Union Pacific’s stock movement
Union Pacific (UNP) is the largest Class I railroad in the United States by revenues. On January 7, the company’s shares rose 6.7% in after-market trading and touched $147.75. Union Pacific stock closed at $138.65 on January 7—marginally up 0.62% from its closing price of $137.79 on January 4. The euphoria in the stock was driven by the announcement of railroad industry veteran Jim Vena as Union Pacific’s COO—effective January 14.
Investors should recall that Union Pacific hopped on the Precision Scheduled Railroading model in the fourth quarter. Market Realist thinks that Union Pacific will be the most watched railroad in 2019.
Union Pacific’s new model
Vena, who retired in June 2016, was Canadian National Railway’s (CNI) executive vice president and COO. He has a strong 40-year career at the railroad. Vena is seen as a disciple of famed railroader E. Hunter Harrison. Harrison is responsible for Precision Scheduled Railroading in North America. Vena will be responsible for the operational-related aspects at Union Pacific. He will be spearheading the railroad’s Unified Plan 2020, which was announced in October. Vena will report to Lance Fritz—Union Pacific’s chairman, president, and CEO.
Regarding the announcement, Fritz said, “Unified Plan 2020 combines precision scheduled railroading principles with our own UP Way tools and best practices.” He also said, “We have been making excellent strides rolling out Unified Plan 2020, and Jim’s vast knowledge of the precision scheduled railroading model brings significant experience and expertise that will enhance the work already underway.”
During Vena’s term at Canadian National Railroad, the company had the North American rail industry’s best operating ratio along with the best safety incident ratio in the company’s history. The US Class I railroad industry (XTN) has witnessed heavy cost-cutting in recent years. Union Pacific joins the fray along with Canadian National Railway, Canadian Pacific Railroad (CP), and CSX (CSX) which have been running their operations on the Precision Scheduled Railroading technique.