Union Pacific Railroad - statistics & facts
As of May 2022, Union Pacific Railroad remained the largest railway company worldwide, recording a 147.23 billion U.S. dollars market valuation. The company also recorded a good performance in its home market. Based on revenue, Union Pacific was the second-leading North American railroad company in 2022. This strong economic performance was propelled by the railroad company's continued recovery from the drop in income linked to the COVID-19 pandemic. In the 2022 financial year, Union Pacific Railroad’s operating revenue amounted to over 24.8 billion U.S. dollars—a 17.9 percent rise compared to 2021 and 3 billion dollars more than its 2019 pre-pandemic results. The company operated in 23 states in the western part of the United States, connecting with Canada's rail system and Mexico's six major gateways.
Union Pacific’s operations rely on premium commodities such as automotive products and intermodal freight, as opposed to bulk carloads, including coal and renewable products. This split in Union Pacific’s operations could lessen the impact of another market challenge. While coal is one of the key commodities traded across North America—in parts due to the United States’ large coal consumption—forecasts are not optimistic for this commodity. As the United States moves toward more sustainable and renewable energy uses, the electric power sector—the leading sector for coal use in the U.S.—has been steadily decreasing its coal consumption.
Despite this encouraging contrast in some of its competitors’ recovery, Union Pacific still has to contend with a new competitors in the market: In December 2021, Canadian Pacific completed its acquisition of Kansas City Southern. As forecast at the time, the merger increased the company’s operations across the three main countries of the region.
Market changes and recovery
Close to 93 percent of the company's operating earnings came from freight revenue, which amounted to over 23.1 billion U.S. dollars in 2022. Union Pacific’s freight traffic included agricultural products, automotive, chemicals, coal, industrial, and intermodal freight. As demand grew across the region, the freight industry picked up steam. While the company’s operating ratio decreased in 2021, down to 57.2 percent, 2022 saw a welcome rise to 60.1 percent. Despite this increase, higher fuel prices and inflation contributed to an increase of Union Pacific’s operating expenses.Union Pacific’s operations rely on premium commodities such as automotive products and intermodal freight, as opposed to bulk carloads, including coal and renewable products. This split in Union Pacific’s operations could lessen the impact of another market challenge. While coal is one of the key commodities traded across North America—in parts due to the United States’ large coal consumption—forecasts are not optimistic for this commodity. As the United States moves toward more sustainable and renewable energy uses, the electric power sector—the leading sector for coal use in the U.S.—has been steadily decreasing its coal consumption.
Market competitors and future challenges
Although Union Pacific was one of the leading rail freight transportation companies in 2022 in terms of market value, it still continues to rank behind its main North American competitor BNSF Railway in terms of revenue. Together, the two railroad companies held most of the North American railway freight market. Like Union Pacific, BNSF Railroad also reported a gradual economic recovery: Its 2022 operating revenues, where the highest on record and proved that the rail firm was dealing with the effects of the COVID-19 pandemic. The same could be observed of Canadian National Railway, another leading North American railroad company based on 2022 revenue.Despite this encouraging contrast in some of its competitors’ recovery, Union Pacific still has to contend with a new competitors in the market: In December 2021, Canadian Pacific completed its acquisition of Kansas City Southern. As forecast at the time, the merger increased the company’s operations across the three main countries of the region.
