Union Pacific Case Study for Strategic Alternatives Essay example

6876 Words Jul 5th, 2014 28 Pages
Union Pacific: A Case Study for Strategic Alternatives

Union Pacific Railroad Company (UNP) is one of the four major railroad companies that transports a variety of goods across North America and is an American staple of industriousness and endurance. Union Pacific with its workforce of 43,000 highly trained people has been in operation since 1862, and its span of operation stretches from Western to Southern United States and internationally into Western Canada and Northern Mexico. The American Association of Railroads has classified Union Pacific as part of the Class I Railroad Group, which consists of seven other railroad companies but Union Pacific is by far the standout
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The rise of fuel prices and a growing environmentally-conscience populace have also created opportunity for UNP as they have marketed themselves as fuel-efficient and cost saving alternative. Also, Union Pacific and its competitor, CSX, came to an agreement in 2003 that in essence provided 63 hour coast to coast freight transport, shutting out the trucking industry in the region, thereby making allies of the two companies and demonstrating a willingness to cooperate for the area they share in the competing market.
In addition to competition with rivals and other modes within the transportation industry, UNP is entangled in a web of regulatory agencies and federal enactments that limit its earning potential and cuts into its profit margins. In addition to oversight and safety agencies, such as the Federal Railroad Administration (FRA) and the US Department of Transportation (US DOT), UNP is subjected to the other regulatory groups such as the Surface Transportation Board (STB). The STB which oversees and regulates rates, disputes and mergers in the transportation industry ensures that UNP adheres to strict hours of operation and passenger service requirements. STB imposes heavy fines for any violations of these enforcements and through legislation is looking to expand its role in anti-trust violations. This can significantly affect UNP’s future strategic actions that may include mergers with other rail

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