Union Pacific announces plans to open up a new Phoenix-based intermodal terminal in Q1 2024

Omaha, Neb.-based Class I railroad carrier Union Pacific (UP) said this week that it will be rolling out a new Phoenix-based intermodal terminal, which will provide shippers with service between ocean ports in the Los Angeles basin and the Southwest.

The company said that the new terminal, which is UP-owned and operated, will open in the first quarter of next year and is located in the company’s downtown rail yard, equipped with the needed capacity to grow to meet customer demand.

“We are excited to offer regional shippers and receivers in Arizona a fast, sustainable rail option to move product into and out of Southern California that is cost competitive and removes trucks from our nation's congested highways, with an ability to expand offerings and grow in the future” said Kenny Rocker, Executive Vice President–Marketing and Sales for Union Pacific, in a statement.

Union Pacific officials said that this new Phoenix-based intermodal terminal expands the company’s intermodal footprint, which it highlighted is the North America’s largest, coupled with the most coast-to-coast services.

In its third quarter earnings release, UP’s intermodal revenue fell 6% annually, to $763 million, with revenue for the segment down 5% annually through the first three quarters of 2023, to $2.246 billion. Average revenue per intermodal car, for the third quarter, at $1,459, was down 13% through the first three quarters of the year, to $1,500.   

UP’s Rocker said on the third quarter earnings call that intermodal volumes were down in the quarter and were primarily driven by softness in parcel segment and weak imports on the West Coast, while domestic truckload volume was slightly up driven by business development wins and strengthening in its Mexico shipments.