Union Pacific reported a 16% increase in third-quarter profit Thursday as higher freight volumes, pricing gains and fuel surcharges lifted revenue, with intermodal traffic leading the railroad’s growth.
The Omaha-based railroad (NYSE: UNP) earned $2.08 billion, or $3.49 per diluted share, compared with $1.79 billion, or $3.01 per share, a year earlier. Adjusted earnings of $3.53 per share exceeded the $3.47 consensus estimate compiled by Zacks Investment Research.
Operating revenue increased 15% to $7.2 billion, while freight revenue excluding fuel surcharges rose 6%. Total revenue carloads grew 6% to 2.29 million. Intermodal volume increased 11% to 956,000 containers and trailers, and intermodal revenue climbed 27% to $1.52 billion. Industrial volumes rose 6%, while bulk traffic was essentially flat.
“Union Pacific’s third quarter results demonstrate our ability to safely deliver the service we sold to our customers while efficiently handling 6% volume growth,” Chief Executive Jim Vena said in the earnings release.
Operating income increased 15% to $2.94 billion. The reported operating ratio improved slightly to 59.1% from 59.2%, although the adjusted ratio deteriorated 30 basis points to 58.8%. Higher fuel prices added 140 basis points to the ratio, the company said. Workforce productivity improved 5%, while average terminal dwell declined 2% to 19.9 hours.
Union Pacific reaffirmed its forecast for high-single-digit growth in reported earnings per share for 2026 and updated its capital spending plan to $3.5 billion. Vena also pointed to upcoming steps in the Surface Transportation Board’s review of the railroad’s proposed merger with Norfolk Southern (NYSE: NSC).
Why it matters: Union Pacific’s earnings show how intermodal growth and pricing gains are supporting profits even as higher fuel costs pressure operating efficiency.
Subscribe to FreightWaves’ Rail e-newsletter and get the latest insights on rail freight right in your inbox.
Read more articles by Stuart Chirls here.
Read more:
First look: Norfolk Southern earnings
CSX profit jumps on volume and revenue growth
New York short line wins $11.2 million federal rail grant
Autonomous railcar technology earns $16M federal grant
The post First look: Union Pacific earnings appeared first on FreightWaves.
Norfolk Southern reported higher third-quarter earnings and record revenue Thursday as freight volume grew and fuel surcharges increased, although expenses consumed a larger share of revenue.
The railroad (NYSE: NSC) said revenue rose 14%, to $3.5 billion, on a 3% increase in volume. Higher fuel surcharges accounted for eight percentage points of revenue growth. Income from railway operations increased 5%, to approximately $1.2 billion, while diluted earnings per share rose 7%, to $3.37.
Adjusted earnings per share increased 10%, to $3.62, excluding merger-related expenses and effects of the East Palestine derailment, along with restructuring and other charges in the year-earlier comparison. Adjusted operating income rose 7%, to approximately $1.2 billion.
Despite the earnings growth, Norfolk Southern’s operating ratio, a key indicator of efficiency, worsened 2.8 percentage points, to 67.4%. Its adjusted operating ratio increased 2.1 points, to 65.4%, underscoring pressure on margins even as revenue reached a quarterly record.
Chief Executive Mark George said productivity improvements helped earnings, while tighter trucking capacity increased rail’s appeal to shippers.
“Demand for rail service increased during the quarter, as a tighter trucking market highlighted rail’s competitive advantages and underscored the opportunity for a more efficient, capacity-enhanced freight network,” George said in the earnings announcement.
“We remain focused on investing in a stronger, more resilient rail network that can support growth we see on the horizon,” he said.
Why it matters: Norfolk Southern is benefiting from a tighter trucking market, but stronger freight demand is not translating into better margins.
Subscribe to FreightWaves’ Rail e-newsletter and get the latest insights on rail freight right in your inbox.
Read more articles by Stuart Chirls here.
Read more:
CSX profit jumps on volume and revenue growth
New York short line wins $11.2 million federal rail grant
Autonomous railcar technology earns $16M federal grant
CSX eliminates more than 100 management positions
The post First look: Norfolk Southern earnings appeared first on FreightWaves.
It was a solid third quarter for Ryder, with improvement in just about every metric compared to the third quarter of 2025.
The numbers have been good enough that Ryder (NYSE: R) raised its full-year outlook for 2026. With three quarters in the books, there’s only so much higher it can go. But the company in its third quarter earnings release said it is raising its non-GAAP earnings per share estimate for the year to $14.85-$14.05. In the company’s second quarter earnings, that estimate was $14.40-$14.80. The non-GAAP return on equity forecast was nudged up to 18% to 19% from a flat 18% in the previous forecast three months ago.
Revenue was up in every sector at Ryder. Its Fleet Management Solutions (FMS) segment, which includes its flagship vehicle rental and leasing activities, rose 10%. Supply Chain Solutions (SCS), a contract logistics provider, saw its revenue rise 9%. Dedicated Transportation Solutions (DTS), which is a dedicated carrier that contracts its service out to shippers, increased its revenue 6%.
Earnings before tax at FMS rose 21%. At SCS they were up 7%. But at DTS, that measure fell 5%, due to what Ryder said was “(reflecting) lower operating revenue and a prior year workers’ compensation insurance benefit, partially offset by cost savings from strategic initiatives.”
Used vehicle sales, which Ryder has been trying to restructure the company so that its earnings are not so tied to that market, were strong nonetheless. Used vehicles sold rose to 5,100 from 4,900 a year earlier. But it was the price where the company really benefited from that market, with used tractor prices rising 19% from a year ago, and used trucks climbing 5%.
Prices were improved sequentially as well. For used trucks, the jump from the second quarter was 6%. For tractors, it was 15%.
Used vehicle sales are reported in Ryder’s earnings as a net cost based on provisions for used vehicle sales made by the company. The figure for the third quarter was a net negative $17 million, wider than the positive $3 million a year earlier and negative net $7 million in the second quarter. That is a benefit to the company to have that negative number larger.
In a rapid note put out soon after the release of the earnings, Citi’s Ben Mohr described Ryder’s number as “better than expected,” and highlighted the 77% rental utilization rate. The company’s target is 80%, Mohr said.
He added that the $17 million net benefit on used vehicle sales was wider than the expected $10 million.
On the DTS performance which came up short of the prior year, Mohr said he saw a benefit from tightening driver markets. “DTS is likely facing elevated driver hiring costs/wages/bonuses on ongoing driver market tightening, which should drive a partial offset of shippers outsourcing more to DTS,” he said.
Ryder’s conference call is at 11 a.m. Thursday. The company’s stock is up 29.8% in the last year, but is down about 12.5% for the three months up slightly in the last month. The first numbers out of the gate at about 9:40 a.m. EDT showed a positive reaction to the earnings, with Ryder up 5.92%, or $14.22, to $254.53.
More articles by John Kingston
English language rule’s comments bring criticism from Sikh organization
Texas judge upholds nuclear verdict against C.H. Robinson
CEO’s letter boasts of lots of arrows pointing up at Triumph Financial
The post First look: almost all strong numbers in Ryder’s third quarter earnings appeared first on FreightWaves.
To understand why captives and alternative risk structures are drawing so much attention from fleets right now, it helps to start with an uncomfortable fact about the insurance industry itself: commercial auto liability hasn’t been profitable on an underwriting basis since 2010, when the loss ratio came in at 97.1%. That’s a razor-thin 2.9% margin.
So how do insurance companies stay in business? Frank Kneeland, Senior Vice President of Sales at Reliance Partners, says the answer has less to do with underwriting than most fleet owners realize.
“Most of these insurers are essentially massive banks or investment firms,” Kneeland said. “They’re investing the premium dollars they collect, which is part of why many require a finance agreement or payment in full. They want that money working for them as soon as possible. That’s how they turn a profit even in a bad underwriting year.”
Captive and alternative risk structures are designed to change that dynamic. Rather than handing premium dollars to a traditional insurer and hoping for the best, a fleet that joins a captive retains more responsibility for its own losses. In exchange, the fleet shares in the financial results of the program.
“You’re returning the underwriting profit, the unspent premium, and the investment income that accrued over the term back to the fleet instead of the insurer,” Kneeland said.
According to Kneeland, this has a massive effect on the entire interplay between a fleet and its broker. “It changes the conversation from simply comparing premiums to looking at the fleet’s total cost of risk: claims, expenses, reinsurance, performance, all of it,” Kneeland said.
That, in turn, changes what a broker actually needs to understand about a client’s operation.
“We have to understand how the fleet operates, how claims are handled, and whether its leadership is prepared to manage risk over the long term,” Kneeland said. “A captive can create more control and more upside, but it also requires engagement and discipline.”
Explained simply, a captive gives a fleet a more active role in funding its own insurance losses. In the standard market, performance is pooled whether a company likes it or not.
“Everyone in the standard market is affected if the larger group of insureds performs poorly. Even the best operators running clean can see an increase because of everyone else in the pool,” Kneeland said. “Generally, the bottom 30% of performers end up offsetting everyone else, because auto claims can be so large.”
A group captive narrows that pool dramatically. “When you enter a group captive, you’re shrinking the group down to a very limited pool of best-in-class operators,” Kneeland said. “You’re cutting off the members who were dragging down the standard market the most, while allowing everyone left to share in the underwriting profit and keep rates stable year over year.”
That stability, Kneeland said, draws in the fleets who ultimately become strong candidates. It inherently appeals safety-focused operators who feel like they’ve been subsidizing worse performers for years.
Even among brokers, Kneeland said, there’s a persistent misunderstanding about what a captive actually promises.
“The goal isn’t really about hoping to share in some theoretical underwriting profit,” Kneeland said. “In reality, you’re retaining a higher level of risk, making the interest on your insurance dollars work for you instead of the insurer, and building a claims team you can actually hire and fire as needed. That’s something you never had that level of control over in the standard market.”
The predictability is just as vital as the cost. One of the biggest goals of a captive program is a renewal that fleets can plan around, rather than the kind of blindside still common in the standard market. Many carriers give no indication that anything unusual is coming, then deliver a massive increase just days before the policy renews. A surprise like that can be devastating to a fleet, especially given the thin margins and bottlenecked cash flow that characterize the industry.
Control extends well beyond the balance sheet. Kneeland points to the connection between safety performance and insurance outcomes as one of the most underappreciated benefits of moving into a captive.
“In the standard market, a fleet may feel like its investment in safety isn’t reflected in its pricing,” Kneeland said. “In a captive, members have much more visibility into the program’s losses.”
The advantages apply to a lot more than cost control, too. Fleets that make the move also gain better access to claims data, more active loss-control support, and a longer-term view of their own risk profile.
If your fleet is exploring a captive for the first time, Kneeland breaks the process into three stages: discovery, quoting, and timing.
Discovery starts with understanding a fleet’s operations, current program, financial capacity, and goals, followed by a review of loss history and standard underwriting information to determine whether the risk is even suitable for the structure. From there, the quoting process involves underwriting, actuarial analysis, a review of the captive’s rules and financials, collateral requirements, and working through reinsurance and fronting arrangements.
How long that takes depends heavily on the path. “If a fleet is joining an established group captive, the process may take a few months, depending on how quickly we’re able to get the necessary information,” Kneeland said. “A new program or structure can take considerably longer.”
Timing the start of that process matters just as much as the process itself.
“I like to start this mid-term rather than trying to line it up with the renewal date,” Kneeland said. “This is a more complex product, and clients join because of the benefits it provides, but there’s generally more up-front cost because of collateral requirements. Not being boxed in by a deadline lets the company really learn and understand the commitment before the pressure of a renewal is bearing down on them.”
If there’s one blind spot Kneeland keeps running into, it’s a fixation on premium at the expense of everything else. “Total cost of risk — that’s the piece so many fleets miss, because they’re so focused on the premium number that they don’t look at the full picture,” he said.
The full picture includes losses retained through deductibles, funding collateral, and the expenses that come with absorbing claims.
Kneeland sees one trend in particular gaining traction for the wrong reasons: Risk Retention Groups.
“These are a hugely important part of the conversation right now,” Kneeland said. “A lot of these have incredibly weak financials, an enormous number of exclusions, and no backing from any state guaranty fund.”
Saving a small amount on premium can be a poor decision if a fleet hasn’t actually evaluated the program.
“The right comparison isn’t one premium against another,” Kneeland said. “It’s the full cost, the protection being provided, and how the structure fits the fleet’s risk and financial capacity.”
Why Now
The trucking insurance market’s volatility over the past several years hasn’t gone unnoticed, and Kneeland sees a direct line between that volatility and the growing interest in alternative risk. “When the traditional market gets volatile, fleets start asking whether there are other ways to finance risk and gain more control over their insurance costs,” he said. “Alternative risk structures give qualified fleets a way to take a longer-term view and connect their own performance more directly to their insurance results.”
What’s the underlying cause? “Honestly, I just think the traditional market is such a mess right now that more companies than ever are trying to find ways to control their costs and get rewarded more fairly for their safety efforts,” Kneeland said.
Getting Started
If you’re a fleet owner or manager and you’re sitting on the fence, Kneeland’s advice starts before any underwriting data gets pulled together.
“Have a very honest conversation about your fleet’s current safety program and your overall cost of risk,” he said. “Without a strong safety program, this isn’t going to be the right fit.”
From there, timing becomes the central issue again. “We have to start these conversations early, so the fleet actually understands its options,” Kneeland said. “We don’t want to start this a month before renewal and expect results. Most brokers don’t even present this option or explain it the right way, so education and really understanding the risk matter enormously.”
And for fleets that wait too long to have that conversation, Kneeland said the cost is easy to overlook because it’s invisible. “If you’re a best-in-class operator paying standard market rates with practically no claims, you’re losing underwriting profit, losing the investment income on your own premium, and you’re probably still getting rate increases anyway.”
If you want to dig deeper into captives and alternative risk, you can follow Kneeland’s weekly breakdowns on LinkedIn, where he regularly unpacks these structures for the trucking industry.
Click here to learn more about Reliance Partners.
The post Why More Fleets Are Looking at Captives appeared first on FreightWaves.
Phillips Connect launched two smart trailer products Sunday at the American Trucking Associations’ Management Conference & Exhibition in Charlotte, North Carolina. Insights reads trailer sensor data to diagnose tire and lighting problems. TrailerSignal, a light on the trailer nose, shows green when a trailer is ready to dispatch and amber when it isn’t.
Both target defects that can slip past a walkaround and surface at a roadside inspection. Tire and lighting violations also count against a carrier’s Vehicle Maintenance BASIC under the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program.
In the Commercial Vehicle Safety Alliance’s 2026 International Roadcheck, tires accounted for 2,914 of the 13,924 vehicle out-of-service violations, or 20.9%. Only brake systems produced more. Lights accounted for 1,659, or 11.9%.
“We help you answer those simple questions: are my lights working or are they at risk of failing?” Mark Wallin, president and general manager of Phillips Connect, told FreightWaves.
How fleets catch light and tire defects now
Federal rules require a driver to be satisfied that a truck’s lighting devices and tires are in good working order before driving. Every required lamp must be capable of being operated at all times.
Fleets “rely heavily today on a group of people in the yard to detect issues with a trailer’s lights,” Wallin said. Phillips Connect sensors already reported tire and light health data before Insights.
“Knowing that there’s something unusual on a circuit was the first step. With Insights, we can tell a fleet which circuit has the problem, what’s likely causing it, and what the technician should check,” he said.
Lights Insights names the faulty circuit
Phillips Connect Insights now names the faulty circuit, whether taillights, running lights, or marker lights, and separates partial faults from full ones, according to the company. It suggests a likely cause, such as a burned-out bulb or water in the lamp, and confirms when the fault clears.
Some faults come and go. Wallin described a situation where “a lamp might have a loose wire or water in a bulb, so it doesn’t work when you pick up the trailer in the morning, but as the day heats up the water evaporates and the light works again. Insights catches that pattern, so the technician knows there’s a real problem even when the light looks fine.”
Tire Insights looks for slow leaks
On tires, Insights flags slow leaks and shows which tire is losing air and how fast, even when pressure reads normal or the trailer runs an automatic tire inflation system (ATIS). It also flags ATIS malfunctions, pressure imbalance between paired tires, and miles driven on underinflated tires.
Wallin estimated that “maybe half” of trailers in the market are starting to come with ATIS, and that the systems give some fleets false confidence.
“Fleets running ATIS have made a smart investment in keeping their tires inflated. Insights shows them what that system is compensating for, so a slow leak gets fixed in the shop instead of growing into something worse – like a blowout – is avoided down the road,” he said.
Insights sends issues to fleet, safety, and maintenance teams in the Connect1 platform, urgent tire alerts to drivers through Phillips Connect’s DriverAssist, and diagnostics to technicians through the TechAssist app. It can also open service tickets in a fleet’s maintenance system.
TrailerSignal puts status on the trailer
TrailerSignal gives hostlers, dock crews, technicians, and drivers the same ready-or-not answer with no login or phone, according to the company.
“There are a lot of people in the yard who aren’t looking at a computer or a device, or this information isn’t available in a hostler system, or to your yard check person yet,” Wallin said.
The company rates the light as readable from 50 feet. A solar panel charges a built-in battery, so it works when the trailer is unplugged. It stays lit while the trailer is parked and shuts off once it moves. Installation takes as little as five minutes with no wiring.
Fleets choose which door, tire, light, and liftgate signals turn the light amber. One customer uses it at the dock, where amber tells a driver the trailer doors are still open.
“It can be a very dangerous, high-risk situation if that trailer is pulled away [while] the doors open,” Wallin said.
But the light only knows what the trailer’s sensors know. A fleet running any smart trailer sensor, including liftgate battery, tire, brakes, or more gets a red or amber signal on the nose of the trailer, Wallin said.
Neither release lists pricing, but the TrailerSignal and Insights are available now.
Phillips Connect adds to its trailer platform
The launches follow Phillips Connect’s March expansion into richer brake and liftgate data. The Irvine, California-based company named Wallin president and general manager in May. It plans to extend Insights to cargo activity during loading, unloading, and transit.
Wallin said the two products meet in the shop.
“Our mechanic finds the amber tag, pulls up our app, looks at the health of that trailer, and can find a slow leak,” he said. “Never could have had access to that kind of trailer data before.”
Why it matters: Tires and lights drove nearly a third of vehicle out-of-service violations in this year’s Roadcheck. Phillips Connect is putting its sensor data in front of yard crews, drivers, and technicians to catch those defects before an inspector does. Pricing has not been disclosed.
The post Phillips Connect moves trailer sensor alerts into the yard appeared first on FreightWaves.
Chief Financial Officer Jennifer Hamann will retire in early 2027, Union Pacific (NYSE: UNP) has announced.
Hamann, who joined Union Pacific in 1992, was named CFO in January 2020. She had previously held leadership roles in a broad range of areas, including finance, human resources, marketing and sales, investor relations, and corporate audit.
“For 35 years, she led with integrity and heart, guiding our finances through historic challenges, executing our strategy, mentoring future leaders and representing Union Pacific across the industry,” UP Chief Executive Jim Vena said in release. “Jennifer was tough — she never said yes unless she believed it was the right thing to do for Union Pacific. She made this railroad stronger, and her contributions will be felt for generations. I am deeply grateful for her leadership and friendship.”
Hamann is the first woman to serve as the railroad’s chief financial officer. She was the executive sponsor of LEAD, the company’s women’s employee resources group, and was recognized by The Manufacturing Institute with a Woman MAKE Award for her contributions to the manufacturing and transportation industries.
“It’s been my honor to serve and represent Union Pacific as its CFO,” Hamann said. “I am grateful for all who supported me along the way — my family, friends and the Union Pacific family I’ve worked alongside for nearly 35 years. Becoming the nation’s first transcontinental railroad is the exciting chapter ahead. I remain an ardent supporter of the merger and with Jim and team leading the way, I’m confident of our success.”
Union Pacific said it will announce succession plans at a later date.
Subscribe to FreightWaves’ Rail e-newsletter and get the latest insights on rail freight right in your inbox.
Read more articles by Stuart Chirls here.
Read more:
CSX eliminates more than 100 management positions
Intermodal rail better by 10% in latest count
CSX operations chief to retire
State loan to aid Louisiana port’s new rail connection
Climbing intermodal rail volumes more than treble commodities traffic gains
The post Union Pacific CFO to retire appeared first on FreightWaves.
