Greetings, and welcome to Union Pacific's 1st quarter earnings call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow today's formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. As a reminder, this conference is being recorded and the slides for today's presentation are available on Union Pacific's website. It is now my pleasure to introduce your host, Mr. Lance Fritz, Chairman, President, and CEO for Union Pacific. Thank you, Mr. Fritz. You may now begin. Thank you, Rob, and good morning, and welcome to Union Pacific's 1st quarter earnings conference call. With me today in Omaha are Kenny Rocker, Executive Vice President of Marketing and Sales, Eric Gehringer, Executive Vice President of Operations, and Jennifer Hamann, our Chief Financial Officer. Before we discuss our 1st quarter results, I wanna reflect on Russia's invasion of Ukraine. The people of Ukraine have had their lives turned upside down, and the UP family is holding them close in our thoughts and in our hearts. We've leveraged our resources to help with a $500,000 donation from our foundation and by matching 2 to 1 our employees' gifts to select charities that provide direct aid. I also wanna recognize the Union Pacific team for more than their generosity. They are a team dedicated to serving our customers. Recently, our service product has not met our customers' expectations. You will hear from Eric we have an action plan in place to recover, and it is starting to yield benefits. I'm confident in our long-term ability to grow while providing our customers a reliable service product. As they've proven time and again, no matter the challenge, our employees rise to the occasion. Turning to our 1st quarter results. This morning, Union Pacific is reporting 2022 1st quarter net income of $1.6 billion or $2.57 per share. This compares to 1st quarter 2021 results of $1.3 billion or $2 per share. Our 1st quarter operating ratio of 59.4% improved 70 basis points versus 2021. Business development and a robust demand environment drove 4% volume growth in the quarter, coupled with strong pricing gains and a positive business mix. However, our service challenges are contributing to higher costs in the quarter. That performance is also having a real impact on our customers and their ability to serve their markets. We must improve to realize the volume growth we expect this year and into the future. Let me turn it over to Kenny first for an update on the business environment. Thank you, Lance, and good morning. First quarter volume was up 4% compared to a year ago. Solid gains in both our bulk and industrial segments were more than offset by a decline in our premium business group from continued global supply chain disruptions. Freight revenue was up 17%, driven by higher fuel surcharges, strong pricing gains, and a positive mix. Let's take a closer look at each of these business groups. Starting with bulk, revenue for the quarter was up 21% compared to last year, driven by a 12% increase in volume and an 8% increase in average revenue per car, reflecting higher fuel surcharges and solid core pricing gains. Coal and renewable carloads grew 29% year-over-year, driven by continued favorable natural gas prices and two new contract wins that started on January first. Grain and Grain Products were up 1% in volume due to the increased biofuels production, partially offset by pure grain shipments from longer shuttle cycle times. Fertilizer carloads were up 2% year-over-year due to strong agricultural demand. Lastly, increased shipments of import beer and canned goods were the main driver of the 4% increase in Food and Refrigerated. Moving on to Industrial. Industrial revenue was up 16% for the quarter, driven by an 11% increase in volume. Average revenue per car also improved 5%, primarily driven by higher fuel surcharges and core pricing gains. Energy and Specialized shipments were down 6% compared to 2021, driven by fewer petroleum shipments. Volume for Forest Products grew 7% year-over-year, primarily driven by strength in both lumber shipments and paper. Despite rising interest rates, housing starts continue to be strong, coupled with demand of corrugated boxes and scrap paper. Industrial chemicals and plastic shipments were up 14% year-over-year due to the increased demand and a favorable comp from last year's Gulf storm that impacted production. Metals and minerals volumes continues to deliver robust year-over-year growth. Volume was up 25% compared to last year, primarily driven by growth in the construction materials, strong steel demand, and an increase in frac sand shipments. In addition, we had a favorable comp in our construction market from last year's storm that I mentioned earlier. Turning to premium, revenue for the quarter was up 14% on a 3% decrease in volume versus last year. Average revenue per car increased by 17% due to higher fuel surcharge revenue, core pricing gains, and a positive mix in traffic. Automotive volume was up 6%, driven by an increase in auto parts as demand recovers. Shipments for finished vehicles were down 3% as a result of ongoing semiconductor shortages. Intermodal volume was down 5%, driven by continued international supply chain disruptions. However, domestic volume was up in the quarter, aided by business development wins, tight truck capacity, and continued strength in parcel shipments. Now moving on to our outlook for the rest of 2022. At a macro level, we will be closely watching our markets to see how rising inflation and the global events in both China and Ukraine will impact our overall volume. As it stands now, here is how we view the outlook across our business lines. Starting with our bulk commodities, we expect fertilizer to grow due to solid market demand, especially on the export side. For coal, we anticipate continued favorable natural gas prices to extend through the year. When it comes to how much of that demand we can capture, that will depend on how quickly we recover our service levels. We are optimistic on growth with grain products from biofuel demand and business development wins. For grain, we have a tough comp to last year as exports were strong. Like coal, although we expect cycle times to improve, it is dependent on our service recovery. Moving on to industrial markets, we continue to be encouraged by the strength of the forecast for industrial production. This will positively impact many of our markets, like metals. Customer expansions and business development wins will drive growth in our industrial chemicals and plastics commodity groups. We do not expect to see petroleum shipments return to 2021 levels. Lastly, for premium, we expect domestic intermodal to continue its benefit from inventory restocking, retail sales strength, tight truck supply, and our business development wins. International intermodal is more uncertain with possible effects from ongoing supply chain challenges and pandemic shutdowns in China. For automotive, while we do expect the supply of semiconductor chips to improve throughout 2022, recent events in China and Ukraine may disrupt the supply chain for certain key components. We are keeping an eye on whether this will have an impact on production and stay in close contact with our customers. As I wrap up, I want to share a few insights on how the commercial team is navigating the current service challenges. First, all of our discussions have been centered around what actions we can take to improve service. Eric will provide insights on the levers we're pulling that are in our control. Likewise, the commercial team is asking our customers to help reduce railcar inventory. While those conversations have been difficult, I am encouraged by the high level of engagement and transparency we're having with our customers. With that, I'll turn it over to Eric to review our operational performance. Thanks, Kenny, and good morning. As I will discuss in greater detail in a few minutes, our service is not to a level that meets expectations, and we acknowledge the impact the deteriorated service levels are having on our customers. We are implementing plans to restore network fluidity and build a safer, more reliable and resilient network. Safety results have been mixed to start the year as we implement enhancements to our safety programs through partnerships and guidance from our external safety consultant. We remain focused on achieving world-class safety performance. We value the health and the safety of our employees above all and want all employees to return home safely each day. Now let's review our key performance metrics for the quarter, starting on slide 9. Freight car velocity and the related trip plan compliance measures were lower relative to 2021. Coming into the year, the network was in a more fluid state, seeing improvements in operating metrics and crew availability from reduced COVID infections. In late February, however, while the network was still fragile, episodic events challenged the team and our service product. This led to both decreased velocity and an increase in freight car inventory, particularly private cars, as resources were added to counteract sluggish service and meet growing customer demands. Turning now to slide 10. Although the overall network performance muted most of our efficiency metrics, we continue to operate a more efficient rail network compared to pre-PSR levels. Locomotive productivity declined 6% compared to 1st quarter 2021 due to locomotive utilization during the quarter. To assist in recovering the network, we also brought additional units online, further impacting our productivity results. First quarter workforce productivity improved 5% to a record 1,056 daily miles per FTE. We continue to hire for growth and normal attrition throughout the network. In 2021, we graduated over 250 new transportation employees with almost 400 employees graduated to date in 2022. We have a strong training pipeline of roughly 500 employees as we work closer towards our goal of onboarding around 1,400 employees this year. We have, however, been challenged across the northern region at several locations to meet our hiring targets, and we continue to work with our workforce resources partners to increase our hiring pools in those locations. Train length is essentially flat compared to 1 year ago. While continued soft international intermodal volumes present a headwind to train length initiatives, we continue to advance train length for coal and manifest trains, which both grew compared to 1st quarter 2021. These productivity efforts are key to enabling us to recover the network and deliver a better service product for our customers. Turning to slide 11 and a discussion on our path forward. This chart illustrates the current state of operations. Our operating car inventory levels rose over 20% since the beginning of the year, while our seven-day volume levels remained relatively flat week to week. We are at an inflection point, and more critical action is needed. Our terminals remain fluid, and our focus on improving over-the-road operations and reducing the number of active trains on the network will ease mainline congestion. To accomplish this, we are taking actions on all fronts by selectively increasing network resources, collaborating with our unions, adjusting transportation plans, and working proactively with customers to reduce the private car inventory buildup. The entire team is dedicated to returning the network to a more fluid operating state. Looking beyond some of today's issues, our goal is to build a more resilient and consistent network to meet the growth needs of our customers. With that, I will turn it over to Jennifer to review our financial performance. Thanks, Eric, and good morning. Let me start with a look at the 1st quarter operating ratio and earnings per share on slide 13. As you heard from Lance, Union Pacific is reporting 1st quarter earnings per share of $2.57, and a quarterly operating ratio of 59.4%, 70 basis points of improvement. Comparing year-over-year 1st quarter results, you'll recall that Winter Storm Uri significantly impacted 2021. In 2022, we have the positive effect to our operating ratio of 160 basis points and $0.16 to earnings per share. Rising fuel prices throughout the quarter, the lag on our fuel surcharge programs, and widening spreads between WTI and highway diesel fuel prices negatively impacted our quarterly ratio by 80 basis points while adding $0.12 per share. Core results were a 10 basis point drag to the operating ratio, but contributed 29 cents to EPS. These core results are indicative of both operational inefficiencies in the quarter, as well as the strong top-line growth we delivered. Looking now at our 1st quarter income statement on slide 14, operating revenue totaled $5.9 billion, up 17% versus 2021 on 4% year-over-year volume growth. Operating expense increased 16% to $3.5 billion. Excluding the impact of higher fuel prices, expenses were up 7% in the quarter. First quarter operating income was a record at $2.4 billion, a 19% increase versus last year. Adjusted for fuel price, 1st quarter incremental margins totaled 56%. Expectations for full year incrementals are unchanged in the mid-60s, which is the lower end of our Investor Day guidance. Interest expense increased 6% compared to 2021, reflecting increased debt levels, partially offset by a lower effective interest rate. Income tax increased 18% due to higher pre-tax income, partially offset by a lower effective tax rate. We now estimate the full year effective tax rate to be around 23.5%, as several states have lowered or are expected to lower rates. Net income of $1.6 billion increased 22% versus 2021, which when combined with share repurchases, resulted in earnings per share up 29% to $2.57. Looking more closely at 1st quarter revenue, slide 15 provides a breakdown of our freight revenue, which totaled $5.4 billion, up 17% versus 2021. Broad-based volume growth, supported by successful business development efforts, as Kenny discussed, contributed 425 basis points. Fuel surcharge revenue of $635 million increased freight revenue 800 basis points as the higher surcharge revenue reflects the significant surge in diesel fuel prices. The robust demand environment continues to support actions that yield price dollars that exceed inflation dollars. These gains, combined with a positive business mix, drove 475 basis points of freight revenue growth. Lower intermodal volume, combined with higher industrial shipments, drove the positive mix. Now let's move on to slide 16, which provides a summary of our 1st quarter operating expenses. As noted earlier, the primary driver of the increased expense was fuel, up 74% on a 59% increase in fuel prices and 9% higher gross ton miles. Our fuel consumption rate was relatively flat compared to 2021 as the favorable business mix was offset by negative productivity. Looking further at the expense lines, compensation and benefits expense was up 7% versus 2021. First quarter workforce levels increased 1% as a 2% increase in our train and engine crews were partially offset by flat management, engineering, and mechanical workforces. As you heard from Eric, we continue to hire into our transportation crafts to support network recovery efforts and prepare for future growth. Cost per employee increased 6% as a result of wage inflation, as well as higher recrew overtime and borrow out costs related to network inefficiencies, partially offset by last year's weather-related expenses. Given the current operational challenges, we now expect cost per employee to remain elevated into the 2nd quarter. Purchase services and material expense was up 14%, driven by inflation, higher volume-related purchase transportation expense associated with our Loup subsidiary, and cost to maintain a larger active locomotive fleet. Equipment and other rents was up 1%, driven by lower TTX equity income. Other expense increased 5% in the quarter, driven by higher state and local taxes and increased business travel. Turning to slide 17 and our cash flows, cash from operations in the 1st quarter increased to $2.2 billion from $2 billion in 2021, a 14% increase. Our cash conversion rate was 85%, and free cash flow of $657 million declined $146 million. This includes $312 million of increased cash capital spending and $93 million in higher dividends. The cash capital investment reflects both payments from elevated fourth quarter spending as well as a normalized start to our 2022 program. In the quarter, we returned $3.5 billion to shareholders through dividends and share repurchases. This includes the $2.2 billion accelerated share repurchase program executed in February. We finished the 1st quarter with an adjusted debt-to-EBITDA ratio of 2.8 times as we continue to maintain a strong investment-grade credit rating. Wrapping up on slide 18, I want to start by recognizing that several things have changed since we provided guidance in January, from fuel prices to our operational performance. As we sit here today, those pressures make achievement of around a 55.5% operating ratio unlikely. However, assuming some stabilization in fuel and recovery in our service products, we'll still look to achieve our long-term goal of an OR that starts with a 55 this year. Importantly, we are affirming our previously provided 2022 targets for volume, price, and incremental margins. Our cash and capital plans also are unchanged. Capital spending remains at $3.3 billion for the year, well within our long-term guidance of below 15% of revenue, and we remain committed to an industry-leading dividend payout ratio and share repurchases in line with 2021. Before I turn it back to Lance, I'd like to express my appreciation to the Union Pacific team. Working in an outdoor factory is always a challenge, but especially so during winter. Our employees, though, are undeterred in their desire to safely serve our customers while delivering another quarter of solid financial results. Thank you. With that, I'll turn it back to Lance. Thank you, Jennifer. As Eric mentioned, we've had an uneven start to the year with safety, but we're not deterred. We're in the process of implementing changes to our safety programs as a result of our work with experienced safety consultants. I'm confident these changes will be a catalyst for world-class safety performance. As you heard from Kenny, demand remains robust as our customers see growth opportunities in their businesses. However, we recognize that for growth to be sustainable, we need a reliable and resilient service product that our customers can depend on. Our strategy begins with Serve, and it is the foundation for achieving long-term success for all stakeholders. Improving our service product has our full and undivided attention. Current challenges aside, we remain enthusiastic about the opportunities that exist this year to win with all of our stakeholders, and I am confident that 2022 will be a very successful year. Wrapping up, with tomorrow being Earth Day, it feels appropriate to highlight an action we took during the 1st quarter to protect our planet and advance our journey to net zero emissions by 2050. In January, we announced plans to purchase 20 battery electric locomotives for use in yard operations, creating the world's largest carrier-owned battery fleet in freight service. These locomotives do not use diesel fuel and emit zero emissions. We anticipate the first units will arrive on site in late 2023, with complete delivery by 2024. With this step, Union Pacific remains a leader on our nation's path to a sustainable future. With that, let's open up the line for your questions. Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants who are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Due to the number of analysts joining us on the call today, we will be limiting everyone to one question to accommodate as many participants as possible. Thank you. Our first question today will be coming from the line of Ken Hoexter with Bank of America. Please proceed with your question. Great. Good morning. Just to kind of follow up on your outlook, obviously, it has a lot to do with enhancing hiring to improve the service. Maybe you can talk a little bit about how do you scale that up, Lance, what programs you can do to kind of meet some of these targets. I guess, Kenny, the breadth of the latter and constraints on the companies limiting their assets, you know, maybe talk about what, you know, how that frees up the fluidity of the network as well. Thanks. Yeah, thanks for the questions, Ken. I'll start. In terms of hiring, our hiring pipeline right now is pretty much fully charged at 500. We'll be graduating something over 100 each month. That'll help us get healthy. It's not like we need all 1400 right now, but I would love to be able to add another couple of 100 into the network where we need them right now. That would really help us move our inventory through the pipeline, get it pushed up against our customers where they would like it. We're in the middle of doing that. When Eric Gehringer mentioned some difficult areas, particularly in the northern tier, call it from west of Chicago all the way through Wyoming and into the Pacific Northwest, we're trying a couple of unique things there. One of the things that's showing really great promise is something called second chance hiring. It's where we take cadres of individuals who have made bad life decisions, but are really no longer a threat to society or themselves. We work with a partner in the community to vet them and then take the best from that group and bring them on board. We've already gone through our first hiring class, who are in the middle of training down in Houston, and we've expanded that second chance hiring program now to Chicago, L.A., North Platte. It looks like it has great promise in those communities as well. There's a number of things we're doing both to make our jobs more attractive, to find bigger pools of talent, and to develop talent so that it's ready to be in the railroad. At the same time, we've reduced our training program, from a timeframe perspective, not a content perspective, down to about 14 weeks, maybe 17 if we have a little bit more training to do in particular areas. We're doing everything we can to get the pipeline charged and get them out. Kenny? Yeah. Hey, Ken. You know, we sent out a letter to all of our customers, and that gave us commercially an opportunity to have a conversation with all of our customers and make them aware of what we're trying to accomplish. I want to thank our commercial team and thank the customers for having those engaging conversations. We worked with Eric's team to ensure we had really good data-driven conversations with the customers that could give us the best opportunity to reduce the rail car inventory. We've done that. Trust me, there have been some difficult conversations, but I'll tell you, I've been very encouraged with the initial response from our customers and their willingness to reduce their rail car inventory. We'll continue to have those discussions. We'll continue to engage them and be transparent and utilize data. Thanks, Kenny. Thanks, Lance. Yep. Our next question comes from the line of Jon Chappell with Evercore. Please just give us your question. Thank you. Good morning, everyone. Eric, we've kind of been hit over the head with labor. It's the biggest issue. When we look at, you know, the amount of people you're looking to add, relative to the size of your workforce, it's really not that large. What are some of the other capacity constraints that are on the network right now? It feels like you exited 1Q maybe in a bit of a worse situation than you entered 1Q. How quickly can you remedy those non-labor issues to kinda help complement the additional headcount and get you out of this situation a lot quicker? Yeah, Jon, thank you for the question. To your point, right now we have 1,400 people planned for hiring this year. We're on pace to do that. We feel like based on how we forecast not only the volume we have now, but also the growth, that that's exactly how many we need to hire. Now when you think about recovering the system, I mean, that's bullet number one. You've got to charge the pipeline, and as Lance said, we've done that. I go then beyond that, and I focus on the crews that we have today, and are we being judicious with the use of those crews? You heard Jennifer state we have opportunities in things like recrew and overtime. Those are at the forefront of our efforts right now. Third, I go down to locomotives. As you look at the locomotive fleet on the Union Pacific right now, we have the appropriate amount of locomotives on the system. We have opportunities to use them more productively, but they're the right number of locomotives. I go down to the transportation plan changes that we've made. Those changes have been very specific and targeted towards eliminating the excess inventory off of the system. Finally, we close out with where Kenny started, working with our customers in partnership with them to reduce private car inventory. The faster we do all five of those, John, some of which are already been done, the faster we recover the system, and that's what everyone is focused on right now. Okay. Thank you, Eric. Our next question comes from the line of Brandon Oglenski with Barclays. Please just give us your question. Hey, good morning, everyone, and thanks for taking the question. Lance or Eric, I guess, can you talk to the fluidity situation in, you know, L.A. Long Beach, and has that improved in any drastic way? Let me get started, and then I'll ask Eric to add a little detail. We are encouraging our international ocean shipping partners to put more of their international boxes on our railroad to ship inland. As Kenny mentioned, that ratio is still lower than it's been historically, and they're all working towards adding more of that back into our network. We stand ready. The boxes that are pointed at us on dock are not dwelling, you know, an excessive amount of time. We'd love to have more of those come onto the railroad. Brandon, when we look at that at a specific terminal perspective, Lance is exactly right. We not only have dwell right where we need it to be, it's a solid performance, especially relative to last year, but we also have excess capacity in those terminals. As we continue to get more volume, we can handle that. Now, we still wanna be ready for that, so we have continued to put excess resources in an at-the-ready status. They're not active, but they're available in the L.A. basin, so as those surges comes, we can handle them efficiently. Thank you. Yep. Thank you, Brandon. Our next question comes from the line of Tom Wadewitz with UBS. Please just give us your question. Yeah, good morning. You know, I guess I wanna try to understand a little bit what, you know, what happened. It seemed like, you know, Lance, you'd even going back to the May analyst meeting last year, you talked about growth and you really, you know, I think executed well against that strategy. But it seems like, you know, now you're almost, I don't wanna say you're surprised by the growth, but, you know, there obviously have been difficulty handling it. So is there like a surprise in the attrition side? You know, I know railroading's an outdoor sport, so sometimes you get a setback and it takes a while to recover. Also I feel like your commentary on labor not that long ago was that you had enough labor. So I guess I just wanna I guess try to see what might have happened and then, you know, how much of that is ongoing in particular with attrition. Is that, you know, is that the issue? Is that ongoing? Thank you. Yeah, that's a great question, Tom, and let me unpack that for you. Let's say, starting in the back half of last year coming into this year. You know, we talked about in the back half of last year really struggling with crew availability, which was mostly we thought COVID related. We just had not really done a great job in anticipating what COVID would do to crew availability, and we kept kind of struggling with having 300, 400, 500, 800 T&E unavailable to us at any given time. But we thought that our hiring pipeline had been charged up to a point where as we were entering 2022, we'd be able to handle the volumes. That looked like that was proving out to be the case. When we spoke to you all in January, our operating metrics were improving, we were coming out of the holiday, and we actually felt pretty good about where we were. Now, we knew we were fragile, but we thought we could navigate as we brought crews on board. What happened is we were more fragile, I think, than we gave ourselves credit for. In the back half of February, we started getting some body blows from what normally happens in winter. Usually, we have enough excess resources to be able to bring them to bear and clean out of it. This time around, we didn't. As a result, we started getting behind. Inventory built up, and it's for the exact reasons that make all the sense in the world. As customers see us slow down, they put in more freight car inventory so that they get their needs satisfied. That then turns into a kind of a self-reinforcing negative cycle. That's where we are right now. Right now we're in a place where we've got more train and car inventory on us than we should have given the volumes, and we've got to work that off. What Eric was talking about is making sure that we use our crews wisely, our power wisely, and our T-Plan is oriented towards doing that. That's exactly where we are. It's gonna take us a while to work out of it. We're gonna work out of it through the 2nd quarter and into the 3rd quarter. My anticipation is we see incremental improvement week after week after week as we're doing that. Eric, is there anything you want to add to that? I think you've covered it exactly right. Where we'd be most focused on those leading indicators of terminal dwell, car velocity, train velocity, and operating inventory. That's what we report publicly so that everybody can continue to see that progress that we'll be making week after week. Is there a timeframe for when it will be kind of fixed in your view? I guess that's 3rd quarter you're saying. No, we haven't guided to a specific timeline. I would reinforce the fact that as we see the hiring pipeline, we're getting about 100 crews every single month. Those 100 crews are incredibly important to the recovery, but so are the other four things that I listed. What you should know is right now, everyone is focused on that, and they're focused on how do we do that as quickly as possible. Yeah, Tom, I would point you back to the KPIs that Eric mentioned. You'll see the recovery happen. You'll see it in car velocity that we publish every week, you'll see it in terminal dwell that we publish every week, and you'll see it in overall inventory. Okay. Thanks for the time. Yep. Thank you, Tom. Our next question is from the line of Justin Long with Stephens. Please proceed with your question. Thanks, good morning. I wanted to ask about the OR guidance. Obviously, there's a lot going on in the network operationally, but if I go back to prior pandemic levels, seasonally, you saw about 200 basis points of OR improvement sequentially in the 2nd quarter. When we think about your full year guidance, would it be fair to say that it assumes a similar level of seasonality in the 2nd quarter with the progression to the mid-fifties in the back half of the year? Just curious if you can help us think through that quarterly OR cadence assumed in the guidance. Yeah. Excuse me. Thanks, Justin, for that question. I believe you are thinking about it correctly. It really is going to be, we've got to make improvements sequentially in the 2nd quarter and then really leverage that back half as we see stronger volume growth and have greater operational fluidity to be able to hit those targets. Obviously, fuel, you know, we're assuming some moderation there, but that's really the operational performance and the leverage to that volume growth that we know is there, the robust demand that Kenny talked about. I think that's very important. Now, I also have to acknowledge that 2nd quarter of last year was our best quarter ever as a company, and so that's gonna be a very tough comparison for us. In fact, you know, I would be remiss to say that we think we're going to see improvement in the 2nd quarter, but sequentially, on a year-over-year basis. Sequentially, we should improve, and that will lead to greater improvement in the back half. support the guidance that you gave overall, which is a 5.5x- Yes. for the year. Yep. Volumes for the 2nd quarter, do you think they'll be up on a year-over-year basis? You know, that's really gonna depend on the pace of the recovery. But I do think, you know, when we talked about volumes for the year, again, thought first half was gonna be driven by the bulk and industrial, and the second half was gonna be driven by more of that intermodal recovery and automotive recovery. While I think that's still largely the case, and you heard Kenny talk about the fact that there are some, I'll say a little bit of headwinds or potential headwinds in terms of the international intermodal and the automotive recovery with what's happened in Ukraine and China. But you also have stronger natural gas prices into the back half of the year, so that's gonna, you know, support that coal growth. I still think you have that dynamic of a stronger 2nd half overall in volume than you do in the first half. In terms of Q2, you know, we just need to really get the network fluid and try to move as much demand as is there. Got it. Thanks for the time. You bet. Thank you. Our next question is from the line of Scott Group with Wolfe Research. Please proceed with your question. Hey, thanks. Good morning. Jennifer, pricing and mix decelerated a decent amount from Q4. Any thoughts, is that price or is that mix? And any thoughts on how to forecast that? And then just on the operating ratio, I know you're raising it, worsening it, whatever, by 40 basis points, but I gotta think that fuel's more than a 40 basis point headwind to what you thought at the beginning of the year. So is it. I know we've got service issues, we're talking about, but it almost feels like underlying guidance on margin ex-fuel or underlying earnings guidance is actually gonna be better than what you thought previously. Am I thinking about that right? Yeah. Let me hit your first question there, Scott, in terms of sequentially. The pricing environment continues to be very robust. There's really, you know, that demand environment is there. You do have sequentially, the mix is negative going from fourth quarter to 1st quarter. That's really mix within mix. Yes, bulk and industrial are up. Intermodal or the premium piece is still down. When you look at where the growth was on the bulk side, you know, it really was coal, very strong coal growth. When you look at the ARCs relative to the other components of bulk, coal has the lowest ARC, so you've got that mix-within-mix impact. You have a similar story within the industrial side when you look at where the growth was on industrial. Strong, you know, across the board, with the exception of petroleum, but some of the strongest growth in metal, and that also has your lowest average revenue per car within that group. That is the story in terms of the yield sequentially. When you look to the OR, you know, fuel is certainly a headwind, but we see that headwind lessening through the year from an OR impact. You know, we are looking at both the fuel and the operational performance, but the volume leverage, and that's the piece that I think maybe I need to stress the most with you all, and that's the piece that's within our control and the piece that we're working very diligently on. When we see stronger volumes coming in the second half, being able to leverage those very well, with perhaps a little bit better mix, if you continue to have that industrial growth coming in a little bit stronger, I think that's how you get to the revised OR guidance. Okay. Just so I understand that point about fuel, are you assuming the fuel price comes down or just that you catch up on the surcharge and so that the OR impact is just naturally less as the year goes on? It's the latter that you say there. It's really a stabilization in the fuel price, and so we're catching up. Fuel was going up a little bit in the second half of last year, so it's taking those two things together, Scott. Thank you, guys. Appreciate it. You bet. Thank you. Our next question is from the line of Jordan Alliger with Goldman Sachs. Please proceed with your question. Yeah. Hi. Just sort of big picture question. Obviously, you and others put PSR and PSR methodology into play, and I know things are a bit unprecedented, but do long-term broader adjustments to how you think about Precision Scheduled Railroading need to take place? And is the resiliency after going through all that a surprise or negative to you overall? Thanks. Yes. Jordan, thanks for asking that question. Unequivocally, PSR has been a benefit to the railroad, even in our current environment. Let's go back to what it means. It means we try to touch cars the fewest amount of times necessary to satisfy demand for our customers and the customer need, so we don't do waste work. That by itself allows us to have excess capacity in both the terminals and in our line of road that we can use for other purposes. We also try to deconstruct our specialized networks where that makes sense so that we can have shared trains that are advancing cars more rapidly than they would otherwise. Unequivocally, when you look even at the way we're operating right now, when we have gotten into trouble prior to PSR, our operation would be worse, demonstrably worse. We've proven through the last three years that when we get into trouble in the PSR environment, we can get out of trouble more readily. Now, what's happening right now is I'll blame it on us. Shame on us. We got to a place where we did not have the crew availability for when something went wrong to be able to over-resource for a short period of time and get it out of the network. You know, it's not a lesson, it's a tough situation to be in because we've already learned that lesson. As we look forward, what we have to do is make sure that our business planning processes for resources are rock solid, and that we do a better job of making sure that our network and our resources and our plan is tightly coordinated with customers and their need and get them matched up over a timeframe that is the same as how we can add resources for growth. Yeah, unequivocally PSR is remaining the way to go. It is helping us manage the business right now, and that's not why we got into trouble. Thank you. Yep. Our next question comes from the line of Amit Mehrotra with Deutsche Bank. Please proceed with your question. Thanks. Hi, everybody. Jennifer, that 65% incremental margin target for this year, is that ex fuel or headlines? Because I'm trying to understand if it's comparable to the 56 you did in the quarter or the 45 you did including kind of on a headline basis. No. That's a good clarifying question, Amit. When we talk to the incrementals, we're always talking about it in terms of normalizing for that fuel price. That's comparable to the 56 that we reported here in the 1st quarter. Okay. Yeah, that's what I thought. The implication is, I mean, it's gonna depend on what revenue growth is, but the implication is that you guys are gonna do a 53%-55% OR cumulatively over 2Q, 3Q, and 4Q, which is a big step up in the context of kind of these ongoing service issues. One thing I wanted to clarify is the fuel surcharge. Obviously, it was up 20% sequentially, but I assume you're gonna take a very big step up in the 2nd quarter, some of the March increase, and then maybe even subsequently 3rd quarter. I'm just trying to figure out the confidence around the next 3 quarters and how much of that bridge, so to speak, of that step function improvement is actually just fuel surcharge revenue that comes on disproportionately the increase in fuel costs. Yeah. I mean, we do still see the price of fuel being a headwind in terms of our OR. As I talked to Scott, we see that lessening through the course of the year, but we don't see that OR impact flipping and being a tailwind to our OR. You know, your math that you said in terms of the last, you know, 3 quarters of the year in terms of OR, I don't know that I would necessarily agree with that. That seems fairly aggressive. It is about seeing a stability in the fuel prices, which does allow the fuel surcharge obviously to catch up a bit. Well, Jennifer, we also just need to circle back. There's one other predicate on that, and that is we are improving the service product through the quarter and through the back half of the year. Oh, absolutely. That goes back to the commentary about volume leverage. Yep. Right. One—if I could just sneak in one last one for Lance, which I think is an important question. Obviously, BNSF is making a bigger push into intermodal with its joint venture with Hunt, and Hunt's obviously the largest IMC out there with a big asset base behind them. You guys have won a lot of intermodal business recently. Does that change your strategy in terms of what you need to do? Do you need to invest in the intermodal service to compete with, you know, this, your direct competitor that seems to be going all in on really putting a decent amount of investments at play to win more business in intermodal? Yeah, Amit, I don't think it changes fundamentally our strategy in the domestic intermodal world. The BNSF and J.B. Hunt have always been formidable competitors. What we've done, by adding Knight-Swift and Schneider, along with having XPO and our long-term partner, Hub, working with us, is we've got channel partners that can grow very effectively, against that. When you combine that with our EMP and UMAX program for some of the smaller and mid-sized IMCs, we are fielding a really talented, very compelling story for BCOs to use us. It is no surprise that our primary competitor in BNSF and their primary partner in Hunt are doubling down on how they approach the market. Candidly, that kind of competition between us, our channel partners, and them and their channel partners is fantastic for the users, for the customers of domestic intermodal. Thank you very much. Appreciate it. Our next question is from the line of Chris Wetherbee with Citigroup. Please proceed with your question. Hey, thanks. Good morning. Maybe a question for Kenny or Lance. I want you to think about sort of the overall demand environment. Clearly, I think there's business that's available now that you're not capable of moving from a service perspective. So maybe a little bit of perspective on the amount of business that you may be turning away or sort of metering as it stands right now. Then thinking a bit bigger picture, what do we think the outlook is, really for the rest of the year? I guess there's a question of, you know, overall consumer activity and the pace of demand as the rest of the year plays out. So I want to get a sense of what you're hearing from the customers in terms of expansion or contraction plans as they think about the rest of the year. Obviously, we're hopeful that as service comes back, there will remain demand being relatively strong, but want to get a sense of what you're hearing on the ground. Yeah. Kenny, you wanna handle that? Yeah. Thanks, Chris. You know, you set aside some of the macro things that we're dialed in on. We're keeping an eye on the inflation rates that are out there. Obviously, there have been some stop and start with COVID disruptions in China. When I look across each of our business teams, it's a very optimistic story. You look at our coal business, we talked about the two wins. None of us would have predicted that natural gas prices are as high as they are and are gonna sustain where they are. Our grain business has been very strong. Last year was very strong. I tell you the upside there is on the biofuels market and the grain products area, which is great. Then, you know, as we look throughout the rest of the year, we expect that export fertilizer demand will stay there. On the industrial side, really same story. I mean, we've got some business development wins, but we've also just got some, you know, structural things that are helping us out. Metals has been very strong. There have been some expansions on the plastic side. Those markets are still recovering and have been very strong. We'll keep an eye on housing starts. The inventories are still low. There's still a backlog of houses that need to be built. Our lumber and our paper business has been strong. Then on the premium side, you know, our auto parts and finished vehicles business still is not where it should be. It's improving. We talked to some customers. Car dealership inventories are around, you know, 24-25 days. We see that improving as we move throughout the year. On our international intermodal side, the amount that's going IPI has improved in the 1st quarter. We had some customers in here recently. We're expecting them to turn on more of that volume. The things that we can control, we feel really good about. Domestic intermodal has been up, as I mentioned in my commentary. From what we can control, we feel good about. We just gotta keep an eye on some of these other things that are out of our control. Kenny, I wanna brag on your team for a moment. You're doing really tremendous work on business development, on pure business development, the singles and doubles where we bring on a customer, we grow with an existing customer through service enhancement and enhancing the overall customer experience. Even in the context of the service issues that we're facing right now from a service product perspective, behind the scenes, the overall customer experience, we continue to invest in that and continue to make progress. Yep. They're out there hustling and engaging the customer. Yep. Thanks, sir. Appreciate it. Our next question is from the line of Ravi Shanker with Morgan Stanley. Please proceed with your question. Thanks. Morning, everyone. I did want to follow up on the domestic intermodal expectations into the back half because kind of based on what you said about the competition with the BN, as well as expectations for the truck market to loosen in the back half of the year, I'm kind of struggling a little bit to figure out kind of what the tailwind is on the domestic intermodal side that will get that to accelerate in the back half of the year. You know, are there new contracts coming on? Kind of, you know, what gets that to go off? That's question number one. Question number two is, if you can give us a little bit of a sneak peek into the STB hearing in a few days, kind of obviously, you guys have spoken a lot about service challenges and everything you're doing right now. But what do you think is gonna be the outcome of that hearing? Thank you. Kenny, why don't you handle the back half domestic intermodal question, and I'll get to the STB after you're done. Yeah. Thanks, Ravi. A couple of questions there, and it sounds like demand and also the pricing environment. We're about 40%, almost close to halfway through our bid sessions on the domestic side, and it's been favorable versus last year. Last year was also a pretty strong, solid year. Now, the spot rates have gone down here recently, so we've got to keep an eye on that. I'll tell you, the overall demand has not changed, and we're gonna continue to look at that over the next few weeks as we're in those competitive bids. Again, we brought on the Knight-Swift business, but we do have more volume that's coming on as we look at the back half of the year. The other thing is that we just need the supply chain to work itself out. Chassis dwell is still not really where it should be. Dwell of containers is not really where it should be, so we'll see some improvement there. You made some comments about our primary competitor in the West, and I wanna echo what Lance said. You know, the pie is much larger than the primary competitors in the West. We've had so much investment as you look at, you know, the ramps in Inland Empire, Twin Cities, everything we're doing with GPS. We wanna compete with trucks, and that's what we're focused on. Yeah. As we improve the service product, Kenny, get that reliable, we're in great position to take more trucks off the highway. It just makes all the sense in the world, including an ESG perspective. Ravi, your question on the STB hearing, clearly, the entire rail industry is in a place where we're as a collective, not providing the kind of service that our customers demand. The STB appropriately is hearing from customers and want to talk about it. That's what next week is all about. We're well prepared for those conversations and to share with the STB how we're investing and planning to continue to improve and recover and then be stable going forward and reliable and consistent. I think that's gonna be a great opportunity to have that discussion. We're gonna encourage the STB not to make rash or knee-jerk decisions in this environment. There are some things on their docket that I would guess, I would imagine somebody will advocate as solutions. From our perspective, this is all about getting our labor right, getting utilization right, making sure the other resources are ready, and then executing. It's not much more complex than that right now. Sounds good. Thank you both. Yep, thank you. Our next question is from the line of Walter Spracklin with RBC. Please proceed with your question. Thanks very much. Good morning, everyone. Lance, you mentioned over-resourcing or the ability to over-resource. I guess my question is really if that is limited only to your ability to ramp up labor, or are you looking at ways, and do you feel like you need to look at ways to expand your capacity from a more infrastructure standpoint, be it on track and locomotives and so on. It just goes back to the STB, you know, some of the discussions Chairman Oberman is having about, you know, the lack of railroad ability to invest or the historical decision not to invest that is leading to the lack of available capacity. I wonder how you would respond to that, and particularly if it's just a labor problem or if you need some more capacity and investment in your network as well. Yeah, Walter, we take a great exception to anyone that points at our historic track record and says we're under-investing in our railroad, right? When you spend $3 billion-$4 billion a year, that's not under-investing. Look at the statistics, look at the facts. You go back 4 or 5 years, we would have 800 or 900 trains on our network at any given time. Today, we're overloaded by plan at 700. That number should really be 600. Our network has had incremental investment put into it. That's what I mean by making sure we have excess resources. We've done that through the implementation of PSR in terms of we have excess terminal capacity that we can use by having mothballed certain terminals that we no longer needed in the T plan. We've got plenty of line of road capacity that we can use, and we continue to invest there so that we can continue to grow out efficiency, safety, productivity and growth in targeted areas. When I'm talking like that, I'm really talking about the more fungible resources like crews and locomotives. Locomotives were in great shape, right? We have a strategy where we have at-the-ready locomotives positioned around the network so that we can fire them up when they're needed and then put them back once we've gotten out of the situation. It's really to your point, Walter, it's really back down to crews. Historically, we've had AWTS boards, alternative work and training service boards, where we would be able to have people not go into furlough, but go into kind of a quasi status where they're still getting paid, they're still getting resources from us, their benefits package in its entirety. That allows us to call them back more quickly, if something happens in a demand profile that we didn't expect. We need to get back to a place where we've got those kinds of resources available to us, and we're looking at all of those. Job one that we talked about first and foremost is making sure we get crew utilization and crew availability and total crewing right so that we can handle the volume we've got in front of us and the growth that's coming. I think that's a great answer. Do you think that's resonating with the STB? Or you know, what is your sense that that answer will you know, kind of give you some at least some time to kind of prove it out over the coming quarters and years? Or do you see risk that they may take action to force you to invest in capacity above and beyond all the capacity investments you just mentioned? Walter, I'm an optimist, and I'm hopeful that the facts, which support what I just talked about, speak to the STB and we're effective at communicating that. Thank you very much for the time. Appreciate it. Yep. Thank you. Next question is from the line of David Vernon with Bernstein. Please just use your question. Sorry. Was I muted? Two questions for you on the domestic intermodal side again. Eric, as you're resourcing the network right now, obviously, you know, Kenny's team's done a good job bringing over some fairly big accounts in 2023. Will you have enough capacity by the end of the year to accommodate that, or will there still be incremental growth required in resourcing into 2023 to accommodate those intermodal share wins? Yes. Thank you for that question, David. We will have the capacity to be able to host that additional volume. You know, as we've been working through the onboarding process, that's part of that process, is to ensure that we're making the necessary investments. It's not always capital investments. Oftentimes, it's just process improvements. For example, considering the fact of, Knight-Swift and Schneider now having their own chassis, and how do we think about that and optimize our terminals to account for that? You know, when I'm out on the railroad, I see the output of those efforts. When I see us getting near completion on our G4 gantry cranes, when I see us buying additional lift equipment, the work that we're doing on the Inland Empire and the Twin Cities Intermodal Terminal, those are all in response, not just to Knight-Swift and Schneider, but to the entire volume and growth that we see coming and being ready for all of our customers to benefit from that. All right. Thanks for that. Maybe just as a quick follow-up, you know, when we think about the 20, 30, 40% growth in the domestic container fleet we're gonna be seeing over the next couple of years, it sounds like a lot of private equipment is being added. What do you guys think that your intermodal franchise is gonna look like from an equipment perspective, 3, 4, 5 years down the road? Are you also gonna be resourcing containers into the UMAX and the EMP programs, or are you gonna be allowing your channel partners to make those investments in trailing capacity? Thanks. Kenny, you wanna handle that? Yeah, I mean, we feel really good about our strategy to go in and invest in our equipment that we have out there with EMP and UMAX. I talked about the GPS earlier. You've heard me talk about the chassis investment. We see that we can win across the board. We can win with the private asset side and with the IMC community, and we wanna grow that pie. That's how we're thinking about it. As other private asset carriers are out there, we'll engage them on their strategies, but clearly, we don't wanna put any limits on anything that would inhibit growth. I would guess, Kenny, given the growth that we're seeing first through Knight-Swift, then with Schneider and the continued growth of Hub, it's probably fair to say the ratio of privates versus EMP UMAX on us grows towards the private side. That's fair. Yep. All right. Thank you, guys. Yep. Our next question is from the line of Brian Ossenbeck with J.P. Morgan. Please proceed with your question. Hey, good morning. Thanks for taking the question. Clearly, a lot depends on service improvement here in the next couple of quarters. Just wanted to get your sense, Lance or Eric, about just the risk to the plan. You know, what are you really focused on? What are you really worried about? Lance, you did mention a few things on how to get this more sustainable in the future. You know, there'll always be labor and volume variability, but is there something else you feel like that UP or maybe the industry overall needs to get better at in terms of being able to manage these ebbs and flows a bit better and then being able to grow from there? Well, why don't I start with the back half of that question, Brian, and then I'll turn it over to Eric on the front half in terms of, you know, some of the bumps in the night that you're planning for, that you're mitigating. In terms of how to be more resilient and robust, there's a lot to that question. Some of it is our direct control, some of it has to be in partnership with our customers. What's in our direct control? We have to make sure that our jobs are more flexible and more attractive and easier to hire into. One thing that we're in the middle of right now as an industry is trying to get to a place where two people in the cab of the locomotive are not mandated and negotiate with our union partners on moving one of those people onto the ground. That doesn't sound like much, but that one person on the ground can turn into a shift job and stay at home as they're doing their work. That's a huge lifestyle benefit to that person as opposed to going over the road, staying away from home, and then coming back and being called at potentially all hours of the day. That's not obvious how that connects back into being more reliable, more resilient, more consistent, but there's an obvious connection from our perspective. There's other things like that that are smaller that we need to do. I talked about AWTS and getting back to a place where we have not excess manpower sitting around, but our labor force, our craft professionals are more flexible to go where the work is and do the work when it's needed and still have an enhancement in their work-life balance. There's a lot of work that we have to do with our unions on property and negotiation and national in negotiation, and then just in how we design our boards and our T-plan and our work overall. Eric, you wanna handle that first part? Yep. Brian, as you think about the recovery and what are we doing to de-risk, that, you know, I first start off with just the basic fundamentals of, you know, we are coming out of winter. We're coming out of a period of time where we have seen higher variability. As we come into spring, it's a period of time in which we have been more consistent, especially with the impact of weather. Second, and we've mentioned it a couple of times, but it's really the most important thing as we sit here right now. If you look at previous times of service challenges, it's been in our terminals. We've been able to get the volume to the terminals, but then the volume in the terminal starts to slow the terminal. That's not the case right now. The case right now is that we have fluid terminals, both our large terminals, our serving yards, and our locals getting to customers. That must stay that way. The way we think about bringing trains into the terminals and landing them on time, but also properly spaced so we can handle it so we don't get a backlog. That's de-risking it. You know, if we look at another way, as we talked about crews, you know, we're in the crew preserving mode right now. We wanna make sure that every crew we call counts. One of the ways we do that is with train length. If you go back all the way to January, we were sitting around 9,000 ft on a system average. We added 200 ft to that in January, another 200 ft in February and March, and another 150 ft year to date. That's de-risking the recovery. That's ensuring that we're taking every opportunity we can to minimize the number of trains out on line of roads. It's all activities like that, and that's what the entire team is focused on. All right. Thank you, Eric. That's very helpful. Lance, if you can just give us some quick thoughts on the CPKC merger. I think the responses back from CP are due tomorrow, so, any updates on the concerns that UP has voiced, and that would be helpful. Thank you. Yep. Brian, I would just reiterate what our concerns are. It really boils down to three things that we think we need remedies for. The first is for our customers to continue to enjoy the kind of access they have to and from Mexico, we need certainty on price that's competitive from the border into Mexico. We think about that like prop rates. Second, we need to maintain what we have today with the KCS, and that is fair treatment, equal treatment at the border crossings on the bridge. Third, the KCS and CP have talked about a significant spike in converting truck to train and moving it on our trackage rights through Houston. Houston is a congested area. It's not congested in a bad way. It's a high volume area that requires a lot of attention. If you introduce another 8 or 10 trains a day into that network in a rapid period without having the capital in place first. It'll tilt Houston, and we can't accept that. We wanna make sure that if they're going to execute that plan and it's going to increase the amount of train traffic through Houston, the capital is spent in advance so it doesn't crater Houston as a result. Thank you, Lance. I appreciate it. Yep, thank you. Our next question is from the line of Allison Poliniak with Wells Fargo. Please proceed with your question. Hi, good morning. You'd mentioned a number of notable steps, obviously, towards your sustainability target. As you're having conversations with new business development, I guess one, is that being recognized? Then, you know, as a part of that, is that becoming increasingly important in their decision to execute with UP and towards an agreement? Just any thoughts there? Yeah, thank you, Allison. Kenny, you wanna take that? Yeah, we have a number of customers that have always wanted to know where we are on ESG and sustainability components, and we are seeing in the RFPs, in the formal RFPs, more focus there. Those customers are typically in the Petrochem area or customers that are, I'll call them consumer-facing type customers. We do know that it's in their methodology. I'll tell you the other thing is that our commercial team is sitting down with our customers and walking through the value that we provide by them moving Union Pacific and actually selling that. Yeah, it's more awareness on the customer part and more proactive engagement from our commercial team to sell that as part of our value proposition. Great. Thank you. Our next question is from the line of Jason Seidl with Cowen. Please proceed with your question. Hey, thank you, operator. Lance and team, good morning. Wanted to go back a little bit to the intermodal side. You know, as you think about your base case scenario on the international side, what's in it in terms of potential, you know, clogging up of the supply chain again? We've talked to a bunch of people, and there seems to be some worry here that we've had a bunch of black swan events over the last couple years. Now we got another one with, you know, China ports just withholding all these shipments coming in. You know, if they all come back to the ports at once, I don't think a lot of people have confidence that they're gonna be able to handle it. What's UP set up like into the summer, and how do you think you're gonna handle that? Let me start and then I wanna turn it over to Eric and Kenny to kind of add a bit more detail. I wanna, Jason, focus in on the partner side with railroad what we need to depend on so that the network doesn't get overwhelmed. I'm in part in agreement with you that we are not yet in a place where labor in distribution centers and warehouses and dray truck companies is at a place where it could take an onslaught of significant volume in the international intermodal space so that we still need more hiring and more labor available in local truck companies and dray companies and in distribution centers. Kenny and Eric, what about us? Yeah, I mean, I think you hit it on the head, I'd say, and I'm looking at Eric as I say this. We feel good about the condition of our intermodal network as it stands today. We've been working very closely with the customers to make sure that we have a really clear forecast of what's coming towards us. We've inserted technology where we can to do that. Yes, these stop and starts out of China. We've gotta keep an eye on it because there's gonna be another slug of containers that are coming towards us. One of our biggest opportunities that we've been leveraging really for now almost a full year is we are active members on the White House working committee that allows us to interact with all the different stakeholders on the West Coast ports. What it's providing us is even better transparency into different events that are happening upstream, that it comes down to us, it allows us to understand weeks, sometimes months out, on how do we have to think about resourcing for that. We'll continue to be active in that, 'cause it continues to help the entire industry out on the West Coast. Yep. If I had to sum that up, an onslaught of freight would still be difficult to handle, but now you guys have better visibility than you did, let's say, a year ago throughout the system. That's fair. Yeah, absolutely fair. Okay. I wanna follow up real quick, Lance. Getting back to the STB for a second. You know, there was obviously hearings out there on reciprocal switching. You know, I'm not gonna make any prognostications on where that's gonna go, but just wanted to. In terms of your exposure, in terms of your total business, what% of your business would be exposed to reciprocal switching if it would come to the U.S.? You know, that's hard to nail down and give you a number right now. All I would say is, we are concerned and deeply engaged with the STB to help them understand what reciprocal switching, we'll call it forced open access, could do and what it couldn't do. It is not a wholesale remedy to, for instance, remedy fix current supply chain problems, right? What forced open access would do is it would put switching in places where it isn't right now. It would increase dwell time on freight cars, and those are two things that we absolutely don't need. Now, that's not to say that there can be a circumstance where it might make sense for somebody, and it already does exist in very limited areas, where we've agreed with other railroads that a reciprocal switch is needed or where the STB has mandated it through conditions on previous transactions. We continue to work with the STB to help them understand our concerns, how it could help, how it couldn't help, and then get to a place where if there is action taken, it's sensible. Thanks, guys. Appreciate the time, as always. Mm-hmm. Our next question is from the line of Ben Nolan with Stifel. Please proceed with your question. Thanks. So I sort of a two-part question maybe for Kenny. First, on the coal, the ramp up that you guys have seen has been pretty remarkable, but you talked about higher natural gas prices incentivizing more. I was curious first, what is your ability to sort of continue to toggle up there? And then, similarly, what's the ability of your customers to also toggle up? And then, on the petroleum side, I guess, I'm a little surprised that there's not more volume growth in that market given how much drilling activity there is and everything else just domestically around the oil and gas side. Maybe a little color on that. Thanks a lot, Ben. On the coal side, again, you've got 2 different things. You've got some business development wins, and you also have the natural gas prices. Certainly, we didn't predict last year that the natural gas prices would be in that $7 range. As it stands here today, I'll tell you, it's encouraging that that forecast is throughout the rest of the year. As we talk to our customers, we don't see that they've made any capital investment per se in terms of trying to get more of that out of the ground, but we do know that they have done quite a bit of hiring to get more utility and get more product out. We're working with them on that, and we stay very connected with Eric's team from a forecast perspective. Yeah, I understand your perspective with petroleum. What you should think about is just a part of that that's not here this year is our crude oil business. Those spreads between Canada and call it the Gulf or Texas are just not where it should be. That's the impact that you're seeing there. We do see, to your point, the drilling show up in other commodities. We're seeing a lot of drilling pipe, OCTG that's moving. I talked about the frac sand. There's some other industrial chemicals that go into the drilling process that we're seeing. That's where that's showing up on our railroad. Kenny, in that context, the heat of that market doesn't look like it did the last super strong cycle we had in places like the Permian and the Eagle Ford. There seems to be a little bit more discipline on capital spending and they're slower in walking up production. Absolutely. All right. Great. I appreciate the color. Thank you. Our next question comes from the line of Jeff Kauffman with Vertical. Please proceed with your question. Thank you very much, and thanks for squeezing me in here. You know, a lot's been asked about short-term and service and short-term disruptions. Kenny, I wanna focus a little longer term, really on three things. Number one, you know, given the instability off the West Coast, we've seen a lot of shippers go to the East Coast. So the first part of this is, you know, how do you see that playing out, and what are your customers telling you longer term? Secondly, I know Lance was talking about the company's donation to the efforts in Ukraine. As we talk longer term, are any of your customers approaching you and saying, "Listen, what's going on out there has changed our ability to move product around the globe. How can Union Pacific help us?" The topic of reshoring, which I know hasn't really happened to a large degree yet, but in the long run, I know a lot of customers are rethinking this. Maybe talk about, you know, those three areas, opportunities, say over a two, three, four-year period for UP. Yeah. It's interesting that you would bring that up on the international intermodal side. It's hard to tell what's gonna be a one-off versus a permanent change from a, I'll call it directional shipments of international intermodal. We have worked with an international carrier here, where we do have a move that's coming east to west, and so we're excited about that move. We'll see what happens there from a permanent basis. Yes, I believe that some of the global disruptions will make our customers think about where they source from, and we are hearing more conversations about nearshoring. We have not seen those investments to really mirror those conversations. Then as you, I think the last question was about Ukraine and those thoughts there. We're always talking to our customers about solutions that we can provide them. When you think about the six border access, Mexico is clearly one. I just gave you an example of going from east to west. We still feel very good about our products moving off the West Coast, and we've got really solid relationships from anything that wants to come out of Canada. We're prepared. We've got $600 million in investment on our intermodal network, so we're prepared for more growth. Okay. That's all I have. Thanks. Thank you, Jeff. Thank you. Our final question today will come from the line of Cherilyn Radbourne with TD Cowen. Please proceed with your question. Thanks very much, and good morning. Just a quick one from me. As we start to move towards peak season, was just hoping you could talk about the current state of the Chicago gateway, both in terms of your own terminals, but also your interchanges with the other rails, grade capacity and so forth. Sure. Yeah. Sherilyn, so if we look at our, I'm gonna speak specifically to Chicago first, but the same would be true as we look at Memphis and as we look at even New Orleans. Right now, those all remain fluid from an intermodal perspective. That doesn't mean that we don't work through challenges on a day-to-day basis as we work through interchange issues, but we have strong relationships with the other carriers. We work through those issues, and right now I'm very happy with where those terminals are. If we were asking about one I'm most focused on, it's just simply New Orleans, and it's always one that we're focused on the most, because it's such a tight amount of track and operations in a really small area. Otherwise, no concerns at this point. Thank you for the time. All right. Thank you, Cherilyn. Thank you. This concludes the question and answer session. I'll now turn the call back over to Lance Fritz for closing comments. All right. Thank you, Rob, and thank you all for engaging with us this morning and for your questions. We're looking forward to talking with you again in July to discuss our 2nd quarter results. Until then, take care. Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may now disconnect your lines and have a wonderful day.