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More Shipments, Higher Prices Coming: Union Pacific CEO

Union Pacific expects to ship more coal, farm commodities and other products in the second half of the year, at higher prices if the economy allows, CEO Jim Young said Thursday.

"Pricing is good in our business. We are providing very good service to our customers right now," the railroad executive told CNBC.

Earlier Thursday, Union Pacific reported a 10 percent increase in second-quarter profit, boosted by higher carloads of chemicals and agricultural products. Overall shipping volume was up 3 percent in the quarter, while the price of diesel fuel increased 44 percent to an average of $3.29 per gallon from last year's $2.29.

While Young expects strong second-half shipments, particularly of coal and grains, he said retailers are being "a little cautious" in deciding how much to ship to stores, and when to do it. Many retailers are shipping goods at the last minute, he said, taking advantage of "railroads providing good service."

Young would not provide guidance on prices for the second half, but noted core prices rose 4.5 percent in the second quarter. Future pricing is dependent on how the economy does in the second-half, he said.

Union Pacific spent $3.3 billion capital expenses—jobs, new investment and infrastructure—so the railroad must "continue to drive the returns up," he said.

The Associated Press contributed to this report.