BNSF Railway said today it plans to spend $6 billion on capital investments next year to expand operations and improve service levels that have suffered due to increased demand and the lingering effects of last winter's inclement weather. The investment will focus especially on BNSF's key northern line running from the Pacific Northwest to Chicago.
The estimates, if they turn out to be accurate, will mark an all-time capital expenditure record for the Ft. Worth, Texas-based carrier, a unit of Berkshire Hathaway Inc. BNSF also said its 2014 capital expenditure investment will come in at $5.5 billion, a record for the railroad.
Of the estimated 2015 total, $2.9 billion is expected to go toward replacing and upgrading rails, ties, and ballast, BNSF said. Another $1.5 billion is earmarked for expansion projects, the company said. Of that, one-third will occur in BNSF's northern region, which is experiencing rapid growth in petroleum and agricultural traffic and was hit the hardest by the severe weather this past winter.
BNSF also plans to buy 330 new locomotives to add to its fleet of 7,500 and to replace locomotives nearing the end of their useful life.
The geography of the BNSF system has made it the recipient of plentiful crude-by-rail traffic and grain traffic. It has also made it the chief target of shipper criticism of deteriorating rail service, although all railroads have experienced difficulties over the past 12 months. As of November, BNSF's average train speed was clocked at 20.7 miles per hour (mph), down from 22.3 mph in the same period in 2013, according to data submitted to the Association of American Railroads (AAR). Terminal dwell times systemwide have increased to 29 hours from 28.8 hours a year earlier, according to data filed with the AAR.
BNSF said it would announce early next year the details for the various line capacity and maintenance projects it plans to make, particularly those along the northern region.