Trucking companies are telling Union Pacific Railroad are indicating they want to push a greater share of their freight onto trains for long-haul transport, says James R. Young, UP's chairman, president and CEO.
"Our discussions with many of our trucking partners indicate they have a very strong interest in improving the amount of business they move intermodally." Young told analysts on a conference call about UP's fourth quarter earnings.
He said rising diesel prices will help push more freight to trains in the year ahead, given the expected rise in highway fuel costs, and "that brings added pressure on the cost of moving on the highway."
UP's marketing chief, Executive Vice President Jack Koraleski, said UP and the intermodal industry can also benefit from tightening safety standards in the trucking industry. He said some estimates are that new federal rankings of trucking firms by highway violations of their drivers could drive up to 400,000 drivers out of the industry, and "that would be a real plus for us."
But Koraleski said the timing for that effect is not clear, whether it may take place in 2011 or later.
UP's intermodal revenue grew 30 percent in 2010 to $3.2 billion, rising faster than the 19 percent gain in intermodal loads. Average revenue per intermodal car rose 9 percent over 2009, including a 13 percent year-over-year gain in the fourth quarter.
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