Tuesday, March 19, 2013

UP’s Koraleski accepts Railroader of the Year Award on behalf of Jim Young

Written by  William C. Vantuono, Editor-in-Chief
Union Pacific President and CEO Jack Koraleski accepted Railway Age’s 2013 Railroader of the Year Award on behalf of company chairman James R. Young during a March 12 ceremony at Chicago’s Union League Club.

“Jim very much wanted to be here tonight and sends his regrets,” Koraleski said. “I’m going to do my best to share with you what he would have said.”

Railway Age selected Young as the 49th recipient of the Railroader of the Year Award based upon his accomplishments building customer value through excellent service and strong financial performance. “As Jim Young so aptly puts it, ‘Union Pacific has evolved from the company that built America by building the first transcontinental railroad to one that today is critical to the global supply chain,’” said Railway Age Editor-in-Chief William C. Vantuono. “For his vital role in that evolution, he is a deserving recipient of our Railroader of the Year award. Under the leadership of Young and such key team members as Jack Koraleski, the current President and CEO, UP recently has started to see what its franchise can deliver for customers, employees, communities, and shareholders. Leading up to its 150th anniversary have been such mile-markers as record full-year earnings in 2010 and 2011; record capital investment in 2010, 2011, and again in 2012; and record levels of customer satisfaction since 2009.”

Koraleski (center, with Vantuono, at right, and Simmons-Boardman Rail Group Publisher Jonathan Chalon) noted that when Young joined UP in the 1970s, John Kenefick, “a legend in his own right,” stressed the importance of management “getting their boots on the ground.” Young “has maintained that precedent,” and “worked extremely hard to lead UP though the years, some of which were pretty rocky. Jim was Vice President of Customer Service Planning and Design in 1997, when service tanked after the Southern Pacific merger. It was really a tough time to support customers, especially when some were calling to say we were putting their business at risk. The implications weren’t lost on Jim, who to this day says our customer service strategy reflects how profoundly our business impacts those we serve.”

Koraleski went on to describe how “service stumbled again in 2003 following a recession, when traffic surged. We has aligned our employee levels so closely with current demand that we couldn’t keep up with dramatic increase in volume that occurred. He recalled how Young, after being appointed President and Chief Operating Officer in January 2004, “knew that we couldn’t continue on this path, and we didn’t. By 2005, demand for rail had never been greater, and we were finally fully resourced. Jim made some dramatic changes to how we ran our operations. Simply put, if we couldn’t do it safely and it wasn’t going to improve service and support customer growth, we weren’t doing it.”

UP, under Young’s leadership, “launched a comprehensive approach to adding needed capacity to eliminate congestion and failure costs, decrease car dwell, and increase velocity,” Koraleski said. “We called it ‘The Unified Plan.’ Jim recognized that railroading is a long term business, and we started making decisions accordingly, planning not just weeks or months out, but years. We started ramping up investments in our infrastructure. From 2005 to 2012, we invested more that $23 billion , including record capital spends the past three years, to improve safety, prevent bottlenecks, eliminate yard congestion, and further expand our capacity and equipment. We have committed to another $3.6 billion this year.”

“Jim emphasizes the importance of agility and recoverability, and as we introduced those concepts into our railroad operations, our service became more competitive, and customers started to recognize the true value we could bring to their businesses,” Koraleski said. “For Jim Young, success always comes with a caution—one we heed today. Our customers expect more value for every dollar we charge them, and shareholders expect to be rewarded with a good return on their investment—rightfully so.”