Union Pacific Corporation
1400 Douglas Street
Phone: (402) 544-5000p:402 544-5000 OMAHA, NE  68179  United States Ticker: UNPUNP

Cash burn Wildfires and 'violent' weather leave US railroad giant facing $100m bill

The financial impact of wildfires and heavy rains on the Union Pacific railway so far this year could top $100m, with intensifying effects of climate change having brought cascading disruptions to the company's 32,000- mile network.

"It's real money. It's a real impact," chief executive Lance Fritz told the Financial Times. "Weather is becoming more violent and we see that."

Union Pacific is North America's largest listed freight rail operator, serving cities as far east as Chicago and New Orleans and as far west as Seattle and Los Angeles. The group took $19.5bn in revenue last year.

Much of the US west has been in drought this summer, with bouts of roasting temperatures. California may experience what used to be oncein-a-decade wildfires almost every other year, scientists have said, because of more extreme heat and drier conditions.

The fires on the west coast forced Union Pacific to reroute trains through Salt Lake City, Utah, requiring labour, equipment and locomotives to be redeployed from elsewhere at a time of deep strain in global supply chains.

Wildfire risk also snarled railways in Canada in July, when the transport ministry halted service for two days in parts of British Columbia and cut speeds nationally when certain temperatures were reached. Local media reported fire damage to a Canadian National rail bridge in Lytton, BC.

North American railroads have always been vulnerable to severe weather including extreme cold, snowstorms and hurricanes. However, in some cases these are intensifying in power and precipitation.

Wildfires were "just an annoyance", said Rick Paterson, an analyst at Loop

Capital, "but in 2021, for the first time ever, because of climate change, they're now in the mix in terms of serious threats to operations", affecting every part of a rail operator's cost structure.

The effects of climate change on railways would be an afterthought to investors until there was a meaningful impact on companies' revenues and profits or typical seasonal weather risks were reshuffled, said Chris Wetherbee, an analyst at Citi.

Fritz said Union Pacific was taking protective measures such as raising tracks out of flood plains, installing bigger culverts to ease the flow of water and working to get better weather predictions. But there might be "a limit to how proactive [railways] can be in terms of climate resiliency", said Paterson. "They're always under pressure from Wall Street about spending too much money." See Lex

Related Businesses
- - Customer

Copyright © 2021 by (Ticker: CRMZ®). All rights reserved.  You are not permitted to use this report or the information contained herein for any purpose not expressly permitted by, Inc. Except as expressly permitted by, Inc., you are not permitted, in whole or in part, to copy, alter, correct, adapt, translate, enhance, lease, sell, sublicense, assign, distribute, publish, otherwise make available to any third party, or prepare derivative works or improvements of this report or any of the information contained therein. You are not permitted to reverse engineer, disassemble, decompile, decode, or adapt the software, algorithms or other processes used to prepare this report, or otherwise attempt to derive or gain access to the source code of same. You agree not to remove, alter, obscure, combine or otherwise change any disclaimers, trademarks, copyrights, other intellectual property rights, proprietary rights, or other symbols, notices, marks, or serial numbers on or relating to any copy of the report or on marketing or other materials that, Inc. may provide to you. You will not use this report in any manner or for any purpose that infringes, misappropriates, or otherwise violates any right of any party, or that violates any applicable law.  
The FRISK® scores, agency ratings, credit limit recommendations and other scores, analysis and commentary are opinions of, Inc. and/or its suppliers, not statements of fact, and should be one of several factors in making credit decisions.  Any reliance you place on the information in this report is strictly at your own risk. Except as expressly provided by, Inc., no warranties or representations of any type, including without limitation of results to be obtained, merchantability or fitness for a particular purpose, are made concerning any part of, Inc.’s service, including without limitation the FRISK® scores.  The information published above has been obtained from sources CreditRiskMonitor considers to be reliable., Inc. and its third-party suppliers do not guarantee or validate the accuracy and completeness of the information provided in this report, the underlying information input to create the FRISK® scores, and specifically do not assume responsibility for not reporting any information omitted or withheld.  By using this website, you accept the Terms of Use Agreement
Contact Us: 845.230.3000
Fundamental financial data concerning public companies may be provided by Refinitiv (click for restrictions)
Tuesday, October 26, 2021