<B>UP Announces Plan to Hike Prices</B>

Last week the Union Pacific Railroad announced plans to raise its freight prices in the fourth quarter to reflect rapidly changing market conditions and sharply higher fuel costs.

Price increases will begin to be implemented early next month and will apply to local as well as interline business. Contract rates also will be increased in accordance with specific escalation provisions, the carrier said in a statement.

The company, the largest railroad in the United States, noted that in addition to higher fuel costs, the company also is facing a number of other higher costs, including "a convergence of other cost increases such as health and welfare, and labor inflation, that are confronting companies in almost every industry."

Despite higher freight prices, UP expects to see operational advanced, productivity improvements and improved technology will allow the company to keep costs under control.

Diesel fuel prices have more than doubled over the past year, from 65 cents a gallon to an average of more than $1 a gallon, the railroad said.

Union Pacific has 36,000 miles of track across 23 states from the Midwest to the West and Gulf coasts. It operates the country's largest fleet of diesel locomotives, consuming about 1.3 billion gallons of fuel each year.