(The following story by Stacie Hamel appeared on the Omaha World-Herald website on February 5.)
OMAHA, Neb. — Jim Young spoke Thursday morning at a New York investment conference, his first since being named president of Union Pacific Railroad last week.
Young discussed the company’s strategies and financial results at the Goldman Sachs 19th annual Transportation Conference.
The coming year is one of growth opportunities as more shipping converts from barge and truck to rail, he said.
“I look at our competitors in terms of sheer growth off the highway,” he said. “What I want to be in is a market where I have the premium rail route, and it’s dominated by trucks.”
The railroad has created a new product, Blue Streak, which offers guaranteed shipping in conjunction with United Parcel Service. The combination of service and price is an example of leveraging the yield, he said.
U.P., the largest railroad in North America, also has partnered with Schneider National, a truckload carrier.
U.P. expects revenue to increase from 4 percent to 6 percent in 2004, including a cautious 1 percent pricing increase, Young said. On the expense side, he said fuel costs will continue to be high.
For the next three to five years, Young said, he expects continued revenue growth, an increased operating margin in the mid-20s and to earn above the cost of capital, which is the basic return that investors and lenders expect from their investment in the company.
Young addressed shortages among train service workers that have led to service slowdowns in some areas.
“We’re solving that problem now,” he said.
One aspect, he said, is implementing remote-control locomotives in rail yards. U.P. had to suspend implementation in late 2003 because of the staffing shortage.