Silence Is Not Opposition

To Our Customers,

There is no better way to take the pulse of the transportation industry than by meeting directly with you, the customers we serve. The perspectives we gain in those conversations go far beyond what we can learn from regulatory filings, surveys or trade press headlines. That is the exact reason I have spent more than 70% of my time on the road this year, meeting with more than 55 customers directly and mostly at their headquarters, not ours. Add in 20 conferences, association meetings and Union Pacific-hosted customer events, and that gives me an opportunity to do a lot of listening. My pace isn't slowing, because those conversations are the most reliable information we have about what this merger means for your business.

Here is the first thing these interactions have taught me. A customer who has stayed quiet, or who has taken a neutral position publicly, is not a customer who opposes this transaction – even if they belong to an association who has. Many of you have told us plainly that you are still evaluating, that you are waiting for answers or that you would rather not take a public position while the proceeding is active. Asking for a thorough review is a reasonable place to be. We do not read silence as opposition, and neither should anyone else.

Customers who have filed public support letters now represent more than 30% of Union Pacific's volume. That counts only those who have chosen to speak publicly, not the many others who are still weighing the merger quietly. But what stood out most about the letters filed with the Surface Transportation Board (STB) since August was what was in them. Customers of every size, across multiple industries, put specific, first-hand benefits on the record. Each found its own opportunity in the same combination.

• Take our fertilizer customer in Idaho. Their super phosphoric acid loads at roughly 220 degrees and begins to gel as it cools; once it does, it cannot be unloaded. The physics of their product determine how far east they can sell, and today the interchange sets that limit. As they told the STB, the interchange is not a cost line. It is a market access constraint.
• One of the country's largest bioethanol producers put it in market terms. Roughly 70% of the volume they originate with us comes from the Mississippi River watershed, where two-line service to the East is uncompetitive today. In their words, single-line service would enable them to "reach new customers, move rail cars with less empty mileage and ultimately lower prices for end consumers while supporting rural economic growth."
• The largest PVC producer in the U.S. reiterated that the merger will open opportunities in the East while also improving safety. Rail is already one of the most secure ways to move hazardous materials, and eliminating interchanges takes handoffs out of the move entirely. They also told the Board they have heard our competitors' objections and disagree with them.

A refrigerated food customer. A lumber customer. An automotive customer. A salt customer. Diesel and jet fuel customers. Every one of these letters is public, and each one spells out what this combination means for that business. I encourage you to read them.

That is what a single association filing cannot capture. Trade associations do important work and we respect it. But an association files one position, and the members who disagree, or who simply have not finished evaluating, do not appear anywhere in that filing. We have heard from customers who are not opposed even where their association filed against us, and from others who backed a filing because they want a thorough review, not because they are opposed to this transaction.

I will keep saying this as long as it needs saying: a quiet customer is not an opposed customer, and an association filing is not a headcount. I bring this up for a simple reason. We have direct relationships with our customers, and our job is to help you win. Our trains are spotted at your facilities, not at the association's headquarters. We move plastic from the Chemical plant, not the American Chemistry Council (ACC). When it is time to plan your next expansion, we sit down with you directly. We do not stop to wonder what an association thinks about the merger.

So, I will keep listening. If you are still evaluating, tell me what you are weighing. If you have questions we have not answered, ask them. And if what you want is a thorough, fact-based review, we want that too, because we believe the facts are on our side.

Sincerely,

Kenny Rocker
Executive Vice President, Marketing & Sales

You can get the latest official news, updates and perspectives on the Union Pacific–Norfolk Southern combination here: www.up-nstranscontinental.com