Union Pacific said soaring diesel prices were prompting some shippers to move freight from trucks to rail, using rail’s fuel-efficiency advantage to reduce transportation costs. Speaking at the Morgan Stanley Laguna Conference, Chief Financial Officer Jennifer Hamann said the shift was adding to broader cyclical improvements in freight demand. The railroad expects diesel costs to average about $4.25 a gallon in the third quarter but is currently paying about $5.25 to $5.30, pressuring its operating ratio. Its underlying business remained robust, with industrial shipments and intermodal traffic (freight moved by multiple transport modes) supporting volume growth. Union Pacific has not seen significant demand destruction or a shipment slowdown from higher energy costs, while customers remain bullish based on healthy order books and inventory trends.