and offering new services that cater to time-sensitive shipments. For example, we introduced a service from Mexico to Chicago that reduces transit time by three days, underscoring our commitment to meeting customer needs efficiently. An unexpected area of growth might be renewable diesel. The railroads have a history with ethanol, and now we see renewable diesel following a similar trajectory. As efforts to reduce greenhouse gas emissions intensify, the demand for transporting renewable diesel is growing, particularly in states like California, Illinois, and Texas.
How is technology transforming Union Pacific's locomotives, and what opportunities does emerging tech offer?
The technological evolution of locomotives over the past 50 years has been remarkable, especially regarding the internal systems that drive safety and efficiency. Today, we are investing heavily in hybrid technologies, integrating battery power into our diesel fleet, which marks a significant step toward sustainability. In addition to propulsion, advancements in control systems are crucial. Investments in systems like Positive Train Control and Energy Management have enhanced the reliability and efficiency of our operations. These technologies allow us to keep our network fluid, enabling more trains to operate safely within the same infrastructure. As these systems continue to evolve, we foresee even greater efficiencies and safety advancements.
Why do railroads matter, especially in a world striving for sustainability?
Railroads are essential because they transport goods that other modes of transport simply cannot handle, whether due to physical constraints or capacity limitations in the national infrastructure. For example, replacing just one-grain train would require hundreds of trucks, a feat not feasible on our already congested highways. From an environmental perspective, rail is the most efficient mode of land transport, capable of moving one ton of freight more than 500 miles on a single gallon of diesel. Our ongoing investments in modernizing our locomotive fleet, such as the $1 billion we are spending on our modernization program, not only enhance efficiency but also significantly reduce greenhouse gas emissions.
What key milestones or future expansions should Union Pacific's followers be aware of?
We have several exciting projects in the pipeline, including the construction of a new intermodal terminal in the Kansas City area. This investment is a testament to how we strategically approach our growth. Your readers can expect more announcements as we continue to expand our infrastructure to support the growing demand for rail services. The future looks bright for Union Pacific, and we hope that those who have not yet considered rail will see this as an opportunity to explore what we have to offer.
