UPDATE 1-Union Pacific CEO says 2016 freight volumes could drop 6-8 pct
(Adds comments on coal, consumers, TPP, paragraphs 3-13)
By Nick Carey
CHICAGO, July 21 (Reuters) - Full-year 2016 freight volumes at Union Pacific Corp could fall between 6 percent and 8 percent from 2015, driven by declining coal volumes, weak shale oil business and the strong U.S. dollar, the company's top executive said on Thursday.
Chief Executive Lance Fritz told Reuters a "not very robust" showing by U.S. consumers would also hurt freight. Previously the company has said it expected freight volumes for the year to be down in the "mid-single digits."
Fritz spoke to Reuters after the Omaha, Nebraska-based railroad reported a lower second-quarter profit that met analyst expectations.
Like the other major U.S. railroads, Union Pacific has been struggling to manage a major decline in coal freight volumes as utilities have switched to burning cheaper natural gas and the strong U.S. dollar has weighed on coal exports.
Fritz said the decline in coal has been partially offset recently by rising natural gas prices and a hot summer, where demand for electricity spikes with the use of power-hungry air conditioning units.
"There are probably opportunities for coal to grow in (power) generation," he said. "We just to don't see it growing back to where it used to be."
Fritz said as a result the company is looking for new markets and is growing its business outside of coal. As an example, he said Union Pacific has been focusing on growing its cross-border business hauling finished vehicles and auto parts between the United States and Mexico. Continuación...