Kenny Rocker, EVP of sales and marketing, said the rollout of the company’s Unified Plan 2020 is complete, which helped the Class I railroad overcome first-quarter challenges.
Union Pacific’s implementation of precision scheduled railroading principles helped it overcome significant first-quarter weather hurdles and improve several key metrics, said Kenny Rocker, the company’s executive vice president of marketing and sales, on Wednesday.
The Omaha, Neb.-based Class I railroad began rolling out its Unified Plan 2020 last October, which shifted the focus of operations to moving cars while minimizing dwell times, blending existing train services and balancing train movements. The three phases, which were expected to be implemented by 2020, have already occurred, Rocker said during a National Industrial Transportation League webinar.
“Now what we’re doing is we’re focusing only on the car, which may mean that we have trains that are not very long but we’re moving those cars and shelving those cars and it is getting more fluidity in the yard and helping with dwell,” he said.
Rocker, who has been with Union Pacific since 1994, later added, “Basically what we’re doing is our old transportation was a node-to-node look, meaning that the transportation plan was set up to go from one major yard to another major yard, but we didn’t take the time to say, ‘Hey, how do we make the transportation plan work where it could … get from point A to point B without having to stop at four yards along the way?’ We’re doing less work at the yards but we’re bypassing more of the yards now.”
Union Pacific improved its first-quarter train velocity by 7 percent year-over-year, dwell time by 19 percent to 26.6 hours, and car train compliance, which measures the reliability of train times, by 2 points to 62 percent. Car train compliance reached 73 percent in January, which was a 13 percent improvement over the first-quarter of 2018.
“Even with the flood we were still better — with the floods, the derailments, the snow — we were still … a couple points better first quarter than we were last year,” Rocker said, referencing the flooding in the Midwest earlier this year along with a train that derailed in mid-March in New Mexico. “We all expect that number to inch up to an acceptable level for you.”
Union Pacific’s line between Omaha and Columbus, Neb., was down for 13 days, Rocker said, and its line between Omaha and Kansas City is expected to be back up in late May.
“Because our network was so strong going into this is the reason we snapped back so fast. If we weren’t under a very strong network under this UP 2020 plan … we’d still be slowly crawling out of this thing,” he said. “I like the fact that we kept the terminal fluid.”
The lower dwell times also was a reason Union Pacific, which reported a first-quarter profit increase of 6 percent, paused construction of its $550 million rail yard in Brazos, Texas. The company will instead reallocate the money in its $3.2 billion capital investment plan to smaller yards throughout the Gulf, including improvements to its 760-mile line from El Paso to Los Angeles.
“We’re taking that money and reallocating it to just be more focused on reliability and getting more throughput along the line as opposed to doing it in one location,” Rocker said. “We may still have a footprint for Brazos, but I wouldn’t expect it to be as large as we thought it would be.”
Union Pacific also plans to continue investing in technology to increase the ability to share real-time and customizable data, Rocker said. The company is using GPS information for unit train and bulk networks to provide real-time data. It also has about 50 customers using API application programming, Rocker said, set up for car tracing, but it wants to implement about seven to 10 additional APIs over the summer.
“API has the ability for us to share real-time data with you all in whatever format that you have,” he said. “The other thing that I think would be a game-changer is the real-time cargo piece. There are a number of things we are doing that are helping us out with reliability.”