Union Pacific Business Case Study

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  • Topic: Union Pacific Railroad, Class I railroad, BNSF Railway
  • Pages : 5 (1200 words )
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  • Published : May 8, 2006
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The purpose of this is to display my research for the first assignment of BUS 1100 class. The assignment was to research a designated Fortune 500 company and answer allocated information about the company. My assigned company was Union Pacific. Industry Trends

Union Pacific Corporation (NYSE:UNP) is one of America's leading transportation companies. Its principal operating company, Union Pacific Railroad, is the largest railroad in North America, covering 23 states across two-thirds of the United States. The primary long-term trend in commercial transportation is the ongoing improvement of speed, service, flexibility, and area served, with costs declining as a proportion of the value of delivered goods. Shipments that, hundreds of years ago, would have taken several months for delivery and cost a fortune, now can be delivered overnight for a reasonable sum. Each segment of the transportation industry plays an important role in delivering these improvements. More recently, the process of transportation has been beneficial from the internet. It is now easier for companies to send and request supplies and packages. The internet also makes easier to track and monitor the transportation of goods. In the overall transportation industry, we believe that long-term growth and market share will be determined primarily by a segment's exposure to lower-value bulk freight versus higher-value freight. We expect air freight, with its relatively high value and time-intensive freight profile, to gradually grow in market share; we expect trucking, with its blend of bulk and general freight, to see steady market share; and we expect railroads, with bulk freight representing the majority of business, to grow more slowly and thus gradually lose market share. For railroads to capture a larger part of the freight market, railroads must improve service further. Although intermodal service is generally not currently acceptable for shippers working with narrow delivery windows, it is not hard to imagine a day when intermodal offers the same real-time, online shipment tracking services available from ground package carriers, inspiring the confidence of the shipping public. To improve intermodal service, terminals may have to be enlarged to ensure more fluid movement of trains, and new freight cars, locomotives, and signaling systems may be purchased. Ways to shorten transit times are to double- and triple-track mainlines, increase miles of sidings, and cover more miles under centralized traffic control. (Sidings are short stretches of track onto which a train temporarily moves so that another train, coming from an opposite direction, may bypass it.) Ratios and Statistics

Ton-miles. This quarterly calculation, issued by the Association of American Railroads, an industry trade group, measures total industry shipment weight times the average length of haul. It is the best measure of rail freight movement. Standard & Poor's estimates that ton-miles rose 2.2% in 2005. For 2004, US Class I railroad ton-miles increased 7.2% to 1.663 trillion ton-miles; for 2003, volume rose 2.9% to 1.551 trillion ton-miles. Originated tonnage. Originated tonnage is another measure supplied by the Association of American Railroads. It is the total volume handled by freight railroads. Standard & Poor's estimates that originated tonnage rose to 1.88 billion tons in 2005. Class I railroads originated 1.844 billion tons in 2004, up from 1.80 billion tons in 2003, 1.77 billion tons in 2002, and 1.74 billion tons in both 2000 and 2001. Because the growth rate for ton-miles (measuring both distance and volume) has outstripped that for originated tons, it is apparent that rail traffic growth has come primarily from hauling freight longer distances. Chief Executive Office...
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