Union Pacific Network Update

Announcement Number: CN2014-34
Categories: General Announcements
Posted Date: September 24, 2014

To Our Customers,

As we prepare to enter the fourth quarter, our rail network continues to strengthen, and we have solid plans in place to handle the upcoming winter season.

Carloadings & Velocity
We continue to see strong demand across most of our franchise. In August, our seven-day carloadings averaged 192,620, which is our highest level since 2007. We are handling that demand while steadily improving our service. Our reported AAR velocity for the week ending Sept. 19, 2014, is 23.8 miles per hour, improved from our weekly low point of 23.1 in July. We were able to achieve velocity improvements despite experiencing several major service interruptions within the last 60 days — washouts and mudslides in New Mexico, washouts in southern Nevada and an earthquake in northern California. We expect continued steady improvement for the remainder of the year.

Crews & Locomotives
Two major drivers for improving our network are additional train crews and locomotives. In response to higher overall demand this year and to respond to the significant weather events that have affected our service throughout the year, we have added both crews and locomotives. Since last fall, we have increased our Train, Engine and Yard (TE&Y) workforce by more than 800. We also have increased hiring to roughly double our original plan. We now expect to hire about 3,200 TE&Y employees for the full year to cover attrition and growth. Of the 3,200 TE&Y employees, about half will be assigned to our Northern Region, including more than 350 in the Chicago area alone. By activating stored locomotives and acquiring new ones, we have increased our active fleet by 850 locomotives since last fall. Our strong pipeline of crews and locomotives are expected to contribute to continued network improvement.

Tower 55 Project Completion
Another driver of our improved performance is the completion of the Tower 55 project near Ft. Worth, Texas. We worked with other railroads and city and regional governments to rebuild and upgrade the nation's busiest rail intersection. Tower 55 can now accommodate up to 135 trains per day, compared with a maximum of 110 a year ago. The new configuration will alleviate congestion and enhance train flow. We are proud to say that this work was completed two weeks ahead of schedule and already is having a positive impact on our network. Additionally, most of the crews that were helping with this project are being sent back to their home bases where they can contribute to improving service across our network.

Winter Weather Plan
Last winter produced record snowfall and cold weather across many parts of the country and hit our operations hard across the Northern Region, particularly in the Chicago area. This year, we began our winter planning process two months earlier than normal, and we are making improvements based on the lessons learned from last winter. At seven locations across our Northern Region, we will establish 24-hour winter response command centers that will be open from the end of November through early April 2015. Each command center is taking a bottom-up approach to reviewing winter weather response plans to ensure we have resources and response plans in place across the network. The command centers will allow us to respond quicker when we experience winter operating issues.  We also will be working closely with other Chicago-area railroads to trigger operational changes when weather conditions warrant. While we hope for more normal conditions, we are preparing to meet the challenges of a harsh winter.

We continue to challenge ourselves to safely and efficiently provide the service our customers need. If you have any questions, please contact your Union Pacific Representative. Thank you for your business.