本帖最后由 choi 于 6-24-2015 16:03 编辑
Shawn Tully, Profit Engine on the Rails. The very old-economy UNION PACIFIC is just as efficient (or more) at making money as a new-economy icons Apple and Google. Here’s how the railroad giant squeezes the most out of every mile.
fortune.com/2015/06/04/union-pacific-railroad/
Quote:
“In 2014, Union Pacific logged $5.18 billion in net profits on sales of $24 billion, for a return-on-revenues ratio of 21.6%.* ** The key to UP’s remarkable profitability is a highly disciplined investment approach overseen by a department called network planning. Developed over the past decade, the system is implemented by a group of analysts whom employees refer to as the “smart guys” (though many are women). The central tenet of network planning is that every outlay for new track, locomotives, or terminals must yield a return of at least 15%—and the 'smart guys' brook no excuse for failure."
"the US rail market essentially consists of two duopolies: CSX and Norfolk Southern in the Eastern US, and Union Pacific and BNSF in the West. (Two other railroads, Kansas City Southern and Canadian National, operate limited routes in the US.)
"Union Pacific is an expert at constantly, relentlessly improving its efficiency. In a hugely capital-intensive business, that means increasing its volumes of freight far faster than it adds new employees, locomotives, and boxcars. Don’t think that Union Pacific skimps on capital investment. Far from it: Its capital expenditure has almost doubled, from $2.2 billion in 2006 to a planned $4.2 billion in 2015. It simply gets more profit from the dollars invested than its competitors, and serves customers better as a result. Still, the surge in business last year caused logjams in Union Pacific’s normally nimble network. The heavy traffic slowed its trains, and railcars spent far more time in [waiting in the siding] * * * the speed of its trains—a crucial measure of efficiency called 'velocity'—is starting to improve. Now its average speed is 24.5 miles an hour; that’s about 1 mph better than its velocity through most of 2014 * * * That improvement will be crucial: Each 1 mph increase eliminates the need for as many as 200 locomotives.
Note:
(a) This issue is Fortune 500 ranking. This report is under the heading “211,” indicating Union Pacific is ranked 211 this year.
(b) "Like many of Buffett’s investments, BNSF has been wildly successful, more than doubling its earnings since 2009. But Buffett might have been even more successful had he stayed closer to home and bought the railroad with headquarters. A few blocks away from Berkshire in Buffett’s hometown of Omaha: Union Pacific"
(i) BNSF Railway (name adopted in 2005 to replace Burlington Northern and Santa Fe Railway Co (Wikipedia)) is based in Fort Worth, TX.
(ii) Union Pacific has headquarters at Omaha, Nebraska.
(c)
(i) Quotation 1 broaches “a return-on-revenues [sic, should be 'revenue,' in singular form] ratio.”
Return on Revenue
www.investopedia.com/terms/r/returnonrevenue.asp
(Net Income / Revenue)
(ii) Union Pacific's "chief financial officer [is] Rob Knight * * * When Knight took the CFO job at Union Pacific in 2004, UP was the least profitable major railroad. Its operating margin stood at a paltry 10.6%. The following year Knight set a goal of 25% by 2010. * * * By 2008, UP achieved the 25% goal. But Knight didn’t stop there. Today UP’s operating margin stands at 36.5%, and Knight pledges to hit 40% by 2019."
(A) operating margin = operating income / revenue
(B) The difference between "operating income" and "net income" (also known as the "bottom line" due to its location --at the bottom--in the accounting) is shown in the table in
earnings before interest and taxes
en.wikipedia.org/wiki/Earnings_before_interest_and_taxes
(d) "On a late April morning, a female conductor at the Council Bluffs facility is moving train cars. She stands on the side of a single track filled with a long line of refrigerated boxcars carrying oranges, kiwis, and assorted fruits from California. A locomotive sits at the end of the train, ready to push the railcars forward. Around the conductor’s waist hangs a yellow control box about the size of a small backpack, what Union Pacific calls the 'big belt pack.' One after another, she uncouples the lead car, then hits a switch in the belt pack. By remote control, the device powers the driverless locomotive forward, just far enough to push the car onto one of 18 tracks that fan out from the single track. A second employee controls the switches that align the cars with the correct track. Within an hour, she has broken down 150 cars into groups of around 50 cars each that will be joined with more cars, then head to Minneapolis, Des Moines, and Topeka."
(i) Council Bluffs, Iowa
en.wikipedia.org/wiki/Council_Bluffs,_Iowa
(is on the east bank of the Missouri River across from what is now the much larger city of Omaha, Nebraska; the city "was named [in 1852] for an 1804 meeting of the Lewis and Clark Expedition with the Otoe tribe, which took place at Council Bluff [singular form]")
The first transcontinental railroad linked Council Bluffs with Oakland, California.
(ii) Whether it is a subway or (passenger or freight) train, a train is made up of many "cars."
(iii) You can imagine a train of 160 cars is removed one car at a time -- at the front of the train -- into three separate tracks, each with around 50 cars and destined respectively for Minneapolis, Des Moines, and Topeka.
(e) "Knight knew that Union Pacific couldn’t much change its business mix or growth rate. Those factors depended on the economy. Instead, the crucial levers would be productivity (keeping the cost of shipping each carload in check through smart investments to increase the average speed, length, and reliability of trains) and pricing (ensuring that rates consistently rose far faster than costs)."
The "keep * * * in check" is a phrase, but the sentence separates "in check" too far apart from "keep"--so much so that I did not know the two are part of the whole.
(f) "To efficiently handle the growth, Union Pacific is investing heavily in its principal artery for intermodal. That’s the Sunset Route, a 760-mile corridor running from Los Angeles to El Paso. UP acquired the Sunset in its merger with Southern Pacific in 1996. Then, as now, the Sunset Route connected the LA ports to the biggest intermodal destination: Chicago. But that route competed directly with BNSF’s far better intermodal service, and BNSF was getting a lot more of the business. The reason was basic: BNSF’s LA–Chicago route had two side-by-side tracks along almost its entire 2,200-mile distance. By contrast, the Sunset Route was mostly single track. Instead of running trains in both directions, Union Pacific had to park a westbound train on a siding, often for hours, to avoid an eastbound train using the same track. Over the past decade or so, UP has spent $1 billion to equip 80% of the Sunset Route with double tracks, and plans to reach 100% in the next few years."
(i) Sunset Limited
en.wikipedia.org/wiki/Sunset_Limited
(a passenger train; between New Orleans, Louisiana, and Los Angeles, California over the nation's second transcontinental route)
Quote: "West of New Orleans, the route was owned by the Southern Pacific Railroad and is now owned by the BNSF Railway and the Union Pacific Railroad. The name Sunset Limited traces its origins to the Galveston, Harrisburg and San Antonio Railway, which was known as the Sunset Route as early as 1874.
(ii) In the next posting, sidebar (1) has in the first map “SUNSET LIMITED.”
(g) “When the double-tracking is completed, Union Pacific plans to run 90 trains a day on the Sunset Route. To prepare for all that traffic, it has just opened a giant new terminal in the New Mexico desert, near the Mexican border just west of El Paso. The $415 million Santa Teresa facility is the gateway to three major routes, branching to the Midwest and Chicago, Dallas–Fort Worth, and the Gulf Coast. Intermodal trains will refuel and change crews there before fanning out.”
(i) Santa Teresa, New Mexico
en.wikipedia.org/wiki/Santa_Teresa,_New_Mexico
(ii) Santa Teresa
en.wikipedia.org/wiki/Santa_Teresa
(may refer to: People--Saint Teresa of Ávila, or Saint Teresa of the Andes) |
发表于 6-24-2015 15:59:18
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