Union Pacific's profit grows 9% as the railroad delivers more but results fall short of Wall Street
Union Pacific’s third-quarter profit grew 9% as West Coast imports surged and drove the railroad’s total volume up 6%
OMAHA, Neb. — When labor disputes disrupted operations at Canada's two largest railroads and ports up and down the East Coast, many companies shifted more of their shipments to the West Coast forcing railroads like Union Pacific and the ports there to react quickly.
Union Pacific said Thursday that the result was an unanticipated 33% jump in the number of shipping containers filled with imports that it delivered in the third quarter, which helped drive a 6% increase in the railroad's total volume and a 9% jump in profits.
The Omaha, Nebraska-based railroad had to scramble to handle the additional freight by quickly repositioning locomotives and other equipment while paying some workers more overtime. Union Pacific and the L.A./Long Beach ports in southern California handled the surge without significant delays in how quickly ships were unloaded.
“That’s a big jump at one time. It really is,” CEO Jim Vena said in an interview. “And I think it shows the way we are managing the railroad that we know we need to have some asset buffers.” For instance, he said the railroad tries to keep about 500 of its stored locomotives ready to go at any time to help handle unexpected shifts in shipments.
“I thought the railroads and the entire supply chain did a great job,” Vena said. The other major Western railroad, BNSF, would likely also have seen a big jump in shipments, but their results won't be public until their parent company, Warren Buffett's Berkshire Hathaway, reports its earnings on Nov. 2.
Even though those intermodal shipments are less profitable than some of the other goods Union Pacific hauls, the
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