Union Pacific

Union Pacific owns and runs a 32,889-route-mile freight railroad across 23 western U.S. states and gets paid per shipment: each carload or intermodal container moved from origin to destination is billed under a contract or tariff rate, plus a fuel surcharge. FY2025 (year ended Dec 31, 2025) operating revenue was $24.51B (+1%) on 8.45M carloads; with a 59.8% operating ratio, FY2025 net income was $7.14B (+6%). A pending merger with Norfolk Southern awaits Surface Transportation Board review.

Business Model Canvas
Union Pacific
Research date: Oct 13, 2026
Evidence-backed · sources in companion brief

Key Partners

  • Connecting U.S., Canadian and Mexican railroads (FACT).
  • Only railroad serving all 6 major Mexico gateways (FACT).
  • Two domestic locomotive suppliers (FACT).
  • Labor unions — majority of employees (FACT).
  • STB — rate, service and merger regulator (FACT).
  • Norfolk Southern — pending merger partner (FACT).

Key Activities

  • Build trains in classification yards (FACT).
  • Line-haul moves origin → destination (FACT).
  • Track replacement — $1.99B in FY2025 (FACT).
  • Price contracts, quotes and tariffs (FACT).
  • Safety — PTC + 7,000+ wayside detectors (FACT).
  • Pursue STB approval of NS merger (FACT).

Key Resources

  • 32,889 route miles in 23 states (FACT).
  • 6,964 locomotives owned or leased (FACT).
  • 53,790 freight cars owned or leased (FACT).
  • ~50,700 containers and chassis (FACT).
  • 29,287 average employees in 2025 (FACT).
  • Industrial-park real estate (FACT).

Value Propositions

  • Lower cost per ton-mile than trucks on long hauls (INFERENCE).
  • All major West Coast + Gulf ports (FACT).
  • All 6 major Mexico gateways (FACT).
  • Intermodal service index 99% in FY2025 (FACT).
  • Hazmat-trained, tracked handoffs (FACT).
  • Fewer trucks on highways (INFERENCE).

Customer Relationships

  • Private contracts with key shippers (FACT).
  • Private rate / letter quotes (FACT).
  • Public tariffs for others (FACT).
  • Volume incentives reduce revenue (FACT).
  • Paid after delivery of each shipment (FACT).
  • Sticky — rail-served plants rarely relocate (INFERENCE).

Channels

  • Commodity-group marketing & sales (FACT).
  • Intermodal marketing companies (FACT).
  • Truckload carriers as intermodal customers (FACT).
  • West Coast + Gulf ports (FACT).
  • Interline gateways to East, Canada, Mexico (FACT).
  • Industrial parks on owned land (FACT).

Customer Segments

  • Bulk — $7.59B FY2025 (FACT).
  • Industrial — $8.60B FY2025 (FACT).
  • Premium — $7.03B FY2025 (FACT).
  • Mexico shipments — $2.9B (FACT).
  • Coal & renewables revenue +20%, mostly PRB coal (FACT).
  • Six vehicle assembly plants served (FACT).

Cost Structure

  • FY2025 operating expenses $14.66B (FACT).
  • Compensation & benefits $4.90B (FACT).
  • Fuel $2.39B; $2.49 avg. per gallon (FACT).
  • Depreciation $2.47B (FACT).
  • FY2025 capital investment $3.79B (FACT).
  • 2026 capital plan ~$3.3B (FACT).

Revenue Streams

  • FY2025 revenue $24.51B, +1% (FACT).
  • Freight revenues $23.22B, +2% (FACT).
  • Other revenues $1.29B, −10% (FACT).
  • Avg. revenue per car $2,749 (FACT).
  • FY2025 operating income $9.85B (FACT).
  • FY2025 net income $7.14B, +6% (FACT).
Sources: sec.gov/Archives/edgar · sec.gov/Archives/edgar · sec.gov/Archives/edgar · up.com/announcements/customer-news