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Union Pacific to Implement Precision Scheduled Railroading

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Union Pacific Corporation (UNP - Free Report) has announced a new operating plan — Unified Plan 2020 — incorporating the Precision Scheduled Railroading principles.

The plan is a notable move toward the company’s aim at ensuring a safe, reliable and efficient railroad operation. Benefits from the plan are anticipated to aid Union Pacific in achieving an operating ratio (operating expenses as a percentage of revenues) of 60% by 2020 and thus pave the way for an operating ratio of 55%.

The Unified Plan 2020 will include principles such as focusing more on operations pertaining to moving cars than moving trains, balancing train movements for better utilization of crews as well as rail assets and several other factors catering to an improved operational efficiency.

The Precision Scheduled Railroading, which improves operational efficiency, reduces network complexity and also provides better reliability to customers, already exists at some of the North American railroads including CSX Corporation (CSX - Free Report) .

The plan is set to launch on Oct 1 and is expected to be rolled out in phases to cover the entire Union Pacific rail network. It will first be implemented on the railroad’s North/South corridor, creating smoother connectivity between Wisconsin and Texas. The initial enforcement of the plan across the whole network is anticipated by 2020.

Zacks Rank & Key Picks

Union Pacific carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are SkyWest, Inc. (SKYW - Free Report) and Trinity Industries, Inc. (TRN - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest and Trinity have rallied more than 52% and 20%, respectively, in a year.

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