Union Pacific Corp at UBS Global Industrials & Transportation Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : I like the bar charts. That's a nice set of [four] charts there. Great. Well, thanks so much for those comments. It's great to have the three of you here. I assume Kenny is not here because he's going out selling business, right? I know he wants to do that. So that's a good thing, too. The -- maybe quickly on 4Q, how do you think our -- kind of your markets and your volumes coming in roughly like you would think? Are there -- you had some mix headwinds with the surge in International. Maybe how do we think about the way volume and mix are coming in versus your expectations in 4Q? Any thoughts on that?

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : Okay. So kind of puts and takes, but not much different in terms of overall?

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : Okay. The metrics would indicate the network is running really well in 4Q. Is that -- is it anything we should be aware of on the way the network is running or the cost side or outdoor sports, yes.

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : It's okay? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 04, 2024 / 1:50PM, UNP.N - Union Pacific Corp at UBS Global Industrials & Transportation Conference

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : I thought Eric said it was running great.

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : Yeah

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : Opportunity to do better, right?

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : Let's see. Okay. That's helpful. I appreciate that. How do you think about the -- obviously, kind of recent a couple of weeks ago, we get the election results and you get a fair bit of news flow and commentary on tariffs and things like that. So I guess, how do you think about the customer response so far? And is there some increase in enthusiasm for the -- you have a result from the election, that uncertainty is behind you. Now you can invest more, be more optimistic. Is that coming through somewhat? Or how do you think about that as a component? And then also a second piece would just be how do you think about tariffs and if there are significant tariffs on Mexico and Canada, is that a meaningful impact to you? So two different things.

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : If you build a plant in Monterrey or San Luis Potosi or wherever you're doing in Mexico. It's not like you can easily move that, so one framework could be that, okay, there can be some additional friction, but the customer response could easily be that, okay, now it's kind of a cost, but I can't change where the plan is based on that. So ultimately, there's some risk, but more likely not to be a big impact. Do you think that's reasonable? Or is it just like, hey, it's hard to take much of a view right now, and we just see what happens?

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : So we actually had -- Patrick Fuchs was here yesterday and Ian Jefferies as well. We had some -- did some -- we split a spot with those two. And we talked about some of the regulatory things. I think there is some optimism certainly that there can be a different approach with a new FRA leader. And that maybe some of the technology that you've developed that can be used more aggressively. How do we -- I think in particularly on the maintenance side, right? So how should I think about what needs to change at FRA? And if it does change, then is that you need fewer maintenance people to inspect track and cars? Or what's the kind of flow of that or the impact if it plays out in a constructive way at FRA over a couple of years?

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : Sure.

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : Sure. And actually, one of the things we heard yesterday in the discussion I mentioned was setting clear deadlines and then meeting those deadlines from the regulators. So seemed pretty constructive commentary.

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : There you go. So how do we think -- I want to talk a little bit about 2025. How do we think about you need to plan in advance from a T&E headcount perspective. Let's say, it's a six month, I don't know, I asked CSX, they said really six to nine months in terms of kind of actually getting people into training from a conductor perspective and then getting them out on the system. So presumably, you already have new hires coming in to reflect a certain expectation for '25. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 04, 2024 / 1:50PM, UNP.N - Union Pacific Corp at UBS Global Industrials & Transportation Conference Are you optimistic? Are you hiring so that you can handle stronger volume growth for next year? Are you taking kind of a cautious approach that says, hey, we'll match attrition, and we'll keep headcount flat? Or how do you think about the kind of planning for '25 and then what kind of baseline view or base case, I should say, I know there are multiple scenarios. But what do you think about for a base case view on '25 and how you plan for that?

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : Do you think -- like are you still a little bit overstaffed today? I mean you mentioned the union agreement and how that's a little bit of a constraint, but is there still some level of kind of overstaffing, if you will?

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : How do you think about where the network is at, where the culture is at? You were the Chief Operating Officer, 2019, 2020. Made big changes. You've been what is it, I don't know, 15 months this time around something like that. And so more pretty quick responsiveness. Is -- what's left to go, right? Like there's a continuous improvement, so you're always going to do better. But are there any areas that you say, oh, this is a little more -- a little bit of a bigger opportunity for the network to run better for our asset utilization to be stronger. Is any of that left? Or is it just like continuous improvement?

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : So we're actually at time, but I want to ask like just one last quick one, Jim. Are you optimistic about growing volume next year? I mean you're running the network well, you've got a lot of initiatives. Hard to tell what markets do, but are you optimistic that you're going to see some volume growth next year?

Question: Thomas Wadewitz - UBS Securities LLC - Analyst : Excellent. Jim, Jennifer, Eric, thank you so much for joining us. I really appreciate it.