(The following story by Joe Ruff appeared on the Omaha World-Herald website on May 27, 2010.)
OMAHA, Neb. — Stock market turmoil, concerns about European debt and slower growth expected in China have not directly affected customers of freight railroad Union Pacific, probably because they’ve adopted a cautious approach as the country recovers from recession, U.P. chief financial officer Rob Knight told analysts Wednesday.
“Folks are reluctant to rebuild inventory, understandably, and they are going to be very lean in terms of how much inventory they do build,” Knight said at a conference in New York. “I think what’s happening right now around the world is just more reason to continue to be cautious.”
After growing through the latter half of 2009 and into 2010, shipments on the Omaha-based railroad have leveled off since February to about 165,000 carloads each week, Knight said. The railroad could handle about 200,000 carloads per week, and it had that kind of traffic a few years ago, Knight said.
Railroads haul many of the nation’s goods and can be a sign of strength or weakness in the economy. Shipments of basic building blocks such as steel, lumber and stone have risen, Knight said.
“We are hopeful that we are seeing signs of life in the movement of construction-related material.”
Overall, shipments on Union Pacific lines through the first quarter ended in March were up 13 percent over last year, and midway through the second quarter volume was up 17 percent, Knight said.
Automotive shipments were up 57 percent as of May 22. Increases in shipments in other sectors: industrial products, up 28 percent; intermodal, 20 percent; chemicals, 14 percent; agriculture, 6 percent; and coal, 5 percent.