Union Pacific 2005 Annual Report Download - page 28

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Agricultural – Price increases and fuel surcharges
increased agricultural commodity revenue in 2005.
Total carloads did not increase from 2004. Carloads of
grain products increased during 2005 as we shipped
more dry feed ingredients to Mexico and more corn to
ethanol producers. Higher demand for ethanol reflects
the impact of energy demand, rising crude oil prices,
and limited capacity of domestic refineries. Reduced
carloadings of sugar beets partially offset the gains.
Declining carloads of feed grain and reduced shipments
of wheat both contributed to lower whole grain
shipments. ARC improvement in 2005 resulted from
price increases, fuel surcharges, and the positive impact
of a larger percentage of carloads with longer average
lengths of haul.
Increased demand for dry feed ingredients and
domestic feed grains drove the improvement in 2004.
Export corn and soybean shipments also posted
revenue gains from rising demand for shipments to the
PNW. Revenue also increased through additional
shipments of export wheat to Mexico and Gulf ports.
ARC grew due to a higher percentage of shipments with
longer average lengths of haul, as well as price increases
and fuel surcharges.
Automotive – Revenue increased in 2005 primarily due
to fuel surcharges and price increases, which also
drove ARC improvement. Carloads decreased due to
lower shipments of domestically manufactured
finished vehicles and automobile parts and materials,
reflecting continued weakness in this sector.
Increased volume of both finished vehicles,
primarily from international shippers, and automotive
materials shipments drove revenue growth in 2004.
This growth was partially offset by a decline in
shipments for domestic manufacturers due to lower
production levels and weaker sales. ARC improved
slightly in 2004 due to fuel surcharges and the
favorable impact of more shipments with longer
average lengths of haul.
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