Union Pacific Shows Signs of Improvement

Morgan Stanley reports that the UP has recently showed an average train speed of 21.8 mph, for the 12th week of the year, which is a 2% gain, year-over-year. Too, terminal dwell hours improved 7% and cars on-line were up 2.4%. As the brokerage firm notes, one-week figures are hardly a trend, but it feels that the improvements are a sign that the worst of the railroad’s operational issues are behind it.

UP will be spending $1.3 billion this year in track improvements across its 33,000-mile system. The largest railroad in North America, UP covers 23 states across the western part of the country.

The railroad provides these statistics about its track 2005 improvement efforts. Crews will remove and install 4.4 million ties, of which 3.7 million are wood; 355,000 are concrete; and 215,000 are composite. The UP will spread 6.8 million tons of rock ballast, replace 1,055 miles of rail and surface 7,800 miles.

Additionally, the railroad will spend $295 million to increase capacity on its Sunset Route in Arizona and in the North Platte, Neb. area. The work will include construction of eight new side tracks. UP will spend an additional $220 million on support tracks for a new Toyota plant in San Antonio, Tex., intermodal yards I Wilmer, Tex. And Salt Lake City, Utah and support tracks for ethanol plants in Minnesota and Iowa.

The railroad has reached an agreement with the Texas Department of Transportation to relocate rail lines from crowded city centers. The UP that certain of the projects can be handled through public-private partnerships.

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