Union Pacific 2010 Annual Report Download - page 27

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27
Average Revenue per Car 2010 2009 2008
% Change
2010 v 2009
% Change
2009 v 2008
Agricultural $ 3,286 $ 3,080 $ 3,352 7% (8)%
Automotive 2,082 1,838 2,017 13 (9)
Chemicals 2,874 2,761 2,818 4 (2)
Energy 1,697 1,543 1,622 10 (5)
Industrial Products 2,461 2,388 2,620 3 (9)
Intermodal 974 896 955 9 (6)
Average $ 1,823 $ 1,718 $ 1,848 6% (7)%
Agricultural Products – Higher volume, fuel
surcharges, and price improvements increased
agricultural freight revenue in 2010 versus 2009.
Increased shipments from the Midwest to export
ports in the Pacific Northwest combined with
heightened demand in Mexico drove higher corn
and feed grain shipments in 2010. Increased corn
and feed grain shipments into ethanol plants in
California and Idaho and continued growth in
ethanol shipments also contributed to this increase.
In 2009, some ethanol plants temporarily ceased
operations due to lower ethanol margins, which
contributed to the favorable year-over-year
comparison. In addition, strong export demand for
U.S. wheat via the Gulf ports increased shipments
of wheat and food grains compared to 2009. Declines in domestic wheat and food shipments partially
offset the growth in export shipments. New business in feed and animal protein shipments also increased
agricultural shipments in 2010 compared to 2009.
Lower volume and fuel surcharges decreased agricultural freight revenue in 2009 versus 2008. Price
improvements partially offset these declines. Lower demand in both export and domestic markets led to
fewer shipments of corn and feed grains, down 11% in 2009 compared to 2008. Weaker worldwide
demand also reduced export shipments of wheat and food grains in 2009 versus 2008.
Automotive – 37% and 24% increases in shipments
of finished vehicles and automotive parts in 2010,
respectively, combined with core pricing gains and
fuel surcharges, improved automotive freight
revenue from relatively weak 2009 levels. Economic
conditions in 2009 led to poor auto sales and
reduced vehicle production, which in turn reduced
shipments of finished vehicles and parts during the
year.
Declines in shipments of finished vehicles and auto
parts and lower fuel surcharges reduced freight
revenue in 2009 compared to 2008. Vehicle
shipments were down 35% and parts were down
24%. Core pricing gains partially offset these
declines. These volume declines resulted from economic conditions that reduced sales and vehicle
production. In addition, two major domestic automotive manufacturers declared bankruptcy in the second
quarter of 2009, affecting production levels. Although the federal Car Allowance Rebate System (the
“cash for clunkers” program) helped stimulate vehicle sales and shipments in the third quarter of 2009,
production cuts and soft demand throughout the year more than offset the program’s benefits.
2010 Agricultural Revenue
2010 Automotive Revenue