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Crew Operations

2

• Crew Dispatching

• Collective Bargaining Agreement

• Customer interactions

• Government regulations

Crew Operations

3

Crew Management Services

• Dispatches approximately

18,000 Train, Engine, and

Yardmen (TEY)

• Maintains calling order of

TEY under the guidelines of

the CBA.

• Responsible for hiring

adequate supply of TEY

employees to run

operations.

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Labor Relations

• Avoid interruption to commerce and carrier operations

• Ensure employee freedom to self-organize and/or join a union

• Ensure prompt and orderly settlement of disputes over rates of pay,

rules and working conditions

• Ensure prompt and orderly settlement of grievances over

interpretation or application of agreements

• To interpret and apply collective bargaining agreement provisions,

and to secure necessary changes thereto, in an accurate manner that

promotes the needs and requirements of customers

• To address disputes with our unions' leadership in a professional,

forthright and effective manner.

http://www.bloomberg.com/news/2011-10-06/rail-strike-threat-blocked-as-obama-said-to-create-emergency-review-board.html

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Operating Personnel

• TEY employees are the Face of Union Pacific

• TEY employees pick up customer loads and drop off empty railcars

• TEY employees interact daily with the customers that Marketing & Sales negotiated shipping rates.

• Marketing & Sales may have started the business relationship with the customers but it’s the TEY employees who perform the superior service that was promised

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Government Regulations FRA Compliance Reporting

1. The Federal Railroad administration is under the Department of Transportation

2. FRA oversees compliance with laws that limit the amount of work a railroad employee can perform and amount of time off required after performing covered service.

3. Covered Service is defined as engaged in or connected with the movement of a train, including a hostler (individual that moves power in a rail yard)

4. Hours of Service laws first enacted in 1907 limits the length of a work day

2008 Rail Safety Improvement Act (RSIA) (excludes passenger service)

1. Limits the number of hours TEY employees can work in a month

2. Provides mandatory rest periods after working

3. Provides mandatory days off after working 6 or more days in a row

4. Limits the length of a duty tour for TEY employees

Oct 15 2011 update to RSIA includes passenger employees

1. Provides mandatory off days after working 6+ days in a row

2. Provides minimum 8’ off after performing covered service

3. Allows different restrictions for employees on day shift and night shift

Feb 29 2012 update to RSIA for freight employees

1. Changes definition of a days work as a 24’ period instead of a calendar day for freight employees

2. Clarifies that a deadhead is not covered service.

3. Limits a railroads ability to communicate with an employee during their off time

• CMTS is Union Pacific's crew tracking software that had to be updated to handle each change in the law http://www.pstechnology.com/

http://www.gpo.gov/fdsys/pkg/FR-2012-02-29/pdf/2012-4732.pdf

http://www.gpo.gov/fdsys/pkg/PLAW-110publ432/pdf/PLAW-110publ432.pdf

https://www.fra.dot.gov/Page/P0541

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Government Regulations (some exceptions for passenger service)

Maximum of 276 on duty hours per month. TE&Y employees are limited to 276 total hours

on duty per month. The law interprets all service performed at the behest of the carrier as on-duty time. This includes

training and safety meetings. Less than 1 percent of UP employees exceed the monthly cap (the equivalent of 23, 12-

hour days.)

Mandatory minimum 10 hours UDR. All TE&Y employees engaged in pool, local, yard or other

service are required to take a minimum of 10 hours of undisturbed rest upon completion of duty tours at home and

away-from-home terminals.

Additional rest if on duty for more than 12 hours. TE&Y employees will receive

additional mandatory undisturbed rest for any on-duty time that exceeds 12 hours on a minute-by-minute basis. For

example, an employee on duty for 13 hours, 10 minutes would receive a total of 11 hours, 10 minutes of undisturbed

rest (10 UDR plus 1 hour, 10 minutes of additional rest).

6 on 2 off. TE&Y employees initiating 6 consecutive on-duty events with out 24’ off in-between events will be

required to observe 48 hours off following the on-duty period on the sixth day. If the employee tie-up occurs at an

away-from-home-terminal, the employee may initiate a seventh day/start and work back to the home terminal. The

employee will observe 72 hours off upon tie-up.

Maximum of 30 hours of limbo time per calendar month. The bill defines limbo time

as any on-duty time past the 12-hour mark.

http://www.law.cornell.edu/uscode/text/49/21103

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Marketing & Sales

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Marketing and SalesInteracts with Union Pacific’s external customers providing shipment

rates and transit times

Responsible for $19.2 billion in freight revenue in 2012 http://www.sec.gov/cgi-

bin/viewer?action=view&cik=100885&accession_number=0001193125-13-045658&xbrl_type=v#

Uses sales figures to provide operations with estimated car loads that

customers expect to ship.

Number of car loads is transformed into number of trains needed which

is then calculated in number of crews needed to ship the customers

goods.

Accurate accounting and bookkeeping is a must so Union Pacific hires

the correct amount of crews. Too few and the customer is waiting for

their products to ship. Too much and Union Pacific loses money in

hiring and training unneeded employees.

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Marketing and Sales

Freight Revenue$19.7B in 2012

2012 Business Mix

SEC filingNotes to financial

statements/nature

of operations

SEC filing Search for revenue

carloads

Agricultural

Products

17% Autos

9%

Coal

20%

Intermodal

20%

Industrial Products

18%

Chemicals

16%

Agricultural

Products

10% Autos

8%

Coal

21%

Intermodal

37%

Industrial

Products

13%

Chemicals 11%

9 million Carloads

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2012 Business Mix$19.7 Billion Freight Revenue Agricultural

Products

17%

Autos

9%

Coal

20%

Intermodal

20%

Industrial

Products

18%

Chemicals

16%

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2012 Business Mix9.0 Million Units

Agricultural Products

10%

Autos

8%

Coal

21%

Intermodal

37%

Industrial Products

13%

Chemicals

11%

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Marketing and Sales

Union Pacific uses a suite of Data & Software Tools including:

Hoovers

PIERS

Pedimento

Reebie

ArcGIS

Global Insight’s Monthly U.S. Economic Outlook

The Data and Software suite allows Union Pacific to do:

Import/Export Analysis

Commodity Flows

Market Sizing & Overviews

Custom Mapping

Industry Overviews

Customer Profiling

Commodity Pricing

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Marketing and Sales

Union Pacific offers 3 tiers of service

1. Boxcar Direct – all rail boxcar transportation requires tracks at the

shippers and receivers docks

2. Boxcar Transload – combination rail and truck service designed for

shippers and receivers that are not rail-served

3. Intermodal – Door to door truck like service products are loaded in

containers and are shipped to intermodal ramps then loaded on

railcars. Product is taken by rail to intermodal ramp near destination

then shipped via truck to the receiver.

http://www.uprr.com/customers/autos/svcs/auto_parts_network_fl.shtml

“Once shipment is underway, national and international customer

service centers provide customers with fast accurate railcar

movement data while simplifying logistics and customs processing”

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Questions?