Denver Chamber of Commerce
January 16, 2009
Joseph Bateman, VP Public Affairs – Northern Region
Union Pacific System
Seattle
Eastport
Portland
Duluth
Fast Facts
Twin Cities
• Miles of Track
32,200 in
23 States
• Employees
49,000
• Annual Payroll
$3.9 B
• Customers
25,000
• Locomotives
8,700
• Freight Cars
106,000
Chicago
Omaha
SLC
Oakland
Denver
KC
St. Louis
LA
Memphis
Dallas
Calexico
Nogales
El Paso
Eagle Pass
Houston
New
Orleans
Laredo
Brownsville
Denver
Service
Unit
Sioux City
Granger
Council
Bluffs
North
Platte
Phippsburg
Lincoln
Denver
Marysville
Provo
Grand
Jct.
Topeka
Salina
Paola
Sharon
Springs
Arco
Pueblo
Hutchinson
Walsenburg
Wichita
Stratford
Dalhart
Denver Service Unit 2008 Revenue $2.2 Billion
Denver Service Unit Facts
• Employees:
2354
• Miles of Track:
2937
•Main Track:
2448
•Branch Line:
489
Subdivision Train Mix
Moffat Tunnel Subdivision
• Union Pacific: 16 / 17 Trains per day
• Amtrak: 2 Trains per day
• Ski Train: 2 Trains, 4 days a week
• BNSF: 4 Trains per day
Subdivision Train Mix
Colorado Springs Subdivision
• Union Pacific: 6 / 7 Trains per day
• BNSF: 40 Trains per day
Subdivision Train Mix
Greeley Subdivision
• Union Pacific: 16 / 17 Trains per day
Limon Subdivision
• Union Pacific: 14/16 Trains per day
Freight Railroads in Colorado 2006
•
Number of Freight Railroads
•
Miles Operated*
•
Total Carloads Carried
•
# of Freight RR Employees
•
Average per Freight RR Employee
Denv er
Grand
Junction
Limon
Colorado
Springs
14
2,645
2,873,787
–
Wages
$69,900
–
Benefits
$27,100
Total Compensation
Pueblo
Durango
•
3,042
$97,000
Total Wages of Freight Employees
$ 212 M
RR Retirement Beneficiaries
7,349
RR Retirement Benefits Paid
$112 M
* excludes trackage rights
Freight Railroads in Colorado, cont.
Tons Originated 2006
Millions %
Coal
24.3
73%
Food Products
2.0
6
Petroleum Products 1.3
4
Nonmetallic Minerals 1.4
4
Glass & Stone Prod. 1.1
3
All Other
3.2
10
Total
33.5 100%
200
150
100
50
0
Tons Terminated 2006
Millions %
Coal
16.1
49%
Nonmet. Minerals
2.9
9
Glass & Stone Prod. 2.3
7
Lumber & Wood
1.8
6
Chemicals
1.3
4
All Other
8.4
26
Total
33.1 •100%
Millions of Rail Tons Carried
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
UP Colorado Capital Spending
2003
$64
2004
$108
2005
2006
2007
$65
$53
$64
Total 5 years $354M or
Average $71M/year
Freight Railroads Are the
Transportation Backbone of America
 Connect businesses and
consumers across the
country and overseas
 Most efficient and costeffective in the world
 ~$25 billion in wages and
payments to retirees each
year
 Billions of dollars in local
purchases and taxes
The Fundamentals of Railroad
Economics Cannot be Ignored
 Railroads are networks: what happens
in one place affects many others.
 Can’t be easily picked up and moved.
 “Density is the god of transportation.”
 Huge differences in customer demands
and options.
U.S. Freight Railroads Have
Certain General Characteristics
 Vast majority
privately-owned
 Typically, same
company owns the
track and operates
trains over it
 No forced access
 Low government
funding
 Freight & passenger
are separate
America’s Freight Railroads:
Freight Transportation Leaders
•(ton-miles)
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
•Railroads
•Trucks
•Water
•Pipeline
'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06
•Pipeline does not include natural gas. Source: Bureau of Transportation Statistics
U.S. Freight Railroads in 2007
Type of
Railroad
Freight
Revenue
Employees ($ billions)
Number
Miles
Operated*
Class I
Non-Class I
Regional
Local Linehaul
S&T
Canadian**
7
556
33
324
199
2
94,313
45,821
16,930
22,298
6,593
561
167,216
19,596
7,805
5,602
6,189
n/a
$52.9
3.9
1.8
1.3
0.8
n/a
Total
565
140,695
186,812
$56.8
*Excludes trackage rights. **Includes CN and CP operations that are not part of
a CN- or CP-owned Class I carrier. Source: AAR
U.S. Railroad Performance: 1964-2007
300
270
240
210
180
150
120
90
60
30
0
•(Index 1981 = 100)
•Productivity
•Volume
•Staggers Act Passed Oct. 1980
•Revenue
•Price
'64
'68 '71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07
•Source: AAR
A Variety of Forces Have Been
Pushing Freight to Railroads
8%
6%
4%
2%
0%
-2%
GDP Growth
Armour Yellow Outside -- Green Inside
• Rail Transportation Is Three Times
More Fuel Efficient Than Trucks.
• UP Can Haul One
Ton 790 Miles on One Gallon of
Diesel Fuel.
• One Intermodal Train Takes up to
280 Trucks off the Highway, the
equivalent of 1,100 automobiles.
• One slot for a passenger train
consumes 2 freight train slots.
• 2 freight train slots therefore equal
560 trucks or the equivalent of
2,220 autos.
UP “Green Goat” Hybrid Locomotive
Double the Freight on
Same Amount of Fuel!
•(Index 1980=100)
200
175
150
RR Fuel Consumption
RR Volume
Avg. RR Price of Fuel
125
100
75
50
25
0
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007
•Volume = revenue ton-miles.
Source: AAR
Ways Railroads Conserve Fuel
 New locomotives
 “Gensets”
 Hybrids
 Technology
 Monitoring
systems
 Idle reduction
 Trip planning
software
 Training
 Component design
Freight Rail is Cleaner
Ratio of Emissions Per Ton-Mile: Freight Rail vs. Trucks
24
20
16
12
8
•1:7
•1:1
3
•1:4
•1:2
2
4
0
NOX
CO
Railroads
•*Volatile organic compounds
Particulates
VOC*
Trucks
Source: Univ. of Iowa Public Policy Center for the U.S. DOT
Freight RRs Account for <1% of
Greenhouse Gas Emissions
U.S. Greenhouse Gas Emissions by Source: 2006
•Non-transportation
•72.4%
•Trucking
5.7%
•Freight RRs 0.7%
•Other freight transport
•1.2%
•Passenger transport*
•20.0%
•Source: EPA
•*On-road vehicles, aircraft,
recreational boats, passenger rail
Steady Rise in Rail Carloads
•(millions of carloads originated)
34
32
30
28
26
24
22
20
18
16
1991 1993 1995 1997 1999 2001 2003 2005 2007
•Data are for Class I railroads. Includes WRPI from 1991-1995. Source: AAR
One Result of Traffic Growth: Tight
Capacity on Parts of the Rail Network
•Millions of Class I Ton-Miles Per Mile of Road Owned
20
18
16
14
12
10
8
6
4
2
0
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07
•Source: AAR
What Are Railroads Doing
to Increase Capacity?
 Aggressive hiring
 Massive equipment
and infrastructure
investment
 New operating plans
 Cooperative alliances
 Working with customers
 Technology
Record Capital Spending
•Class I RR Capital Spending
$8.5
•$9.
2
2006
2007
•($ Billions)
$5.7
2002
•Source: AAR
$5.9
2003
$6.2
2004
$6.4
2005
Railroads Spend More Than Most
State Highway Agencies!
•Class I Railroad Spending* on
Way & Structures
•vs.
•State Highway Agency
Spending* - 2006
•($ billions)
•*Data include capital outlays
and maintenance expenses.
•Sources: FHWA Highway
Statistics Table SF-12, AAR
•1.
•2.
•3.
•Texas
•Florida
•California
•Union Pacific
•BNSF
•4. •New York
•5. •Pennsylvania
•6. •Illinois
•CSX
•7. •Michigan
•8. •North Carolina
•9. •Ohio
•Norfolk Southern
•10. •Georgia
•$7.57
•$5.69
•$4.19
•$4.17
•$3.89
•$3.59
•$3.30
•$3.30
•$2.62
•$2.61
•$2.48
•$2.14
•$2.12
•$1.88
National Rail Freight Infrastructure
Capacity and Investment Study

Prepared for the National
Surface Transportation Policy
and Revenue Study
Commission.

First effort of its kind involving
the freight railroads.

Objective: estimate cost to
expand rail infrastructure to
handle traffic forecast by DOT
for 2035
% Growth in Trains Per Day From 2005
to 2035 by Primary Rail Corridor
•0-50
•50-100
•100-2,500
Future Corridor Volumes Compared to
Current Corridor Capacity
•2035 without improvements
•Below capacity
•Near capacity
•At capacity
•Above capacity
Support Passenger Rail - But Not
at the Expense of Freight Rail

Passenger service should complement, not
conflict with, freight service.

Adequate liability protection.

Fully compensate freight railroads for passenger
use of their property.

No forced commuter rail access to freight-owned
property.

Freight railroads should not be expected to
subsidize passenger service.
True High-Speed Passenger Rail
Can’t Work on Freight Tracks
 Safety
 Operating
differentials
 Capacity
and
efficiency
 Engineering
requirements
Points to Remember
Regarding High-Speed Passenger Rail
 If we’re going to do it, do it right.
 Fast, dependable service necessary to
compete with air and highway.
 Piggy-backing on freight railroads will give
yield a third-rate passenger rail system.
 Goals of reducing pollution and highway
congestion can be realized if we ensure that
passenger trains don’t interfere with freight
service.
Denver Chamber of Commerce
January 16, 2009
Joseph Bateman, VP Public Affairs – Northern Region