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Union Pacific Railroad’s own economic rebound may be as lethargic as that of the United States, meaning a second-half recovery is unlikely, said UP Chairman and Chief Executive Officer Dick Davidson June 6 at the Merrill Lynch Global Transportation Leaders Conference in New York, according to a prepared statement.
"Fuel costs continue to be a challenge," he said, but added that long-term coal demand remains promising — and profitable — for UP since more utilities are turning to coal due to high natural-gas prices.
To offset diesel costs, the railroad plans to purchase 1,700 rail cars to improve fuel efficiency between 10 percent and 15 percent.
And UP will continue trying to improve its performance while expanding service into parts of the mid-Atlantic region and Canada in an effort to increase prices later this year, said Davidson.