Profits Rise for Union Pacific Despite Falling Freight Traffic


Despite a poor freight shipping environment, profits for Union Pacific have risen.

Second quarter profits for Union Pacific Corporation have risen after they cut costs, according to The Wall Street Journal. The cuts include lowered fuel expenses and job cuts. The railroad said it will continue to cut down amidst a faltering freight shipping environment.

Union Pacific is overhauling its operation, running fewer trains and sorting rail cars less regularly. Other freight railroads are doing the same in response to slower freight traffic and lower revenues. The slow down is the result of trade uncertainty and a weakened industrial economy.

The operating revenue for Union Pacific fell 1% in the second quarter as the shipping volume fell 4%. At the same time, operating expenses declined 7% with an 8% decrease in the company workforce.

Union Pacific says it is making changes carefully so as not to disrupt its own system.

“We’re trying to do this in a systematic manner instead of blowing it up,” Union Pacific Chief Operating Officer Jim Vena said. “We’re getting out in front of it. We tell the customer what we’re doing.”

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Economics, Finance and Investing