Union Pacific Corporation (NYSE:UNP) Q2 2020 Earnings Conference Call - Final Transcript
Jul 23, 2020 • 08:45 am ET
Thank you. [Operator Instructions] And our first question is from Chris Wetherbee with Citi.
Yeah. Hey, great. Thank you. Jim, maybe a sort of bigger picture question, when you think about what you've been through in terms of a very rapid decline in volume and then kind of a bounce back as we've seen here you clearly made some strong efforts to control costs and sort of right size the network to a degree. Do you think this sort of, I guess, improves the potential of the business as you look forward, are there lessons learned from here structurally that I think will potentially benefit, and when you think out to 2021, if you'd allow me. I guess, maybe how should we be thinking about incremental margins? Has that changed? Is any of that math changed based on what you guys have done so far?
Lance M. Fritz
Why don't I just start with the -- Chris and I appreciate the question. So, I think, key to look at is, you always learn something and when you -- I've been railroading for a long time. I've seen drop in business. This was a big drop. The good part about it was we were set up in the right way. We were productive before. We had already started in a lot of things from an engineering, mechanical, operations, local service, five hump yards shutdown, touch point jobs.
So, we have done lots to be able to be ready for any action that was going to happen. And we took the right actions this quarter and you can see it in the key performance metrics. Those are productivity numbers. Those are not against -- so we were able to drop more than what the business level changed on us. So what we learned was and I knew it and the team knows it, there is more there. So what we figured out was we can do more with less. And even more than we thought.
So, across the spectrum and how we look at it, we've always balanced, Chris, and this is real important and you heard Kenny talked about this, it's about service, too. We did not take and make all the cuts, just so that we could drop our cost down and impact our service because we want to win in the marketplace and Kenny is optimistic that we're headed in the right way there.
And as regards your incremental margin question for next year, Chris, of course, we don't guide on incremental margin. But we do remain optimistic about in a world where we get volume growing, we're going to generate productivity. We've got a pricing structure that works that should generate improved margins.
Got it. Thank you very much. Appreciate it.
The next question is from the line of Ken Hoexter with Bank of America.
Great. Good morning. Lance or Jim, Jim you just mentioned kind of some increased competition and the -- given the truck market is getting tighter and prices