UP Team Came Out Swinging for Big Coal Win

Article published by uprr.com

Sometimes you swing for the fences and miss; other times you hit a homerun.

Both apply in the story of Union Pacific’s big coal win with electric utility Evergy.

UP recently scored a multiyear contract with Evergy, greatly expanding the railroad’s current transportation portfolio with the customer. The deal includes business that will transition from another Class I railroad throughout 2021-2022 – the largest coal penetration win over that competitor in over a decade. 

It took some perseverance from the UP team along the way to make that happen.

Enter David Black, director-Bulk, Marketing and Sales; Tim Gilg, general director-Bulk, Marketing and Sales; and Reed Janousek, director-Bulk, Marketing and Sales.

The team embarked on a long, strategic approach for this business in 2018 after not being awarded a competitive bid for two Evergy power plants (Hawthorn and La Cygne) in Kansas City, Missouri, and La Cygne, Kansas, respectively.

“We began by strengthening our relationship through frequent calls and meetings to express the desire and ability to win the complete portfolio,” Janousek said.

That would include the conversion of the existing Jeffrey Energy Center (JEC) volume in Jeffrey, Kansas, to a UP-direct move. Evergy had a long-term sourcing contract with a coal mine solely served by a UP competitor. However, the mine operator declared bankruptcy in 2019 and UP capitalized on the opportunity, challenging Evergy to avoid an extension and recognize the value of UP-served mines and a direct route.

The UP team further differentiated the case for UP’s proposal by outlining a deep understanding of energy markets and UP’s innovative abilities to tailor a commercial deal for Evergy. This included ambitiously targeting both the conversion of JEC to UP direct for the first time in the plant’s 30-year history, as well as capturing entirely new business with Hawthorn and La Cygne. The final UP proposal presented a compelling case for UP’s ability to help Evergy immediately succeed in the marketplace.

“This was a cross-functional win,” Black said. “The Harriman Dispatching Center coal desk team advised on operational capabilities; Finance assisted with pricing and design elements; and Sales patiently waited for the right moment to aggressively pursue this major win.”

Above all, the team wants to honor the late Bruce Kroese, a longtime UP employee and Marketing and Sales executive.

“This win is a tribute to Bruce,” Gilg said. “He aided us in the closing months of strategic negotiations, resulting in this landmark deal that will now be part of his notable legacy at Union Pacific.”

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