Union Pacific Corporation ($UNP)

Good afternoon, everyone. We'll get started with our keynote address. It's -- it really is with great pleasure that I'm going to introduce today our keynote speaker, Mr. Jim Vena. As all of you know, he's the Chief Executive Officer of Union Pacific Railroad. I'll do a quick intro. For those of you who are not familiar with Jim, he's been a railroader for more than 4 decades, lots of wealth of information and experience. The vast majority of that was at Canadian National Railroad. He rose in the ranks, became COO there. Then he moved over to Union Pacific first as COO and then now as CEO. And I might have glossed over a few things in the meantime there, but 15 to 20 years I've known Jim. And I got to say he's not only a skilled railroader, but he's a phenomenal leader. He's -- and when we were looking and deliberating to try to find the keynote speaker for this event, -- we wanted to find someone that could speak to major forces of change. And 1 that wouldn't just be railroad focused that could extend across multiple sectors. And I think we found that -- we also wanted somebody that wasn't going to be too theoretical or conceptual. We wanted someone that could give hands-on experience on affecting these changes. -- and entirely from a practical standpoint, I think we found it with Jim. I mean, he's lived and breathed some of the changes that we're going to talk about here. He could speak to them from experience, and I'm very, very delighted to have him on that. Now what are the 2 courses of change that we're going to talk about here today. They are the notion of transformational change and consolidation. Those are 2 aspects that really have profound effects on a company, on the sector, and I think they're great topics for conversation here today. No one better to speak about this than the leader who has been the key architect precision scheduled railroading. For those of you in the railroad industry, you would have -- you'll be very familiar with that. But for those that aren't, it is a major -- it is swept over the railroad sector and over this past decade or 2, and he's really been at the forefront of that. The second thing is consolidation. Consolidation has been a major force of change within many sectors. And now Jim is leading the church on perhaps 1 of the biggest -- the biggest railroad combination of all time within -- with Norfolk Southern. So to drill into the dynamics of those 2 concepts -- we're going to do the same format as we've been doing for this conference, and that's a fireside chat format. But before we dive into that, Jim, I think you have a few prepared comments to make.

You bet you. So -- before this before we started with the merger, this was like 1 paragraph. And now because of the merger, the lawyers got a hold of it. And basically, what it says is, I'm going to be making some forward-looking points, hopefully, nothing that's brand new, but Walter always seems to be able to get something out of me. And if I do appreciate it, just go on our website, take a look at the what we've had or called Diana, who's here in the room with me and our team will fill you in if you want some more detail on what I say. So it's as simple as that. And hopefully, you all read it. So I thought we'd start with where we are as a company. And that's really important for us in that we need to be at the right place. And if you take a look at fundamentally, we are -- I think this morning, we are something like $157 billion company. The reason we're $157 billion company is because we deliver on value to our shareholders with the revenue that we get. And that's really important for us to make sure that we understand that. And what is it that we are -- that we need to deliver we have to be safe. We have to operate a safe railroad. We were the safest railroad in North America last year for employees coming to work and going home the same and not be injured. So that's a real good check mark. On the incident or accident side, we improved by double-digit improvement again year-over-year. We're not the best, and we want to be the best. But guess what, our partner that we want to merge with was the best. You bring those 2 railroads together, you're able to learn and do things that actually win. Service in the railroad industry, anybody that follows it close will tell you that we give more information out than a lot of companies that were required to by statute. So we give train speed, we give different things. All those have nothing to do with service. All those are numbers that give you a guide on how well maybe some operational metrics are what we call service is what we sold the customer, and that's really important. It's what we agreed to and what we're going to do. So we've ended up last year at the highest service level we've ever had both for intermodal and our merchandise business and our bulk business. But on top of that, customers see it and we see customers looking at how we're being able to perform and rewarding us with some awards. Toyota just came out and we won 4 of the 5 awards they gave out for service and quality in the railroad industry. We won 4 of the 5. Now some people would be happy with that, but that's only 80% -- so I said the Kenny and Eric get going, we need to, this year, get that last one. But at the end of the day, pretty happy with that. And what's operational excellence. People talk about PSR, people talk about whatever. It's actually using the assets you have in a real smart way because we are asset intensive. We need to replace ties. We need to place rails. We need to make sure the locomotives run and the railcars and we want to use them as good as anybody. And our metrics will show you that we are consistently the last few years, the best at operational excellence. Some people precipitated down to OR, which is margin -- us railroaders, I don't know why we try to screw that up. It's actually margin. So OR is under 60%, and that's a good place to be. We don't drive the railroad for that OR number, because what I don't want is the marketing people to worry about saying, I can't bring this business in because I might get the OR to go from 59.9% to 60, and we wouldn't be happy. I hate to tell you, if you could grow the business by $500 million, I'll take that 59.9 to 60. And then we'll work hard to figure out how to make it efficient. So that's who we are. This we didn't put the other rail peers on there. But for investors, you can see where we are. In the first quarter, we beat our nearest competitor when it came to OR by over 400 basis points, which gives us a big gap, and it helps us in the way we price, it helps us the way we look at business, and it helps us on what we can bring in by being very efficient. And for our shareholders, highest return on invested capital. So pretty happy. If we can go to the next one, please. How are we doing this? This 1 slide is just 1 snippet because it's what you do across the entire company operationally. But since 2019, when I joined UP, you know what you guys are all real serious. Why don't we have a little bit of fun. I wasn't coming back to work. I was real happy. I retired after 40 years of Canadian National, great company. Love the company still today. I spent a lot of time nights, days, I was an engineer on the ground, okay, a conductor switching boxcars, I was in the engineering department throwing ties out. I never did like conductors too much because they worked us hard that time, but I got over it. It took me 20 years. At the end of the day, that's who I am. I grew up in the railroad from the ground up by accident. I never thought I was going to be a railroader. So I'm retired, went to Mount Everest base camp a few times, north side, true Tibet, south side to Nepal did more blank around it, went to Italy and France went around the whole thing. -- down in South America, Grand Canyon down and up because people told me that you should never hike the Grand Canyon from the top to the bottom and back up in 1 day. So guess what says. I think I can do it. miles, over 5,000 feet of elevation gain. I did it in 7 hours, and I was at home by 6:00 cabin pasta and some beer, okay? So love it. That's what I was doing, and I was enjoying myself. I can't be Union Pacific in 2019 because of the challenge it is the biggest railroad in North America. We own more track miles owned than anybody else, 26,000 versus 21,000 and get the highest revenue. But at the end of the day, it was let's see what we could do with this at this railroad that's not optimized and what can we do to drive it to another place. And this slide gives you a real good indication of that. We took a railroad. If you were operating the business that we're operating today, like we operated it back in 2019, we'd have 20 or percent more trains running we do today. So we did not take the system and take it down and remove assets and track. What we did was, it's given us that buffer that we can grow and we can recover quicker. Now we've done that with train length. And today, we operate 24% less trains than we would have if we had the same model, and our speed is faster. Our customers are seeing less touch points in the cars, less time in the terminals and they get the destination quicker because our car velocity has gone from under -- in the 100s numbers to over 200. And that moves the railcar from origin to destination. I can keep on going like I'd love to. Maybe when I retire I'll get on the speaking circuit, like a lot of these ex-CEOs talking about what they were doing back in 2014. And and they were running a shitty railroad and they want to tell us now how the -- how to run this railroad, and we're running it better than they ever have. And I just say that, Walter did I knew I'd get a little reaction from some of you. But it's amazing how people are experts after they retire. Jim Vena will not go on the speaking circuit. A day I retire okay? I'll leave with my 2 boxes out of my office. I will take the company playing home. But at that point, you won't see me again. You want to come and see me. Come and see me in Scottsdale, Arizona in the winter time. The summertime come to Jazz for Alberta will go hiking, okay? Or in Sorrento, British Columbia on the lake there, that's just an absolutely gorgeous place. That's where I'll be with my grandkids, my kids, my family, my friends, you will not get me out here Walter to speak about the brick-and railroads, okay? Unless somebody says some bad things about me, then I'll come out of retirement for the day. So that's who we are. And I think it's a great picture of what we do. And we carry a buffer of locomotives and a buffer of people and a buffer of resources, because the recoverability makes a big difference in service. If it takes you a month to recover from a weather event, and guess what? That's bad for the customer and they look for options. Let's talk about the railroads for a minute. Canadian National, we used to go through the yellowhead pass to get to Vancouver. Yellowhead pass the highest is just over 3,000 feet. It's not even 4,000 feet. Yes, we get some winter there. It's cold, we get some snow. But I'm telling you, this fricking UP when they built the railroad, who a heck put those mountains on the way to the West Coast of California. We come out with like 6, 7 locomotives while CN can come out with 2 or 3 big difference in the railroad and big difference on it. Somebody decided that you put these mountains in a place where in our mainline coming out of the northern part of California, we get 500 to 800 inches of snow over the donor pass every winter. So it's sort of fun. I love it. But that's why I came back to work, and I like where we are, and I like what we're doing. We probably want to hear a little bit about the merger. We thought this through very carefully. And in Canada, there's two railroads that go across the country. They go Canadian Pacific goes from St. John all the way to Vancouver and Canadian National goes from Halifax all the way to Vancouver and Prince Rupert. They serve customers across the entire country. And I'm telling you, as an ex-CEO. They do a good job on what they charge and as good as anybody to move the products. In the United States, there has not been a transcontinental railroad that will go from ocean East Coast to the West Coast. And I think we limit the capability of customers, shippers suppliers to win in the marketplace because you're competing against more than just your local customer, you're competing against the world, whether it's in soybeans from Brazil coming into Mexico whether it's steel from other places, whether it's copper, whether it's grain products, whether it's ethanol. So at the end of the day, that's what we're building. The merger, when we put the first application in was, we thought, gave a good story and gave the metrics and everything that the STB, the regulator needed to go through. They gave us 3 key areas that we had to update when they didn't accept it, and they're also a couple of small ones. So in this application, we've answered those 3 questions. One was we've done a full asset view and full waybill view of the movement of traffic within the U.S. And that was before we did a sampling. And the reason we did the sampling and instead of the full was we just didn't have the information from all the railroads that would allow us to do the full waybill analysis. But we received all the information and we've got it in there. It really didn't change the flows, the competitiveness. If I step back, we answered the questions pretty clear. And we were absolutely sure this was great for America. And here you are, you're listening to a person that was born in Italy. People ask me the question sometimes are you Canadian, I love Canada. I love growing up in Canada. I wouldn't give -- I wouldn't change a thing that my parents came over with 2 suitcases and moved to Jasper, Alberta 37 years old, okay? I wouldn't change anything. I love the place. But I need an American railroad. And my job is to lead an American railroad not to lead something else, okay? And my job is to make sure that we do the best for Union Pacific, its shareholders, its customers and what we can do in the nation in America to move it. We don't operate into Canada. We can affect what happens in Canada a little bit with the railroads, but that's it. So bottom line is, when we looked at the merger, we thought it was real good for the entire country. And that's why we put it forward. And I know Walter is going to have a whole bunch of questions. The other 2 areas that people wanted to see was we have the small railroad, the number of railroads in the U.S. and even in Canada on. And it's a switching real in St. Louis, that is operated as at the least cost because we don't want to make profit out of it, it's handling the interchange of traffic between the parties. So some of the railroads said that we needed to have more information, even though we said we don't want to ever own 50% of it, but that wasn't good enough. So in this application, we bumped that up and said exactly what the process would be and how we'd get to the solution. And then the last 1 was the release of our document that gives you the red line at what point ourselves or Norfolk Southern could walk away from the deal. And that's normal when you're doing an $85 billion deal. You want to have some rules of the game. As simple as that. What does this do? It's a seamless operation. Think about it for a minute. I'm sure you've had some of the Canadian railroads up on stage, Walter. And I bet you, not one of them came in here and said, "You know what, we're going to stop we think that the business is not quite as good, the railroads in Canada. We should stop in Winnipeg and sell the Eastern portion of our networks so that 2 other railroads could own them and will just interchange in Winnipeg. What you do is you limit the movement of goods. You don't do it at the same price. It's what we're going to offer faster service across the U.S. at less cost -- and the reason it's less cost is, and it's in our application, single-line railroad moves are substantially priced less than if you have multiple parties that need to make a profit on every piece of their movement. And in fact, the reason we can do it cheaper and offer a different price is every time you set a railcar off to another railroad, someone has to switch that railcar. Somebody has to handle it before it gets the destination. And then the other railroad has to have the expense of picking up the railcar, switching it, putting it on a train and moving it. Those 2 steps are removed, and you can go seamlessly from Denver to Indiana. You can go from Michigan on the West Coast easier. So that's what we're selling makes a whole bunch of sense, and those are the facts about where we are. At the end of it, how big are we going to be, because if I was a regulator, I would worry about it. Is it going to be that Union Pacific has 80% of the market. In actual fact, we're going to be less than 40% or around 40%. And on a gross ton basis, we're actually going to be the same size as Berkshire owned BNSF. Is there going to be competition out there? CSX is still going to be there to compete against us. They are not -- and they're a strong, big railroad, well-run smart CEO over there, and he's doing everything he can to make them as efficient as possible to compete. In the West, we have Berkshire owned in Berkshire, let's get serious. This is not little BN. This is over $1 trillion company, Berkshire that owns assets in the oil and gas, owns an insurance everywhere else and has $400 billion in cash in the bank. So they can do what they want to do. And if anybody thinks they're going to be an easy competitor, any customer that has Burton Northern as our competitor today, we'll have it tomorrow. In the entire merger because it's bolt-on, there's only 5 customer locations that we have found that will go from 2 to 1. Maybe there's one more somewhere that we missed with 1 railcar that they ship a year and we'll fix that. So any customer that's going to go from 2 to 1 access, we'll open it up and put another railroad and have access to that customer. Final point is on inter-switching reciprocal switching. In Canada, there's reciprocal switching. Anybody that's a certain distance from an interchange can get access to a customer. I'm all for that. I'm not afraid of doing that, and I've been very public about it, and I have been public for 10 years even before we talked about, okay, mergers, this merger. Because I think if a customer has not provided the right level of service, then you should be able to have an option to go to somebody else. The only thing I ask is that the rules are simple that everybody understands what they are, and we don't pay a whole bunch of lawyers to fight about what the rules are. Lawyers hate that, right? They want the rules to be muddied up so that you spend all your time hiring these expensive law firms -- and listen, we did -- we have a few law firms right now that are helping us, and they're expensive. I should have been a lawyer. It would have been -- no, I'm good. I love to be a railroad. The bottom line is that's who we are, that's what we're trying to do. we know the merger is good. And let me just say this, final point on the merger, and then we'll open it up for questions, Walter. I've taken a lot of time, I apologize. But in business, stop and think about it for a minute. If you're a competitor in your market, in your business, was doing things that were illogical that were not good and their product was not going to be good. Would you complain. That have to be an idiot to complain. In fact, you should be sending them a card telling them how smart they are and how tough their competition is. The reason we have the -- some of the other railroads complaining so hard is -- we're going to provide a level of service when you move products, okay, across the country at such a high level, because we get rid of touch points that they have to compete against that. So if you can't compete, and some of them are already trying to compete by having agreements with other railroads. But those -- the problem with those in our history, they never stay for a long time because people get internal and look at themselves, and they have to do it on price. That's what they're worried about. They're going to have to drop their price in what they charge if they want to compete against the new Union Pacific. While we do not have to because we get the advantage of the efficiency we get and not touch on railcars. I'm excited about this. I think it's -- personally, I think it's a slam dunk. I don't know why it's going to take the STB this long to get it approved. So with that, Walter, I'm good. I want Jennifer to come up here because she's probably better at that.

Yes. Yes, I mean you've touched on the 2 elements of change that we're looking to focus on, 1 being the transformational change of precision scheduled railroading brought into your industry. And really where I want to go is what is it? How does it work? And is there more -- are we going to see more either at UP in general, but in a combined entity as well, and then we can talk a bit about consolidation. But perhaps you were 1 of the original architects of it, the late grade Hunter Harrison. -- kind of created it this notion of precision scheduled railroading. If you get in your own words, just describe what that is, how difficult it is to implement. It really is almost a cultural and full on operational change how difficult was that to manage the first goal and the second go around? .

Well, listen, let's back up a little bit and maybe because we have some time to tell a little bit of history. You learn from great people. [Audio Gap] break it down piece by piece. And that and have the best measures so that you can see that and react quick if things aren't going the right way. When you put those things in place, you're able to drop your dwell time on how long it takes you to move a car through a terminal by 40%. You're able to move trains railcars faster by 25%. And you're able to touch cars less so that you do that. And that's what it's about. But it's not just the operation. If everybody thinks it's just the trains, you need to have that culture through the engineering department. -- on the miles of rail you have to inspect the monetize you put in, how you can do it faster and better and you spend money on technology. we've been able to spend money on technology that allow us to manage but also give us answers on the results. Nowadays, everybody talks about AI, and it's great. It really is. It gives you some information quick especially generative and what you can get out of it. But at the end of the day, we've been trying to do that without the whole AI is look at the information that we get and come to a better solution. And then you have to be top to bottom in the company aligned -- you can't have a CEO that's a PR person or worried about how is coupling look. We're worried about what -- where he's going to go stay where he's going to fly to. You need a CEO that puts his boots on the ground and goes out. I spend time on the ground. And I'm absolutely sure if you interviewed any of the frontline people at Union Pacific, they love it when I show up, No, they don't. They hit on them, make sure that the focus is on what we have to do. So I tried to give it on a high level, and hopefully, I answered that question.

Absolutely. And really, the next question I often -- and you mentioned Paltai, you mentioned Hunter Harrison. The pig that flu is a book that I recommend if anyone is interested in the Pulte story, it's a really good synopsis of that. And then the railroader is another good book that gives the authorized biography of Hunter Harrison. I thought it was a pretty interesting one. But when PSR is "done" and you've got the efficiency that you want. My question is, are you there on Union Pacific right now? Because so often I hear many managers say we're going to pivot to growth now. And the growth doesn't seem to come in the way that we were kind of told where are you in that journey of PSR? And is there still more operating synergy and opportunity to have in -- at Union Pacific? Or are you going to wait it out until Norfolk Southern comes on? And then open it all up again to operational improvement. Is there more left to go?

Walter, there's -- my view of the world of how to operate railroad is, is you need to be very efficient, but you also have to grow your business. The best thing you can do is grow the business. Top line growth is and carload growth is the way it is. And we've done a good job at Union Pacific, growing our business and that at the same time as we want to get more efficient. I'm not into driving the efficiency to the point where it affects us on being able to grow our business. And we're starting to see that. Customers see on our domestic moves on autos, on auto parts, on aggregate. I could go through the whole list. What people sometimes think that they -- it's what we move is a railcar, but we actually move every week, GBP 30 billion just at Union Pacific of products that are used every day by our customers. Now I made that number big by multiplying out because we always like talking big. We're real routers, right? So we talk tons. But you multiply it out, and it's even bigger than that this week. We're running at about 6,000 railcars versus last year at 162,000. So nice growth. We're moving. Multiply the 163 times about 90 year 100 tonnes per car, multiply times 2,000 tons. That's how you have the $30 billion. That's -- there's a lot of product we move. That's how we win is to grow that, Walter.

Let's move over to consolidation now. There's 2 aspects of consolidation, I think that brings significant merit to the railroad industry. And the first 1 is just the fact that you've shrunk your competitive base and 40 years in the industry, you can give us a sense of what it was like in the dark days and what consolidation did from the sector. And then we'll go into the more specific of Norfolk Southern. But in 1980, there were 39 Class I railroads. Right now, there are 6, 2 in each region. Barriers to entry, obviously, are very high. Can you talk a bit about how consolidation affected your ability to do business, your ability to service the customer, deal with your competitors the whole gamut. And like I said before, I know in 2004, the railroad industry saw its renaissance. It wasn't like that before. And just talk a little bit about how consolidation played a role in that.

Well, listen, you just can't compete with customers if you're handing it off 8x to go across the U.S. like it used to, right? You handle it with Union Pacific and the C&W then the Mopac, then you got the North Western and then the Western and then the Southern and then you go deliver it. Every one of those steps cuts you 24 to 48 hours by the time you went across a truck is going to beat you in make 4 other trips. So the consolidation was important. Is the consolidation control so much of the market that you say, listen, there's a problem with that. railroads handle about 11% of the total freight traffic in the U.S. So you start there. at 11%, and we actually have limited ourselves by not having an end-to-end movement from 1 part of the country to the other and the serving Walter as simple as that. I have -- I'm a collector of a few things: cars, vehicles. And also, I have a number of old railroad advertisement panels that they used to use before social media. And I have one from World War II that talks about the 47 railroads that are all combined for the war effort. Canadian National is on there, the Central Vermont is on there, Union Pacific, C&W. So if I ever need a lesson on what happened there, I just go to that baby that's in my office and my home and Scottdale when I take a look at it.

And now let's move now to Norfolk Southern -- we learn back in school that oftentimes acquisitions fail more often than they work. But it seems that in some sectors, they do tend to work very well. I used to cover the waste sector and certainly, the consolidation that there has been working very well. Railroads, it's worked very well. What makes it and what concerns do you have when you look at an acquisition of a railroad size of North Southern, never this size before. What do you worry about? And maybe you talk a little bit about system integration and so on when you touch on that answer?

Walter, I think I think we have been planning for how we will move ahead once the merger gets approved, it's not going to be easy. I'm not trying to say that it's easy, but we are very comfortable that we have the right process in place of how we would handle it. You deal with different cultures, people in the eastern part of the U.S. and at Norfolk Southern have a little bit different culture. -- like let's get serious. People from New Orleans are different than people from Omaha, right? Just culturally, weather-wise, everything else and the same thing from South Carolina to California. So at the end of the day, we need to make sure that we do this in a very systematic step process, not be too hurried and do it in the right way. I have done it before, not at this scale, okay? I was the Senior Vice President when we brought on the EJ&E. I was in Western Canada when we brought in the BC Rail. So there is things that you need to do smart. The first step that we're going to take is guarantee a job for every unionized employee so that when they come to work, they know, anybody the very first day that we buy the company, we've guaranteed a job for life for every unionized employee. We use attrition, okay? If we slow down and look at productivity, it runs about 7%. So it's pretty easy to sort of adjust things in the right way. So the very first thing we're going to do is not try to do the technical piece with the computer systems and everything else together. We can operate the railroad and get the operating plan in place and be able to provide a service for the customers. And we can do that pretty seamlessly by putting the 2 sort of operating plans together into 1. Then we'll stop there, and we're going to have a customer advisory board and probably around 40 people or 45 people, we've analyzed that type of people that we want, and they're going to be shippers and movers of product with us so that we can do a check and balance to see if we're in the right place before we do that. And we'll do their technical sort of net control, the base operating system into that railroad at the right time when we think we're ready. We did it at Union Pacific 2 Januaries ago, -- and that system is actually branch bank and you, we built it, and it is an upgrade on the key foundation program that operates our railroad. All the design, all the payments, everything, the car records all come from that. And also, we have to do that because you could not go backwards, once you shut the other system down, you lose some time. And the worst thing you could do it takes you a long time to recover all those records if you lost them. And we were able to do that seamlessly. Nobody even heard about it. We did it over a weekend. We had a lot of people working on it, and we'll do the same thing with everything at Norfolk Southern. I'm not saying it's going to be easy, but we are absolutely sure that we can do this and do this right so that we don't get the same at times have changed. People talk about -- it's amazing, okay? People talk about the 1990s, there was a problem with railroad mergers. In 1990, did any of you have cell phones. Did any of you be able to get information the way we get it today. Can you ask AI take a picture yourself and say, is this the ugliest haircut you've ever had, and it gives you an answer, okay? So at the end of the day, times have changed, and we have better information, better information flow better ways to react. So I'm very comfortable that we'll be systematic, and we put it in place Walter in a great way.

Let's move on to the regulator decision and the topic of concessions. You've had the the $750 million number out there, how magical is that? Maybe if you could talk a little bit about what hands are in the air right now, what you would be willing and where do you see it logical to give up concessions and where you'd be a little more.

Well, this is truly a bolt-on bolt-on. So what it is, is we are combining in places where we meet today. So it's pretty hard to come up with any concessions. What would we give away, right? So at the end of that, we came up with the 750 because we -- when we looked at it, originally when we put the application in and real early that we thought there would be some loss in business while we were waiting for the merger to have to get approved. But when we've looked at it again, we really -- other than a little bit of overlap, we don't see a lot of area where we have to make some adjustments. The TRA, that terminal, we're going to give up some. That's not financial hit for us. So it's a real low number. It's nowhere near $750 million. That was where we started. And that's why when we put the application in and we've been pretty clear on it, that we think the concessions are 0. Now will we sit down and talk to people, you're better off to be -- to have your neighbor, except that it's a good thing that we're doing. But what I'm not going to do I'm not going to tell my neighbor, he can park on my driveway. Okay? I don't know if any of you in this room would do that, but we have 2 driveways and they want to come over to my driveway because I bought the house next door. That's not going to happen. Now if you want my driveway, I'll charge you monthly $500 a month to park your vehicle in my driveway, but you're not getting it for free. So Walter, let's get serious here. Let me add a lot of overlap. People would love it to get something for free. I'm not into giving anybody anything for free.

What do you -- just to wrap up here, how do you look at in the future when you go 10 years from now and Union Pacific has done its deal with Norvik Southern -- how does it look? And -- has there been other deals? Do you think that this trail blade is now a way to open the door to other deals so that we get more consolidation in the sector? .

I think 5 years down the road, American customer and shippers on the railroad are going to say son of a gun, why didn't they do that 5 years before? Because it worked, makes sense, we can compete better. On the railroad of the industry, absolutely when they figure -- they know it already that they say, Holy cow, what are we going to do? Walter, let's get serious. CSX wanted to merge with us. It's out there. I would say it publicly. So it isn't like they didn't see the value of a merger. So they would love to merge. The only problem they have is at this point, Brookshire has said, no, -- and so far, none of the Canadians have stepped up to see what they could do. Up to them, I'm not worried about what they do. I think there will be some more consolidation. I think we provide better service to customers. I think the customers see a win, whether there's 6 railroads, 5 railroads or whatever that number is. It's a win-win. And I'll be happy I'll be smoking my cigar, having a good Irish 27-year-old red breast whiskey, watching my grandkids or great grandkids and join themselves. And I'll tell you, I won't even be thinking of all of you on the railroad. Okay. So thank you very much.

No, thank you very much for your time, Jim. I appreciate it. Thank you.

Thank you.