Union Pacific Corporation Porter’s 5 Five Forces: 2022 Detailed Overview

Porter’s Five Forces Analysis of Union Pacific Corporation



Key Facts



Union Pacific Corporation (NYSE:UNP)


Transportation and logistics

Founded 1862
Headquarters Omaha, Nebraska
CEOs Lance M. Fritz
Revenues (As per Annual Report) US$ 21.80 billion,2021 Dec 31st

US$ 24.87billion,2022 Dec 31st

Profit (As per Annual Report) US$ 6.5 billion,2021 Dec 31st

US$ 6.9billion, 2022 Dec 31st

Competitors Amtrak, Kansas City Southern, CSX Corporation, Norfolk Southern Corporation, BNSF Railway



Company Overview


Union Pacific Corporation is a railroad and freight transportation Services Company via Union Pacific Railroad .A significant link in the global supply chain, Union Pacific Railroad, one of the most well-known companies in America, connects 23 states in the western two-thirds of the country through train. In 2022, the assets were valued at $65.4billion. The Company is ranked 163rd by Fortune 500 and 211th by Global 2000 Year 2022 categorization.


Porter’s Five Forces Analysis


Porter’s Five Forces Analysis of Union Pacific  is used to determine the company’s competitive position reference to it’s Industry for better strategizing the companies’ operations for higher profits and less competition.


Union Pacific Rivalry among Existing Competitor


  • Union Pacific Corp. Business Segments:

There are three main Business Segments are Premium , Bulk and Industrial which comprises almost 32% ,33% and 35 % of Freight Revenuesin FY 022 declared by Annual Report.The reported revenues are US$ 7.5 billion from Bulk, US$ 8.2 billion from Industrial, US$ 7.4 billion from Premium which equals to US$ 23.15 billion as total freight revenues. Other revenues are US$ 1.7 billion.


The Company experienced a growth of 14% in their revenues in FY 2022.The company generated revenues of US$ 21.8 billion in FY 2021 and US$ 19.53 billion in FY 2020.


The Company experienced a net income of US$ 6.9 billion in FY 2022 ,which is a 6% growth in FY 2022.The company generated US$ 6.5 billion in FY 2021 and US$ 5.3 in FY 2020 as net income.

  • Union Pacific Corp. Global Operations Year 2021: To support the nation’s transportation infrastructure from 2012 to 2021, Union Pacific funded almost $35 billion in investments in its network and business operations. The business groupings for bulk, industrial, and premium products make up the railroad’s diverse mix of customers.

UNP is the railroad that services all six main Mexican gateways. It also operates between all significant ports on the West Coast and Gulf Coast and eastern gates. This train also links to Canada’s rail networks.

  • Investment in Research & Development-Marketing Cost and Brand Image: The fuel efficiency of Union Pacific has increased because of advancements in engineer training, locomotive technology and employee engagement. Due to these efforts, Union Pacific’s fuel efficiency has grown by 22% since 2000.


  • CSX Transportation: Rail-based freight transportation services are provided by CSX Inc. The business brought in $13.1 billion in revenue and $3.9 billion in profit in 2022. By 2022, the assets are being valued $40.5 billion. The business’s headquarters are in Jacksonville, Florida, and it was established in 1827.

  • Norfolk Southern: Transportation business Norfolk Southern Corp. operates in the freight railroad business. The company made $3 billion in profits and $11.1 billion in revenue in 2022. In 2022, the assets are expected to be valued $38.9B. With its main office in Norfolk, Virginia, Norfolk Southern was established on July 23, 1980.

  • BNSF Railway: Burlington Northern Santa Fe Corporation operates the services for railway transportation. BNSF offers commercial and industrial clients freight transportation services, which includes moving consumer, agricultural, industrial and coal products.Customers are provided with services by BNSF Railway in the United States.Total revenue for BNSF Railway in 2021 was $20.7 billion. The headquarter of BNSF is based in Fort Worth, Texas.

Union Pacific Threat of New Entrants


  • Global Transportation Industry:The delivery of cargo by land, air, and sea is a service that logistics firms now offer, adjusting to the ever-changing nature of social and technical developments. In the United States, 43% of intercity freight transportation is handled by rail firms. In 2020, the overall cost of logistics throughout the world jumped to $9 trillion USD. It amounts to 10.7% of the 85.24 trillion U.S. dollars in worldwide Gross Domestic Product (GDP) for that year.
  • Technically Trained Human Capital: Union Pacific has 32,124 employees. An emergency response management center is 24/7 permanently staffed by Union Pacific. The center is informed of crises, hazardous or potentially hazardous situations, and other safety and security problems by its staff, law enforcement, customers and other government officials.


  • High Research & Development Cost for Innovation Leadership: Union Pacific works along with locomotive manufacturers to develop strategies that meet the EPA (U.S. Environmental Protection Agency) guidelines.Since 2009, Union Pacific has spent around to $3.4 billion on new, more fuel-efficient locomotives. At that time, 2,800 older locomotives have been scrapped and about 1,300 new locomotives have been added to the Union Pacific fleet.
  • Technological Advancement: Union Pacific helps customers reduce yearly greenhouse gas emissions by an estimated 20 million or more metric tons because the customers utilize Union Pacific services instead of using vehicle transportation for their shipping needs. In order to do this, UNP prioritized sustainability by using cutting-edge practices and technology to improve fuel efficiency, lower emissions, and operate efficiently.


Union Pacific Bargaining Power of Suppliers


  • Supplies Industry Influencer: The COVID-19’s extreme detrimental effects on daily life and supply networks persisted. In spite of these massive consequences and supply chain disruptions, the Union Pacific team was able to accomplish record-breaking financial results. In 2021, UNP’s earnings per share was recorded as $9.95 which is a 26% increase from the year 2020.

  • Suppliers Collaboration: By increasing the number of lucrative carloads that are compatible with their network and transportation strategy, UNP intends rapid expansion by maximizing the potential of the largest rail franchise in the industry. It can be done by expanding the geographic reach of the business and utilizing cutting-edge supply chain technology. There are different guidelines provide by the Union Pacific Corporation for Suppliers including Supplier Code of Conduct, Sustainable Procurement Policy and Contractor Safety. 
  • Supplier Dependency and Concentration – Efficient Supply Chain and Disruptions:For Locomotive and Rail the Union Pacific Corporation has some dependency which is also evaluated as risk and being declared in their Annual Report. Macro-economic activities slow down and pandemic related to health crises cause slowdowns in supply chain.


Union Pacific Bargaining Power of Buyers


  • High Product Differentiation:According to UNP, Precision Scheduled Railroading (PSR) is the cornerstone for delivering customer-centered operational excellence and growing a more substantial and dynamic service portfolio. By using departure times and point-to-point delivery techniques, the precision scheduled railroading (PSR) can reduce operational ratios and strengthen railroad networks.
  • Customer Satisfaction: Union Pacific operates lines across the western part of the USA from Norfolk. Union Pacific offers value for its more than 10,000 customers by transporting commodities in a safe, reliable, fuel-efficient, and environmentally conscious manner.


  • Brand Loyalty and Customer Base:By achieving their best-ever fuel consumption rate, Union Pacific enhanced brand loyalty and moved closer to their long-term emission reduction targets. UNP was able to help its clients reduce greenhouse gas emissions by almost 23 million metric tons by encouraging them to choose rail over truck.


The Union Pacific is having an estimated market value of US$ 147.2 billion and being considered the largest railroad company in the world while Canadian National Railway is considered second largest by having an estimated value US$ 86.3 billion.


  • Government License, Policies, Rules and Regulations: In coordination with government representatives, Union Pacific keeps an eye out for threats and public activities. When required, UNP may change train traffic flow to reduce risk to local populations and commercial operations.


Union Pacific Threat of Substitute Products or Services


  • Global Freight RailroadMarket Growth:In 2020, the value of the worldwide rail freight market was projected to reach 247.4 billion USD. The market is predicted to expand to over 280 billion dollars in 2026, with a compound annual growth rate of around 2% each year.
  • Global Warming Strategies and Alternate Solutions –Climate Change Action Plan: The Company makes a concerted effort to minimize fuel and energy usage in order to reduce greenhouse gases (GHGs) and regulated air emissions. The corporation intends to attain net zero emissions by 2050, which is in line with Union Pacific’s science-based goal of reducing GHG emissions by 26% by 2030. Also UNP aims to achieve the target of zero gas emissions by 2050.The Company also issued a Climate Change Action Plan in FY 2022.







  1. Forbes, Profile, UnionPacific
  2. Forbes, Profile, CSX
  3. Forbes, Profile, Norfolk Southern
  4. Bloomberg, company profile, BNSF
  5. Fortune 500 ,Union Pacific
  6. Forbes Global 2000 List of Year 2022
  7. Union Pacific, Company Overview. Available at UNP
  8. A Primer On The Freight Railroad Sector, Investopedia. Available at Investopedia
  9. Union Pacific Railroad Company – American railway, Britannica. Available at Britannica
  10. UnionPacific, Company Operations. Available at UNP
  11. UnionPacific, Annual Report 2021. Available at PDF
  12. Union Pacific, Annual Report 2021 and 2022
  13. Union Pacific Reports Fourth Quarter and Full Year 2022 Results. Available at UNP
  14. Statista (September 2021) Projected global rail freight market size between 2020 and 2026(in billion U.S. dollars) | Statista. Availableat.Statista.
  15. Statista (Feb 3, 2023) Logistics industry worldwide – statistics & facts| Statista. Availableat Statista
  16. Statista Union Pacific Railroad – Statistics & facts
  17. Statista (September 2022) World’s largest railway companies as of May 2022, based on market value (in billion U.S. dollars)
  18. Statista (Sep 28, 2022) World’s largest railway companies as of May 2022, based on market value (in billion U.S. dollars).Available at Statista
  19. Union Pacific, Suppliers





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