BNSF Announces $5 Billion Capital Commitment Program

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BNSF Railway Co. last week said it is planning to spend $5 billion on capital expenditures in 2014, which would be a new single-year record for the company and a $1 billion increase over its 2013 capital spend.

The largest piece of the capital plan is a planned $2.3 billion spend on BNSF’s core network and related assets. BNSF also plans to spend approximately $1.6 billion on locomotive, freight car and other equipment acquisitions. In addition, the program includes about $200 million for continued installation of positive train control (PTC) and approximately $900 million for terminal, line and intermodal expansion and efficiency projects.

BNSF handled more than 50 percent of the volume increases for the rail industry in 2013. The growth was led by an 8 percent increase in domestic intermodal units, an 11 percent increase in Industrial Products volumes led by crude-by-rail related traffic, a 3 percent increase in coal volumes and a fourth quarter surge in agricultural products.

This growth is on top of a 2012 BNSF total volume base of more than 9.6 million units. Much of the capacity expansion in the 2014 capital plan is for infrastructure investment on BNSF’s Northern Corridor to put the company in position to meet all customer service expectations, including Amtrak.

BNSF’s expansion and efficiency projects will be primarily focused on line capacity improvements to accommodate growth in agricultural products, intermodal, automotive, and industrial products volumes related to crude oil production, and other terminal improvements to enhance productivity and velocity. More than $900 million of the capital plan is for expansion and maintenance in the Northern Corridor.

“Our capital plan continues to focus on improving our ability to meet our customers’ service expectations, increasing our capacity where there is growth, and strengthening our railroad to help ensure it remains the safest means of ground transportation for freight,” Carl Ice, president and chief executive officer of BNSF Railway, said in a statement. “BNSF’s capital investments are an integral part of making sure our network is well prepared for the demand for freight rail service in the U.S. and helps ensure the continued integrity and reliability of our network.”