Union Pacific 2010 Annual Report Download - page 33

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33
Operating/Performance Statistics
Railroad performance measures reported to the AAR, as well as other performance measures, are
included in the table below:
2010 2009 2008
% Change
2010 v 200
9
% Change
2009 v 200
8
Average train speed (miles per hour) 26.2 27.3 23.5 (4)% 16 %
Average terminal dwell time (hours) 25.4 24.8 24.9 2 % -
Average rail car inventory (thousands) 274.4 283.1 300.7 (3)% (6)%
Gross ton-miles (billions) 932.4 846.5 1,020.4 10 % (17)%
Revenue ton-miles (billions) 520.4 479.2 562.6 9 % (15)%
Operating ratio 70.6 76.1 77.4 (5.5) pt (1.3) pt
Employees (average) 42,884 43,531 48,242 (1)% (10)%
Customer satisfaction index 89 88 83 1 pt 5 pt
Average Train Speed – Average train speed is calculated by dividing train miles by hours operated on our
main lines between terminals. Maintenance activities and weather disruptions, combined with higher
volume levels, led to a 4% decrease in average train speed in 2010 compared to a record set in 2009.
Overall, we continued operating a fluid and efficient network during the year. Lower volume levels,
ongoing network management initiatives, and productivity improvements contributed to a 16%
improvement in average train speed in 2009 compared to 2008.
Average Terminal Dwell Time – Average terminal dwell time is the average time that a rail car spends at
our terminals. Lower average terminal dwell time improves asset utilization and service. Average terminal
dwell time increased 2% in 2010 compared to 2009, driven in part by our network plan to increase the
length of numerous trains to improve overall efficiency, which resulted in higher terminal dwell time for
some cars. Average terminal dwell time improved slightly in 2009 compared to 2008 due to lower volume
levels combined with initiatives to expedite delivering rail cars to our interchange partners and customers.
Average Rail Car Inventory – Average rail car inventory is the daily average number of rail cars on our
lines, including rail cars in storage. Lower average rail car inventory reduces congestion in our yards and
sidings, which increases train speed, reduces average terminal dwell time, and improves rail car
utilization. Average rail car inventory decreased 3% in 2010 compared to 2009, while we handled 13%
increases in carloads during the period compared to 2009. We maintained more freight cars off-line and
retired a number of old freight cars, which drove the decreases. Average rail car inventory decreased 6%
in 2009 compared to 2008 driven by a 16% decrease in volume. In addition, as carloads decreased, we
stored more freight cars off-line.
Gross and Revenue Ton-Miles – Gross ton-miles are calculated by multiplying the weight of loaded and
empty freight cars by the number of miles hauled. Revenue ton-miles are calculated by multiplying the
weight of freight by the number of tariff miles. Gross and revenue-ton-miles increased 10% and 9% in
2010 compared to 2009 due to a 13% increase in carloads. Commodity mix changes (notably automotive
shipments) drove the variance in year-over-year growth between gross ton-miles, revenue ton-miles and
carloads. Gross and revenue ton-miles decreased 17% and 15% in 2009 compared to 2008 due to a
16% decrease in carloads. Commodity mix changes (notably automotive shipments, which were 30%
lower in 2009 versus 2008) drove the difference in declines between gross ton-miles and revenue ton-
miles.
Operating Ratio – Operating ratio is defined as our operating expenses as a percentage of operating
revenue. Our operating ratio improved 5.5 points to 70.6% in 2010 and 1.3 points to 76.1% in 2009.
Efficiently leveraging volume increases, core pricing gains, and productivity initiatives drove the
improvement in 2010 and more than offset the impact of higher fuel prices during the year. Core pricing
gains, lower fuel prices, network management initiatives, and improved productivity drove the
improvement in 2009 and more than offset the 16% volume decline.
Employees – Employee levels were down 1% in 2010 compared to 2009 despite a 13% increase in
volume levels. We leveraged the additional volumes through network efficiencies and other productivity
initiatives. In addition, we successfully managed the growth of our full-time-equivalent train and engine
force levels at a rate less than half of our carload growth in 2010. All other operating functions and