OMAHA -- Union Pacific Corp. Chairman and Chief Executive Dick Davidson said increased security stemming from the Sept. 11 terrorist attacks could translate into new business opportunities for the railroad giant, the Omaha World-Herald reports.

"The security issue created an opportunity for railroads," he said Monday at a Salomon Smith Barney Transportation Conference in New York that was broadcast via Webcast. "After the Sept. 11 incident, trucks were backed up at the border (for days). Railroads did not experience that."

Davidson said that at Laredo, Texas - a U.S. border town with Mexico - the U.S. Customs Service has a gamma X-ray machine that can look through steel train cars and identify anything suspicious. That machine, Davidson said, allows the rail interchange to be "very fluid" and keeps trains moving.

Though Davidson said he did not see the aftermath of Sept. 11 causing a major change in the rail business, he does see some potential movement. That was one prospect for Omaha-based Union Pacific's future, among other opportunities that Davidson pointed out in a 35-minute address. Union Pacific's principal operating unit, its railroad, is the largest in the nation.

Davidson said that revenues from shipping into and out of Mexico remain strong, especially for agricultural products. Union Pacific has the largest U.S. rail link with Mexico and also owns 26 percent of the Ferrocarril Mexicano, one of Mexico's two major railroads. Other major products shipped to and from Mexico include automobiles, auto parts and beer.

Despite an economic slowdown nationally, Davidson said U.P. last month broke a record for the number of carloadings in a month, set in October 2000. But he said October's strong numbers are "not a prognosticator for the future."

"We still expect moderate revenue growth in the fourth quarter (of 2001)," he said. "In the near term, the economy provides many challenges."

U.P. posted third-quarter earnings for the three months ended Sept. 30 of $267 million, or $1.04 a share, a 4 percent increase from year-ago levels.

Beth Whited, U.P.'s assistant vice president for investor relations, said the Western United States represents a potential $90 billion market that could be served by rail. That market is in areas where products are shipped 500 miles or longer on routes accessible by rail.

Railroads have 22 percent of that market now, while trucks carry the rest. When asked by analysts about the prospects of taking truck market share, Davidson said it takes time. "You have to go in and earn your spurs," he said.

Davidson said one of U.P.'s services that he expects to grow is Express Lane, a partnership with Richmond, Va.-based CSX, in which trains from the West Coast move fruits and vegetables to, for example, New York City in seven days and to Boston in eight days.

It's the only such service where perishables are shipped cross-country on the same railcar. Established in April 2000, Express Lane also moves perishables to Philadelphia; Montreal, Canada; Jacksonville, Fla.; and Atlanta.

"We expect volume to grow 25 percent because of its 95 percent on-time performance," Davidson said.

Another market opportunity is in the shipping of automotive parts, especially those manufactured in Mexico. U.P. already controls 80 percent of the rail market for shipping finished vehicles in the Western United States.