Feb. 28, 2019 A Reliable Service Product SWARS 2019 Annual Meeting Kenny Rocker Executive Vice President Marketing & Sales 1
UP SOUTHWEST THANK REGION* YOU FAST SOUTHWEST FACTS ASSOCIATION 3,700+ OF RAIL Different Commodities SHIPPERS 11% UP Volume To/From Mexico UP hauls more than 6.6 million carloads per year to / from the Southwest Region *Represents UP shipments to/from AZ, AR, S. CA, CO, KS, NM, OK, TX, and UT for the FY 2018 6,500 Customers Served THE SOUTHWEST IS IMPORTANT SWARS TO OUR BUSINESS 2
U N I F I E D P L A N 2 0 2 0 3
Unified Plan 2020 Objectives Simplify Business Model for Greater Reliability Focus on Moving Cars vs. Trains Utilize General-Purpose Trains by Blending Existing Train Services Develop Plan with and by Those Closest to the Work C OMMUNICAT E P R OACTIVELY With Customers 4
Unified Plan 2020 What Customers Can Expect Unified Plan 2020 Dwell Focus on Moving Cars Minimized Car Dwell Scheduled Service Improved Locomotive & Crew Availability Customer Benefits More Reliable & Predictable Service $ Consistent Supply Chain Less Carrying Costs Reduced Failure Costs Real Examples: Consistent Day of Week Service Less Rail Cars Improved Customer Crew Resources and Productivity 5
Accelerating Implementation Across Network Unified Plan 2020 Update Portland Eugene Oakland Seattle Hinkle Roseville Stockton Bakersfield Los Angeles Eastport Nampa Las Vegas Yermo Pocatello Green River Ogden Cheyenne Elko Salt Lake City Grand Jct Denver West ColtonPhoenix Phase 1: Mid-America Tucson El Paso Nogales Phase 2: Sunset & LA-Chicago Phase 3: PNW, Nor Cal & I5 Pueblo Pecos Eagle Pass North Platte Council Des Gibbon Bluffs Moines Laredo Marysville Topeka Duluth Minneapolis/St. Paul Wichita Ft. Worth San Antonio Jeff City Parsons Little Rock Texarkana Dallas Longview Houston Beaumont Angleton/ Freeport Brownsville Clinton Kansas City Milwaukee Chicago Salem Memphis Pine Bluff Alexandria St. Louis Livonia New Orleans Began Planning Phase 2 in Nov. 2018 Phase 3 Planning Started Jan. 28 ~490 Transportation Plan Changes Made So Far 6
Freight Car Velocity Car Trip Plan Compliance Speeding Up the Network Operating Inventory Terminal Dwell Mutually Improving Asset Utilization Providing More Reliable Service Improving Your Supply Chain 7
Unified Plan 2020 - System Key Performance Indicators Good Freight Car Velocity (Daily Miles per Car) 174 184 Full Year Record +6 % Good Operating Inventory 206 175-15 % Good Sep 2018 Jan 2019 Car Trip Plan Compliance (% Cars On Time) 61% 73% +12 points Sep 2018 Jan 2019 Faster Car Cycle Time Fewer Cars Online Reduced Terminal Dwell Sep 2018 Jan 2019 8
Extreme Winter Weather Impact February Service Challenges Mph 26 24 22 Train Velocity (AAR Train Speed) Feb 2018 Severe Winter Storms in Midwest Negatively Impacting Network Fluidity Rerouting Trains Away from Congested Gateways and Terminals Deploying Additional Resources 20 Jan-19 2/1/19 2/8/19 2/15/19 Hrs 32 30 28 26 24 22 Dwell Times (AAR Terminal Dwell) Feb 2018 Jan-19 2/1/19 2/8/19 2/15/19 Great Lakes Service Unit 9
WORKING COLLABORATIVELY WITH CUSTOMERS 10
Working Collaboratively With Customers Customer Pre-Blocking Unit to Manifest Service Conversions Customer Notifications WORKING COLLABORATIVELY WITH CUSTOMERS 11
Tariff Simplification: Freight Claims Self-Service: 600 Pages Down to 30 Pages Improving Customer Experience Shipment Visibility: Proactive Notifications: Data City: AB ABCC1234 ABCC5678 XYZZ1234 You Are Next Local Service Today Ease of Doing Business Self Service Faster Response Time Improved Communication 12
Our Journey with Unified Plan 2020 Fully Engaged and Focused Team Walking with Customers Throughout All Phase Cutovers Committed to Deliver Reliable Service 13
AMERICA S RAILROAD 14
Real Talk 15