Mark Szakonyi, Associate Editor | Jul 02, 2012 6:27PM EDT
Union Pacific Railroad CEO and President Jack Koraleski said the railroad is on track for annual year-over-year volume growth and record 2012 profit.
Although he expects slow and continued growth in the U.S. economy, Koraleski expressed concern about how high unemployment could drag down overall consumer buying power.
The largest U.S. railroad by network saw flat volume growth in the second quarter, as growth in non-coal business offset weak coal traffic. Koraleski said he thinks the coal slump, which has pulled traffic down nearly 11 percent year-over-year industry-wide, has bottomed out.
“For one thing it’s really hot outside. That’s good. We have seen customers bring coal sets to the railroad and say, 'We want to put them in service again.’ We have actually seen an uptick in our car loadings for coal,” Koraleski said in CNBC interview on Monday as part of the railroad's celebration of its 150th anniversary.
The top drivers of Union Pacific volume growth are oil shipments out of the shale formations and the related traffic of steel pipes and frac sand. Domestic intermodal volume, along with shipments of automobiles and industrial chemicals, are also strong.
Despite the threat of pipelines cutting into railroad’s oil shipments, Koraleski said UP is in the business for the “long haul.” That's because shippers like that railroad deliveries are twice as fast as via pipeline, and the rail network allows them to reach more sites, he said.
Contact Mark Szakonyi at mszakonyi@joc.com. Follow him on Twitter @szakonyi_joc.
Although he expects slow and continued growth in the U.S. economy, Koraleski expressed concern about how high unemployment could drag down overall consumer buying power.
The largest U.S. railroad by network saw flat volume growth in the second quarter, as growth in non-coal business offset weak coal traffic. Koraleski said he thinks the coal slump, which has pulled traffic down nearly 11 percent year-over-year industry-wide, has bottomed out.
“For one thing it’s really hot outside. That’s good. We have seen customers bring coal sets to the railroad and say, 'We want to put them in service again.’ We have actually seen an uptick in our car loadings for coal,” Koraleski said in CNBC interview on Monday as part of the railroad's celebration of its 150th anniversary.
The top drivers of Union Pacific volume growth are oil shipments out of the shale formations and the related traffic of steel pipes and frac sand. Domestic intermodal volume, along with shipments of automobiles and industrial chemicals, are also strong.
Despite the threat of pipelines cutting into railroad’s oil shipments, Koraleski said UP is in the business for the “long haul.” That's because shippers like that railroad deliveries are twice as fast as via pipeline, and the rail network allows them to reach more sites, he said.
Contact Mark Szakonyi at mszakonyi@joc.com. Follow him on Twitter @szakonyi_joc.