Union Pacific (UNP) 24 Oct 242024 Q3 Earnings call transcript

Greetings, and welcome to Union Pacific's Third Quarter Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded, and the slides for today's presentation are available on Union Pacific's website. It is now my pleasure to introduce your host, Mr. Jim Vena, Chief Executive Officer for Union Pacific. Thank you, Mr. Vena.

begin. now may You

in fall morning Omaha, beautiful day. nice Rob,

Officer, you us Quarter President today good Chief I'm morning, our discuss of joining Vice thank and Financial our Kenny by Third So Marketing to and Executive Rocker, Gehringer. for Union President in of Omaha, Hamann, Eric Sales; Jennifer our joined and Vice Results. Executive Pacific's Operations,

a our the an progress you're over hear year to from operational team, to under excellent we've today pleased very little of you'll quarter and do success. where our financial industry As results seeing a the we compared the job capturing made service started leads in sit ago. strategy lead where third to I'm with how safety, that And excellence. we

quarter XX% Now income quarter third starting and earnings of let's reported #X. per a improvement on net Pacific Union This X% improvement. third share results, a discuss morning, XXXX of billion, $X.X Slide $X.XX,

gained revenue volumes business fuel revenue. operating impacted and surcharge mix and quarter our were gains X% by Third pricing less core strong of

increased costs versus handled X% freight an revenue The increase job volume. did improved to were a X% fuel successfully fuel, XXXX. driver. team year-over-year Reported excellent productivity generating X%, as Excluding we while control expenses prices in a

during at events. handle improving in XX.X areas. volume increases will we a international of mix good unforeseen pressured we flex point Our operationally net of margins handle how Jennifer delivering the excellent is be to excellent increase improved the the drive income day, quarter. third did efficiently a free It's last across service to about our XXX as walk those buffer yes, of it's in quarter, I'm metrics proof operating XX% And in demonstrating ratio you And flow. as an that to our ability bit. percentage strategy was that year, network. job with while as operating quarter end and it of basis further cash our to while possible the another intermodal pleased points versus resource Look, business maintaining another really But through, working.

the let go detail then in question for and a and before back come the through up more you quarter wrap team to I'll walk we answers.

start we'll to financials. third with the So quarter you. Jennifer, over

you, Thank morning. good Jim, and

of quarter compared volume increase freight Let's last third begin revenue volume quarter income down offset on billion, quarter down X% of mix, where on $X.X more X% points. than walk business billion X were operating XXXX increased year. the statement, our in Slide to basis up Strong increased and components, XX revenue pricing basis X% by points. freight Breaking the added totaled freight a with $X.X core reducing versus revenue XXX third a gains revenue

onetime from revenue ongoing all declined at the International quarter points. XX%, year our basis quarter factors: transfer freight the several average. second per million sales at million contributed resulting Investor part during of and line, As intermodal or contract lastly, decrease. fuel last a $XX access our revenue of driven to for lower oils And impacted significantly versus the demand operations by Day, $XXX metro lower subsidiary, Intermodal's other reduced $XX equipment settlement average system top revenue shipments revenue up auto of the was I the flat car is million prices Wrapping XX mentioned lower fuel as than surcharge

flat revenue of with across expenses, drivers. increase the were the X.X% July of the sales that a productivity the strong volume year, as last partially some X, more costs the X% volume-related inflation, including Compensation appendix, but workforce me resources All other employees X%, as details and focus reminder, to improved and third more and expense we transfer. versus lower offset were prices impact and let productivity. X%, ongoing lower billion quarterly our operational our in and Trained volume. expense quarter there workforce are associated are wage increased highlight buffer fuel As metro lines our used handle expense levels offset record than to expenses. performance cost decreased reflecting on excellence. year-over-year Switching $X.X from benefits workforce equipment service by savings increased driven by continued X% then There areas operating

the fleet services in higher improved compensation Purchased as increased quarter X% the as expense locomotive and result inflation a in prices X% a $X.XX were on decreased as expense third drayage volume-related XX% the $X.XX expenses. active incentive cost offset workforce to XX% lower as Cost employee and subsidiary of agreements. material inflation per labor maintain wage per Fuel fuel related declined from in quarter well additional decrease partially expenses to to a gallon. and by

year-over-year growth our less in gains. Our which intermodal fuel increased significant X% offset the traffic, fuel-efficient related consumption productivity rate to

interest Finally, reflecting with of The other volume $X.X billion of income X%, the write-offs operating growth third XXXX result strong of quarter and inflation more better in that was revenue versus and offset impact expense pretax tax the by Below solid $XX higher million costs. income than up cost driven tax XX% control debt other average state increased lower reductions and in decreased from income Income lower XX%, expense by levels. $XX real declined income X% XXXX. estate million XXXX. on while line, income, or

billion increased with quarter when resulted count XXXX, net versus per share a combined double-digit earnings share $X.X X% growth to $X.XX. which in of income average lower Third

from of year-over-year with ratio quarterly half that basis operating Our of XXX XX.X% improvement. improved coming core operational points nearly

our at and of operating in ratio outcome Day, our we Dallas not Investor strategy an goal. the is As discussed

to shareholders, margins and generate which more for we our even mix. revenue is our earnings achieved as grow were goal cash Our by and impacted growth

on cash million returns $X.X from versus shareholder Year-to-date, at up X. billion, the now totaled sheet on Looking year. operations cash balance Slide $XXX last

driven flow $XXX has doubled almost by in operating labor XXXX, growth higher free conversion up partially income, XXXX taxes. cash and over and agreement payments are cash cash These flow rate XX% offset by Our improvements improved versus to million.

third repurchases, repurchases including shareholders dividends our million. $X.X Year-to-date, $XXX share quarter received have and of through billion

Finally, our adjusted X.Xx X and our strong at rating by balance maintain a the quarter credit rated ratio debt-to-EBITDA remain as a agencies. sheet finished we

wrapping So year, months left Slide in X X, XXXX over just majority up it's has good a the with and been of the on written, story been one.

of We which on franchise. the railroading, full fundamentals are financial achieving executing of critical the this is to potential

exceed We profitability we are strategy our service of continue prior to operational will improve guidance, inflation dollars. that and through most affirming importantly, dollars will excellence, our pricing our safety, XXXX

our unchanged. of strategy and is of We capital allocation billion will $X.X $X.X purchase and shares billion invest roughly capital

mirror going point year. third to improving how we'd put At finer slightly to results are year-over-year we also a quarter time, a We on expect basis. while to closely this on fourth quarter, close the expect the

This the level to demonstrating of cost our year, positive various the significant maintaining will Throughout while and of gains, of weather performance the types pivot navigated Railroading spike, ability the again, we of fifth traffic West to all improving service from our challenges mark them we've successfully, handle flex strategy. our quarter discipline. of results consecutive year-over-year and shown to Coast

a strong generate path finish out to productivity pricing to on with continue well and last laid momentum XXXX We we long-term positioning month. targets to us achieve the and

to turn now on to provide business Kenny over an update it Kenny? I'll the environment.

morning. you, Thank and good Jennifer,

X% billion and the for solid fuel revenues totaled to we quarter, mentioned, up surcharges, a $X.X quarter. increased pricing core had Freight third excluding was gains. Jennifer strong which As due volume

volume conditions due X% and pricing was gas coal right drivers face revenue increased up bulk development and business demand mix our at increase in associated for talk market we Coal core in year resulting last key a car to our difficult in to facilities byproducts, our and low jump due Day. renewable quarter positive inventory reduced Grain from quarter, on segment of levels for prices. X% the and quarter and the highlighted supporting a wins groups. the Let's volume about diesel continue average natural on X% as last and Investor compared per based month in the business to new traffic each revenue gains. for Starting decrease high in a competition solid from with products to

was up wheat. export for quarter, the and driven corn business by Lastly, grain primarily

win as to Mexico moving continue to outpaces We production. consumption their domestic business

like Revenue oil. pricing the gains core volume. asphalt the quarter per was on quarter in positive revenue for to the lube a in for quarter due development a Average X% Industrial. various in decrease strong strong up increased X% and to and to traffic. for X% car markets shipments Moving business mix efforts increased by Petroleum due

Petrochemical volumes in wins our and to in chemicals due plastics continued to new domestic industrial business market. demand grow

volume in the However, a production were lower XX% truck in shipments. Rock volumes for the up down with average Premium General X% a business partially increase intermodal Motors. market on by pressures. gains more increased demand than Volkswagen against decrease record X% revenue year's to wins last for offset reflecting softer was quarter and international per revenue those shipments, unplanned offset and surcharges adjustments, Automotive by car were fuel and due

to Intermodal continue remain strong. volumes

diverse up was to strength volume, drove seen XX%, Coast growth network. outpacing increased we significantly our volume also capitalize intermodal West due international to IMC were on Import which Our in domestic imports. able

Slide to turning Now XX.

balance remain natural the see Starting expected from with to low of high, for serve. challenged the we as outlook Coal our and is prices. markets bulk. inventories for we Here remain is XXXX competition key gas

and we to due we demand. have a ensure additional that new strong grain, areas, supply will in to secured long-term Moving growth, franchise optimistic domestic UP's are ratable grain generating facilities

the as the share south border. to ongoing increase export of We strength in the expect its market continues Mexico UP

and crush new feedstocks. production Cherryville The ramp growth in up [indiscernible] fuels focused to expect brought facility such we online facilities business continued grain Additionally, associated capturing products to at team in their as continues Kansas. tied renewable is the as on

to Turning Industrial.

earlier, rock market will year's mentioned volume. we not match As last record expect we the

from have outperform to Coast market is are strength Petrochemicals success development. the we for the Louisiana. expected of continue side, markets Gulf on year. for but our on Shintech's wrapping and Paceman, domestic import expansion intermodal surge tougher both we Petroleum, see international on drive excited our to will incremental are with West premium For remainder based Coast building franchise, volume with our up and of And business comps, the of the volume the the at to

the commercial the we market, strongest since see which offset In softness be business I'm We're In by going volume summary, XXXX. seeing are wins. in the year partially will development to proud of team. automotive,

focused allows operating solutions resource increased to growth portfolio diverse The together. the win team volumes is grow team positive West our momentum great and a find innovative customers markets, see and the buffer to Coast. us key on Our with in our puts and us to our position collaborating on manage to

to I'll review that, with to turn Eric over And it performance. operational our

morning. Kenny, and good you, Thank

Slide XX. Moving to

and well doing Investor our in we're at our has way to September, today. in things, continue always X-pillar focused that better we results mentioned as to great culture with Starting to a remain safety. efficiency on And down itself the I metrics. even there's in safety, progress As strategy make Day prevent our manifested believe injuries do we drive things and our service intensely performance derailments. We

year-over-year. both improved As rates and a injury result, derailment year-to-date, personal

we to are While are safest not the the we on railroad. there become yet, path clearly

velocity car to XXXX. improved to X% Freight third per quarter miles day compared XXX

X-point last achieved dwell the car a record XXX year. mix, a has versus respectively. terminal performance with performance. freight improvement the throughout improvements weeks, in in several favorable Additionally, coupled Notably, saw and a business A Intermodal manifest per index in last X% we quarter X year-over-year, service dwell, terminal last continued miles we day. maintained a improvement third have near driven

only our effectively took a also resources These international on plans, quick and intermodal As to shipments. the swift adjust results, the buffer but team surge to minimizing quarter absorb network. volumes, allowed deploy trip the of impact demonstrated throughout XX% not the in increased impact action our us broader actions mitigated by the

efficiency on review let's XX. Now our Slide metrics key

driving team did quarter. on X% a ourselves third productivity the can to the that to to more quarter network, the in third throughout improved the see the better productivity addition we product, service we compete we in put position productive compared XXXX. In our are, remains Locomotive you hyper-focused and

our enabled continued has on dwell. network the its team the also reducing locomotive of performance, fluidity increased While focus

locomotive quarter, the for fact, results our dwell of this X% year-over-year ever improvement. In best quarterly tied performance

month the all-time Workforce productivity, the impressively September quarter for third all marked which employees, respective XX% and periods. both includes improved versus XXXX, records their of

of improvements operations transportation, a technology work Not such quarter impacts September and plan it's a siding with dividends. are driving capital extensions paying record work. team monthly July, feet. targeted improvement across Train but mechanical for Hurricane technology. transportation improving changes and third how we continued leverage flat was steady and it the also is as of it's over X,XXX Beryl the efficiencies, only investments safety made Our the we our and automate quarter. sequential experiencing These throughout of in direct After to and engineering ended the length result

improve and future strides have are improve to we great there as made generate mainline While safely opportunities to this for current strive still we train year growth. to capacity length,

To as our team wrap influx to handle they the up, great efficiently work buffer by leverage resources in volumes. the

is the our will with, pursuit and team always safety, However, excellence. opportunity and operational pushing get I'm as I better in confident there of opened continue industry-leading service Jim? to

Thank Eric. you,

Turning Slide to XX.

summarize Before questions, team. what your we quickly to you've our heard like get from I'd to

we volume the network so. an First, of as margin job you Jennifer, manner. it imperative of we volume, that from to our adding profile that did heard a given And great did in efficient was

imperative the an in quarter. value mitigate team creating Kenny of excuses third The quarter for of again, available overview going continue after We customers, out reflects we're thoughts lay for strong mix the every to the that carload. dynamic our is gave and volumes year. and also the no to making pricing generate remainder the

While are of there the days, plenty term over intermodal gets to customers to the attention term. team short bring new railroad lot where winning markets is the long these and international of a additional

our and but continue safety to our being service steps Eric progress operational Year-to-date, Lastly, improve industry-leading. excellence. metrics show safety, improvement, they're initial great the just towards updated to

efficiency more of while the That and due great operating our asset possible a the maximize front, utilization. team we the network did to On handled to of our job improving was service ability service business.

be you operate reacting unpredictable, and the the business can company, the change that of of it's railroading matters. While fundamentals how anticipating to ultimately

and to it I'm sit say I But with couple said to the to just to company, When we is we have pressures had a of the us some take said of where This strategy joined going I pressures. I'll pleased team we inflationary last journey. of take heard by were the it month, and company at beginning get that years our again, this I right heights. you very as Investor Day right the the earlier new the today.

So we're your excited. We're ready questions. ready, take to we're that, and Rob? with

will today the of Instructions] [Operator from America. with coming of And Hoexter the question first be Ken Bank line

about talking you clarify the step a want revenue consistent then you guess, there? talking an to with things. that X that. about last Jenny, operating you And can targeting when what it coal level? Just you target seems level? and full guess quarter, I I are has taken big built One, into you income down takes ratio just talk op clarify year Are talk lately. a puts or on on what's you're Can

those to going look all quarter quarter, very of our results, I results. we consistent in Thanks start for when being broad Ken. categories happen fourth question. say outcomes I the what's I'll that, across say in pretty Yes. we then, the mean similar But and we yes, at of I think there. we're see fourth with we being see we mean, the terms

So consistent is consistent.

Yes.

surprises grain to through focus expect what look that with the volumes renewable to side, of on, no and made network. point the why year the of on doing with those that's coal We'd the if can of coal in you're the with line, seeing the to fuels you public counter we On I rest everything coal. challenges side some a numbers bulk at . continue

The Fargo. is Chris with the question of from next Wetherbee line Wells

you intermodal that I fourth how around bit that just wanted a and outlook think I the about guess little the comment influences understand about quarter. maybe how So to maybe

season helpful. change the preloaded for a consistency you fourth quarter, of little work came off of sort of a be would of drivers particularly maybe like it potentially been Do quarter, the to So international. a start of into peak that is what see third mix in the in bit little remarkable we sort bit, that a the

then volume. Kenny and that, the going we mean, believe weigh to continue are the with relative to into start pressures fourth in I'll Chris, mix I quarter. can the

a lower You kind seasonality, bit normal of see volume. have just you little that also

tend the to got a You've holidays little of bit weather. have

there's those things. So

that as The a on to a fuel. our pay We in fourth because and of other there on attention at looking a maybe you dynamic that impact. blanks there's quarter. lot $XXX sequentially is how well probably have it as puts less is attention positively so and from much think to in of third think fill drag mix is be and even a thing those fuel going you're quarter takes surcharge Kenny? And when in I that to fourth I think folks just million helped I to pay think basis some fuel different contributed year-over-year or the the the quarter,

elevated, we quarter, year-over-year see a go to you're of that basis, On international expect intermodal seeing and a could the although to down can step we little the I it think start now Yes. numbers as be throughout bit. in some you

that for things and is able One XX% to preparedness accept team highlight that to want anticipate just of increase. be I the the again to the

very so And encouraged we're that. by

Our of next from Markets. question is the of Spracklin Capital RBC Walter line

few what margins that, and can your that Jim, for early is you were that you next you in words, I'm an . industry-leading think In think whether year? as longer, that effect taking other an curious just and have of as mention just -- do OR, it the is prepared in current kind years improvement environment? OR you I to industry-leading in of your year? next hoping. Or So perhaps achieved of weren't say prior kind alluded not margin you possible that to in Is remarks, ago the your that is first

quarters, the OR think this including I we industry-leading one. an last for of have number Well,

pretty and that. safe last say I think the ones to to we're I'm report,

are locomotives, where adjusted little and people the start up bit. X,XXX. And took XXXX. than we was of did place we Walter, then here. we where if We big XXXX, But now in same already. that operate number would lot came those we I am think I to -- back situation started. I railroad. months I Sabatical joined, done? it's let's as And different to changes, XX the I back not. And I on positions So and in X,XXX-plus those ago went to the a I back when was remember And were a different closer of parked that Absolutely it people if and back. XX, I'm come in were have where

the margin We and will company year, and ways. best we be not don't any reason operating for to at will continue I ratio this see that, look us

and be inflationary Now X very an to get said from pressure to on first I not it's was I over. going the it is call easy

pushing that we've that the in pricing win inflation to the but are that. them get coming the -- revenue to with being have also understand in we're have see higher is. cognizant marketplace. them We the higher what done in only pricing allows with that product a that They to giving and price than value customers And

exactly we digit. to So laid high see in what growth, what out I see double is low Day. digit our EPS single Investor We

we have We Pacific. ratio that set operating another at $X shares. the improvement up Union come the if providing absolutely don't online with $X for billion the that billion versus to And that, cash we're we with opportunity buy we are back can use

see Walter. question. So that's the answered it, I Hopefully, I way your

Goldman Alliger of line Jordan Our is Sachs. from . next question with the

nicely This growth on Jordan. year-over-year up headwind down With for and is X% X%. Andre at carload

you here? incremental, how set a can you year-over-year the the sequentially. are productivity if You achieved and actions incremental sets for that quarter, opportunity taking actually about talk little there from up XXXX margins more production accelerate in Could bit industrial both the and that guys strong just and

Absolutely, Andre.

by Let's level setting start what did. we on

thinking start we've length, in XX%, and In before. train you And ever XXXX, a Pacific certainly new about talked for the billion So results I continue to driven single look We quarterly productivity, that, best approximately record, going as to $X.X monthly ever record we've Union it on comments, we've in every dwell. us month that September history the not quarterly of workforce tied you're best locomotive my at us. opportunities. we prepared about see and quarterly XQ. find Since is day. But work productivity. in productivity had

those I it's technology. workforce, my are. let's about what fundamentals, start agreements, of When So from talk it about always it's I team, talking it's some break down

I actually On When to see still able us through We've look process. for improvement. recrew inflationary start the you you the use yard and talk local, if the to pressures of productivity. wage of in paying, wages opportunities look a of to Yet there. number still technology at offset our the year heard Jim July be some about improve X.X% that we're done we've fundamentals, that in rate. increase to that we X% and able There's our opportunity people at our That's more X. inflation been you that's

technology, You're us. to a talking going huge talking for do continue or got you're expense opportunity work that. Fuel to is to big and process through. one about see us, be still a to about whether for continue we to it's going whether it's us you're

an about the that of our with XX%, list It's compliance it's energy say most EMS, at still you, When locomotives that's our day, that. safety, cost. fill is our where now I'll we we on I goes productivity. lowest and we year work the every for So I on work tell think driven And north We've management. really filling opportunity mean how where work locomotives, lower the do service, started and on we which it's on. significantly us. it on the

the from with David line is Mr. Vernon is muted, question Bernstein. your to Vernon hear of not next line we're able Our you.

you. off get to trying just was I that. about Sorry

you as we're as kind We've a speeds. had some The looking the intermodal low the train well. looking Eric, as at dwell numbers on are of issues been. data outside ports from they've at So those Coast seen trending West question on I for in, the

the you talking with in terms of circle driving that today in improvement ever in the of I the guys do come how performance are that I'm in best square the length So of about intermodal has up service. a external trying couple of those it's some conversations. just client customer data train results to points reconcile because

Yes. for David. question, the Thank you

Here's as bulk we Because in improvements not It on you tells we've to and some how point, can improve able the we've good both And I continued reconcile is and side. while we've work that dramatic manifest be. seen it. as to your to XXX intermodal seen improvements that. be to lanes

frank, be Intermodal let's in able much to advanced notice what without increase . handle of international any proud Now if really be the XX% advanced accomplished notice, to very I'm has that. team

do to to do what intermodal now. Now things doing the about talking speed build that have to we right continue we're back that with you're

the continue speed add and will the as remain to that that, top execute continue to NS the in And deploying every resources, CSX continue we can of we We've the that we I already. car to our take So intermodal when across volume. form with our points locomotives of ports, These excuse expect trains that about are take the train every that me, talk closely staged and work they Basin. we into system us -- give our can card fluid. short the order L.A. we turn the things cars capture and on other we that's we that need and the have to interchange performance way that ensure excellent into back. the so taken will We to buffer every that

from Eric a of bit just said. what I David, sort add to on little need So

arriving of Canadian issues. Beach So it? The same were you, I we we you equipment we that. was thrown were this the conclusion. with issues, knew the and that you East know way going start to quarter question one by Beach. supply see failure of it to we the we happens do they followed are L.A. something is to are maintain to happened normally and get both at They us came increase then or not where Long don't ports able an moving when up on week. increase event you did that same held board because second Long let's get you LA XX% big beer in kind being handle But No the not on intermodal And that be And same how both business. going told out speed, that or Ships the is the success see velocity. a going earlier chain. Coast don't And the that and and first with

West on As and place far great delivering. as job The it we'd We've it to been have have little faster we'd was it it to able seen we're velocity in containers and able fluidity a those differently little the to Coast been fantastic place we have be of and if the we the that speed cars our terminals sooner, is turn of we we customers up. plan it off work containers a terminals, have at the could the a told coming so pulling been could place and that done able in love shape. if right the have only

I'm very proud.

ahead it handle think do. proven day that's that I success seen the love our real we're story cars, running I and look for XXX their seen miles It's they a an they be LA that LA -- of I for our story. think the place to really that important I business? per you've is in and that I'm at will a and love And say, of Beach can I move point. we've what's good, Long as Long we part customers can, decision-making to what Beach sure us. keep think that over have increase And it can us the you And metrics heck fluid.

much. very you So thank Great David. question,

line Our Tom next of UBS. question is Wadewitz from the with

Mike Tom. for is on this Triano Jim,

metrics? overall productivity So of if out through September, another mid-single volume and we look improvement can they've to this Do flat productivity, look a volume mix think are to they're up the locomotive productivity backdrop digits next the in up. year, both the at If but we you murky, and improvement kind driver mid-single-digit is of despite those volumes kind you headwinds. of and the get year still been workforce

we Well, what for which we're I definitive about -- about very, very our guidance It's year, to want think next sticking out, we that's it thought a we it. next deliver year. set to

So that unless that. very be able to we're we're States, going the United in implodes economy the deliver to comfortable

when get we delivered a to be of doing see in that So the not people proud last to kind round. reason some we I'm of have of number this that the to what collective productivity. be implement agreements to you any we're because And continue that we're able at carrying railroad for productivity on take of us we to look improve quarter. very extra from last that still the to know We don't

on see So efficient we're the do But being operate could to the to that a very manner. side, very nonoperating in prudent what railroad still on been able you we've side.

anything So and it, we at comfortable that right look do I'm that every day, we're take add? Jennifer, to very headed way. a the

areas going and the beyond. and I we the capital about, No, have side, against just expense that all improve areas and it's too. the of would for action When look of rest our of reiterate, to really we this into plans on XXXX year Eric and what we have kind and talked at productivity,

of So gives there's us runway the say confidence ahead that's perform. certainly our and we're in very great to to what really confident us, ability

Stephens. question the of from is next Daniel Imbro line The with

a broader wanted to ask one. I Maybe

out positive. you're Western your you the hard then if it standpoint, more curious know, Just I'm in but competitive improve you're merchandise prepared business, was on with bidding but remarks, pricing when anything peer know wanted there. you're And mentioned in different has head-to-head them I going been from noticing there your vocal to it's to market. a

how core the market pricing all? changing you're if curious Just at there out in it's seeing merchandise

you we're if We're a sourcing and against pie, barge. to look putting together at of there product the size Yes. competing service degree lesser against truck the go against really a truck. against out compete to

to what we on doing share grow focus there Union we're Pacific and out and we do win So can control. what go can and and

So that's that.

for now, buffer Jim network be that we with that's all and our little to aligning that The service that And we're those to the lead with lead into go talked customers about the put the tie I'm question, there. talk proud have a the able that capital pricing investments the second look, Eric product team and with velocity, your out service, we we to part bit we of it about. resource the the the and inflationary pressures and can of

So yes, able business that to out merchandise on the some freight. pricing been secure has the there team go strong and of

or the entire the is want to Kenny, add able operate to to a in the a quite think States. interchange allows of manner only would railroads this, line to to United the lot be but of point efficiently. another thing a us We all short XX% a touches industry grow. I I make. So X that whether XX%, entire it's around in industry it's traffic, railroad, the very operate and want valid not other I I

with when Western our So we interchange the we be when traffic all more it efficient move across Mississippi, move competitor. can we it the when we

we that on, traffic we of lot to efficient a there's get transportation. from modes be we're but of move compete both to to -- if love other that able we So

was last now, thinking it's I've Now are other was railroads, I I Santa CPKC, Fe, many Northern when whether I Norfolk worked that it's whether people I've Southern. if night CSX people smiling whether or at about even this, that Bernington it's with worked with how

that together operate railroads so all in want all So we manner, have worked that we us want that ahead growth. an come of we efficient move -- of we from us and a culture,

us speaking them, I'm not Pacific. of And I'm Union speaking rest the at for for

given else I'm you this And we've are we and what see have. deliver Now not do, last we mix business And where can does. moving what with what everybody we in could quarter we of control been can that it do forward. very see and what to all the kind listen, that, I and we comfortable what able

excited. I'm So

the in now it and I we X XX years better place and in better ago XXXX. think a ago, was sure than industry is years than I'm were

Nothing get to a competition is be place little you to people do. can beating continue all the we'll know even a we the better. that all know. the want you with better best that's people it's you thing wonderful what So And than have. to and

of ISI. from with Jon question Next is Chapell the Evercore line

maybe to well-timed going the was Ken, one. last anyway, a this ask to follow-up pretty I

to of does price? pricing from seeing obviously, and So a push remaining pricing. service, kind your without points the at tailwinds? both Or some you that volume bit, to momentum you're certain keep in macro in headwinds to cap to the arc getting do despite coming that down value the says and volume continue a little the up that. from the bulk demand volume see with open that good bit conceptually service point, of Industrial, need Jim a X% little help side have out to inflation customers the type of

Yes.

control focus link pricing, crystal in service the So is the customers. investments are we on Jon, we we're of our We macro and Eric the are and to articulate that the providing macro value making, we're our that focus the the on how the we things us, that out those very of is clear and to network.

look to it, we that will happen. So the definitely at continue as way it we something see

the is JPMorgan. Ossenbeck Our of line next from Brian question with

So Jim, one that board, here to you and take to came coal back initial come then then the the first broader you a network. on you you the comments sort of of the trends. not and mix to earlier get on labor also had over the help just inflationary when we've little said while challenges seen maybe going just just to -- and something Obviously, inherited

set bit. things help to little level just maybe So a

of broadly you offer timing You place if getting could terms any going as you hurdles of or the be a better be with. there's what we should look while. of going gradual what we a to said more and than over that be these thinking to to of if some sort context take it's in off started it's to change probably step some Can

Yes. Brian, thanks question. for the

all to everybody So comparatively too us we else. are deliver to much, think a we've backwards job able I be I to to -- at if of done Union but XX,XXX where we don't great Pacific, look like

really important job about every level. that talk our them. customers to services is of one service sold growth service other Now what measure to out the us, what remember, at sold And of is we what level a measures and we've of service about there to great we are a customer individually is high that we done not providing

So we what clear what our inflationary results be pressure. and we that on Brian, think very were we what had can and we in our put we deliver. the That's mix, why X-year is, of should expectation

comfortable over are. see I we'll over our net I'm income ratio, in So improvements operating we'll see shareholders. time and our improvements And where our in drives we our improvements that think very for value EPS

would came enjoyed there coal. that It's So no this not with is easy the couple coal always we've going wasn't be world. hike the it's going XX%. challenges, it day, myself have a not job retired at very I going then be of I at look It I was couple years. Like comfortable. challenges. to XX%, a And the At I overcome but was very is If of Scottsdale, for start, end back. some coal growth. think get to but Arizona the was There's still of to the not and morning was This down of a years. said a pricing it way down easy that's always done good the in to and things, stayed

I and to get I'm can think we this company something because here do, there's moving forward.

Brian. excited, very I'm So

Stifel. line next Nolan Ben of is the Our with from question

gains intermodal you point up or more both I'm certain where you where like magic if manifest already at like stronger feel really just also just really strong have think a or competitive you at service you least where you versus into the pricing been And if can versus level at for So a range a that much number trucking? you certain competitors range arrive Is and maybe a curious maybe or lean share advantage? higher. have? there a heavily performance a trending index magic there's has

in earlier us go of what No, translate we We better to Same asked sell hit environment on But ask talk and for into growth, price. We at there's true as we're it service at Yes. how do better that service clearly, their look those gives do and asked maximize magical Jim more We files. truck products. is consistent we a to -- a business and to when customers reliable the to and number. in a little improves, more their receivers. pricing to we not that talking bit customers. more discussions. to product look our

what a the great product. quarter in own creates macro So capacity. in clearly, our the here regardless own happens the as It we our creates environment. job done improve, on of third service It opportunities and we've

there just follow-up you're now a . think you Do as

team. I as improve I hope not. mean, want management to a we always

strive to where no, we're always with there's going no to yell So going out improve to we time we're arrived.

Brandon of from Barclays. Next question is with the line . Oglenski

mix wanted in Eric the is for just to to the This Morgan on discussion come Brandon. I quarter. back fourth

outside helpful, mentioned margin view you think. volume some can be of just mix other from particular, somewhat. I international commodity think headwinds how But contribution quarter. of some mix in you talk coal growth from I intermodal groups you maybe with moderating would about effects maybe continuing the intermodal the and in

highest part our has very just car group to Industrial going has of business look pass that per But if your business question. bottom year. our line. you Probably that on to average our been down teams, contributions last revenue is that strong a has And all at

mix. continued Now mix there's in revenue businesses the contributes average per volumes that obviously down continued to within industrial with car lower outlook And year-over-year, an kinds the and those that international But in in impact. the mix of that's like pressures the the come of growth intermodal. the the addition are always economy, some to certainly

West we're to is it export strong grain really there's yes, Grain, Coast. that it's which a for the side, if little aside. business. bulk set enjoy that But shorter coal, holden into the through of great taking On us. We length out Mexico, bit

that else? again, want you you of don't know have . Kenny, mix what call I anything if add some I'll to So mix. within

come we'd I did good these just we to going up of road. apologize with volume What XX% trucks love want take set the team we're management What increase. to we for this for here the of . what Inland say, unexpected for off accepting expand us for tell to is I'd amount Yes, the not Empire, on. things that's that did you Phoenix success did It's all job preparing it. a to increase.

. really from mix just important, productivity about why Jim's very we be this still and it's produce need goes that workforce diligent run good railroad, so how absorb our it and back fundamentals. that's to we using the results. to quarterly shocks our so on That's And resources, why can we we're how Yes. point a

from question the next line of is Jefferies. Our with Stephanie Moore

bit You well And and about talked your How Mexico, business? also Mexico grain thoughts forward? export geopolitical can little helpful. a changes the to a you administration see would any you going do that but broadly in strength on talk more lot about as be

Yes.

about First grain Cherry of landed and and supply we're fuels all, Ville I have discussed. come that on our differentiate we've facilities business grain help talking just facility the the want and facilities, back grain as and network, the Mexico. our that renewable grain XX-plus facilities actual The we've network thing into our same there will fact with the that step to meaning Kansas that

finished look apart you like lot how auto broadly, yes, there's we it. Mexico, vehicles as look parts. of are at Clearly, to we let me then, But know opportunity kind at of just let There markets a So and over-the-road with that also break some trucks.

have service product strong out there. a coming We

that is, that Stephanie us, get that market. the have multiple in differentiates can partners again, we What fact

that have We which we that. And daily service own one out can of we that box into the rail only market. we're that Mexico, our get into know have and has we

it's pro about area that. they're certainly environment, freight growth out in Day. environment we going to laid business be so Investor So see the for as far that And the an we're strong clearly, administration, again, We us. support excited that a it and as

with question is next line of Our Scott Research. from the Group Wolfe

to was I I'm guess up about -- for and that was -- not comment what going if revenue that or about think But I And if earnings of forward? still employees how Jennifer, else just already X% an that flat any sure made. like I on sort comp color QX not comment. asked margin that sure know someone that then or

know don't color? I So any

Okay, Scott.

So we'll for employees. with start the comp

that the X% it, the numbers, was at if increase, call half So July you increase. wage rough X of from look

is the really incentive as with we've of year-over-year rest cut also That's work half year well associated T&Y guarantee as agreements payments. higher the and more more through other comp over as a graduated combination The higher training. hubs employees

continue rest. see are look all bit of those even drivers a it's XQ, the extra we probably the for the in little to up maybe there. resources implementation And similar, that some we So going to as more work of pretty support carry the

that's customers because are help for inflationary agreements heard so us why fairly. compensating and stress is really efficient And you've a pressures, while just us how do have productivity in that we we're why absolutely our very place making our workforce employees today us piece well approaching critical that's and we the labor sure can that productivity manner as good that getting serve going forward in as

about to all-encompassing question words. other said fairly results. consistent we your the -- That's back Going a

it's ones to the that that versus operating in So know very number think call key look all you XQ could going of XQ. any ratio, But we you operating income, what similar at EPS, look are you measures.

from is question Next of Elliot the Cowen. line TD Alper with

partially what you're the year international and Just in I intermodal intermodal into about magnitude. positive. this where car the you intermodal in about trying Elliott is fuel, for that know this QX? QX. domestic rev in Can mix to I first domestic the quarter quarter. maybe domestic you Seidl. growth the per headwinds offset the This we kind And on Jason gauge your in already is but believe outlook of intermodal market is Could talk volume seeing see talked growing

line encouraged we front, quarter, even third the we've be been late So as the on second been as positive in domestic that the as It's quarter. intermodal saw positive.

Empire Again, a quarter. having from benefit that of on international the what's why the more on the a capture have, continue a looks -- seen benefited place And I'll in and what bit little see like look fourth we I it Now products these for a happens some some it we that see some intermodal, and intermodal most has side. the as you throughout product domestic of side, of we've for demand helps Inland we'll us quarter. at we'll there. harping we we tell keep at international that's think taking that strong as

Our final Rosa is question with from the of Citigroup. Ariel line

think the us about you wanted price XXXX? kind about just I we have to is give rail currently to be expect being target -- that inflation. to to that's but clear, above just know wanted And can of you've would some kind customers you then that achieved given Could pushback spoken this sufficient I the currently is compensate for for truck people discussions? I service environment gotten for other and as be color, of demand something have already, ask the from of looser kind capacity environment, say the to loose might that you whatever those you be? is Or softer pricing more the do . of doing kind or might environment

Kenny? question. good Ari,

Yes.

-- were talked to intermodal, Again, only quarter, So I clear this, have you in and domestic mechanisms think place We've the I domestic we our competitive. we've second about if are them can. up, for price fact that you're you'll intermodal. about talking got it specifically got up to third we've keep that to in about customers talked and you quarter,

environment few a for we capacity since next we're downward . but as We'll at value more stagnant really going months, on So trucking as really XXXX, that been the us. see the see to positive good ability feel what gone to look where and happens flattish it in tightens, side. outcome we We've that's it's and now. positioned from about we're the pricing a

want inflation. do to talk the you about Jennifer,

Absolutely.

of point, exceeding you've XXXX, our going talking throughout that terms pricing they and back in to our period, question, are XXXX, dollars, you're So whether this absolutely, have inflationary inflation about dollars XXXX. today your been

we committed have achieved that. have that to We been and

margins that this next Investor our to we our important really dollars Day, talked is to I only will at year. think it our about exceed become accretive not will going we is point the have forward, and price inflation dollars that continue

on very front. feel bullish that I So

service all level, and that and the the get numbers in that make we right -- win winning the We customers in we with how is is now it's right us very comfortable we of worried to if are we're to them do whether level, discussion very are operating how then and in the deliver been the our a close where driving XX%. just able and then on the we last set holding XX% increase Ari, the are real we've forward question. don't If it in year. income, to delivering also we Why team, looking up year XX% call and and up wrap income, what forward we share, X% quick up good net up to operating said in way this in it railroad looking at to what look earnings service to think as the business. about marketplace. X from productivity, marketplace back finishing not together the how I months work per off what Those up we the just

more let close I guys nice very So morning Thank with move and that, me you discussions this know just with looking for much. everybody competing was thanking by to morning. this forward joining have there you off and ahead. us calls, we us as to all

This and gentlemen, Ladies does today's your for teleconference. thank participation. you conclude

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