Category Archives: BNSF

BNSF Announces $80 Million Capital Program in New Mexico for 2019

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BNSF Railway Company (BNSF) has announced that its 2019 capital expenditure program in New Mexico will be approximately $80 million. In addition to maintenance projects, the program includes additional quadruple main tracks to enhance capacity along the Southern Transcon route.

Maintenance projects to ensure BNSF continues to operate a safe and reliable rail network account for a majority of this year’s plan in New Mexico. Those projects consist of replacing and upgrading the main components for the tracks on which BNSF trains operate including rail, rail ties and ballast.

Nearly 4.5 million carloads of freight move along BNSF lines in New Mexico annually. The 2019 maintenance program in New Mexico includes more than 850 miles of track surfacing and/or undercutting work as well as the replacement of approximately 20 miles of rail and more than 200,000 ties. BNSF has invested approximately $555 million to expand and maintain its network in the state over the past five years.

On the Clovis Subdivision in Belen, BNSF will begin a project to extend its quadruple main tracks to enhance capacity along the Southern Transcon route.

“The Southern Transcon is the primary route for BNSF’s intermodal franchise. Building upon our investments totaling more than $1 billion in 2018 on the route, the extension of the quadruple track in Belen highlights our commitment to provide a safe, efficient and reliable network to our customers,” said Keary Walls, general manager of operations, Southwest Division.

The 2019 planned capital investments in the state are part of BNSF’s $3.57 billion network-wide capital expenditure program announced earlier this month. These investments include roughly $2.47 billion to replace and maintain core network and related assets, approximately $760 million on expansion and efficiency projects and about $340 million for freight cars and other equipment acquisitions.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Starts 2019 With Dramatic Increase in Petroleum Shipments

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BNSF Railway has started 2019 with positive overall numbers as compared to 2018 due to a huge increase in petroleum shipments.

Combined intermodal and carloads numbers are up 2.82% in the aggregate.

Of particular note are much higher petroleum shipments, which as of the week ending January 12, 2019, are up a whopping 43.82% over the same period last year.

Also, showing strong numbers are metals shipments, which are up 29.90%, and shipments of stone, clay and glass are up 22.06%.

Noteworthy on the downside are coal shipments, which are -1.16% and lumber shipments are down -17.37%.

Total shipments excluding intermodal are up a robust 4.98%

2018 was a strong year for BNSF, with the combined carloads including intermodal up 4.03% over 2017, and 2019 is starting off even better.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Lithium-Ion Battery-Electric Locomotives in Development in BNSF/GE partnership

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GE and BNSF Railway Company are hoping to demonstrate a battery-powered locomotive paired with diesel locomotives in a “consist” (railroad jargon for a sequence of connected locomotives) to power a freight train along a stretch of rail in California’s Central Valley between Stockton and Barstow.

If successful, the fuel savings could have a big impact on BNSF and other railroads. And the environmental benefits could also help BNSF advance one of its major capacity-building projects.

BNSF will run the pilot program with help from GE Transportation, which is developing the locomotive. And hopes to have the first locomotive running within two year.

GE notes that adding even one battery-powered locomotive to the train could reduce the consist’s total fuel consumption by up to 15 percent, according to Alan Hamilton, general manager of systems engineering at GE Transportation.

“It’s a big deal,” Hamilton says. “Fuel costs are typically the largest component in a rail operator’s costs.”

The leap to battery power is not as big of one as it may at first seem. Diesel-electric locomotives like the machines GE builds are already essentially power plants on wheels. They use a powerful diesel engine to generate the electricity that drives the electric motors that spin the wheels.

GE believes that a battery-powered locomotive is the perfect complement to its diesel-electric brethren. The battery will hold 2,400 kilowatt-hours of energy, meaning it’s able to maintain full horsepower for roughly 30 minutes on a given charge. Then the operator can decide how to use that power.

For example, the operator could slash emissions from the diesel-powered locomotives by drawing heavily on the battery to start up the train. This would be especially desirable if the train were pulling out of a city rail yard, close to populated areas. Using the battery power also cuts down on noise. The train operator may also choose to “graze” on battery power — or even recharge the battery — when the train is cruising through open landscape, saving hundreds of gallons of diesel.

Each battery locomotive also has a brain, in the form of an onboard supervisory control system. The rail operator can input data about the train’s journey into the system — such as how much weight it’s hauling, the types of locomotives in the consist, and its rout — to allow the computer to make decisions about the best way to use the battery before the train even pulls away. “The trip-optimizing software can look ahead and predict the most efficient way to generate and use that energy,” Hamilton says.

Imagine a battery-enhanced train making a 500-mile trip across sparsely populated terrain — meaning fuel economy is the name of the game. The software will calculate the optimum ratio of battery power to diesel usage for such a journey and decide on the most favorable balance for the hybrid locomotive consist. The software can then pinpoint the exact moments to draw on the battery, thus sparing diesel. GE’s flexible solution will give rail operators several new options for optimizing their network, says Dennis Peters, executive product manager at GE Transportation.

The new locomotive will use a battery cell similar to what you might find under the hood of an electric car. It is a lithium-ion energy storage unit with cells that contain a combination of nickel, manganese and cobalt. In terms of scale and packaging, however, “this train battery is a different animal,” Peters says.

A standard electric-car battery usually holds a few hundred storage cells — each around the size of a mini tablet computer. But the prototype of the new locomotive will have a battery with approximately 20,000 cells, and future versions may have as many as 50,000 cells. The cells also must be able to weather the heavy-going environment of a locomotive, with all its jolts and shocks.

To build the demonstration model, workers will strip out the engine and cooling systems from a diesel locomotive to make way for the battery under the hood. But from the outside, the battery-powered locomotive won’t look much different from its diesel counterparts.

The impact on BNSF could be huge, not only in fuel cost-savings, but if it could use battery-powered locomotives in urban areas, such as the Port of Long Beach, it might be able to overcome the opposition to its long-stalled Southern California International Gateway plan, which has been held up due to environmental concerns tied to diesel emissions.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Receives $22.6 Million State Grant for Clean Technology Pilot Program

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BNSF Railway may have scrapped its plan for liquid natural gas powered engines, but that doesn’t mean it has given up on lower-polluting technology for a host of railroad applications, including locomotives and railyards.

BNSF and the San Joaquin Valley Air Pollution Control District were preliminarily awarded a $22.6 million Zero and Near Zero Emission Freight Facilities grant from the California Air Resource Board to pilot several emissions reducing technologies in and around railyards.

BNSF will collaborate with various industry partners to test the feasibility of these technologies.

“BNSF is focused on continuing to reduce our environmental impact, and we’re committed to doing our part to test and prove the commercial viability of emerging technologies that reduce emissions,” said John Lovenburg, vice president, Environmental.

These initiatives will build on BNSF’s existing investments in sustainable technologies including idle control, electric wide-span cranes, electric hostlers, automated gates at its intermodal facilities, and Tier 4 locomotives. As part of the project, BNSF will partner with GE Transportation on a battery-electric locomotive that will be paired with diesel locomotives to power a freight train traveling from Stockton to Barstow.

Transportation will develop an all battery-electric locomotive to validate the technology’s tremendous operational benefits and growth potential in the freight rail industry. The company will design and build an AC Evolution Series locomotive featuring an overall energy-management system, including onboard energy storage, which coupled with advanced system-optimization controls will improve performance. This battery-electric locomotive will generate 2,400 kilowatt-hours of power and could potentially reduce a freight train’s total fuel consumption by at least 10 to 15 percent.

“Battery-powered or hybrid locomotives are promising technologies for the rail industry with the potential to reduce operating costs and emissions,” said Dominique Malenfant, vice president, Global Technology, GE Transportation. “This project will give us tremendous insight into the capabilities of battery power and the best operational methods of leveraging the technology. It will accelerate the development of this cleaner, more efficient solution for the freight rail industry.”

In addition, two hybrid rubber-tire gantry cranes from Mi-Jack will be piloted; one at the Stockton Intermodal Facility and another at the San Bernardino Intermodal Facility. The hybrid cranes, when compared to their diesel counterparts, have the ability to reduce emissions by 70 percent.

A Taylor all-electric side loader will also be piloted at the San Bernardino Intermodal Facility. Finally, BNSF will partner with SH&H, a drayage truck provider, to demonstrate a BYD all-electric drayage truck in San Bernardino.

The equipment will be manufactured in 2019 and deployed in 2020. The grant will cover approximately half the cost of what is estimated to be a $45 million project. The remaining amount will be funded by BNSF and the other corporate partners.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Chairman Matthew Rose to Retire in April 2019

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BNSF Railway chairman Matthew Rose has announced that he will step down and retire in April of 2019.

At the end of his tenure, Rose will have been Executive Chairman for six years, and BNSF Chief Executive Officer for the prior 13 years. He also served in senior leadership for marketing and operations before assuming the CEO role in 2000.

During his tenure as CEO, he helped guide the acquisition of BNSF by Berkshire Hathaway (BRK) in 2009.

“It was a very lucky day for me and for Berkshire Hathaway when I met Matt Rose,” said Warren Buffett, chairman of Berkshire Hathaway. “Under Matt’s management, BNSF has become a major source of profit and pride for Berkshire. And, as a citizen, Matt has been an exemplar for corporate leadership.”

“I have been incredibly fortunate to work alongside some of the most talented people in the transportation industry,” said Rose. “Through my 26 years at BNSF – 19 in leadership – I have seen enormous change in our economy. Our company has navigated those changes well and now is extremely well positioned for the next several decades. It has been an honor to lead this organization, as a publicly traded company and also as part of BRK.”

© 2018 David Mazor


Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Opens New Logistics Center

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BNSF Railway has opened its newest logistics center in Moore, Okla., near Oklahoma City.

Logistics Center Oklahoma City is located within the city limits of Oklahoma City and Moore and is designed to accommodate manifest and unit train customers in addition to a site for storage.

“Logistics centers are just one way BNSF offers more choices, flexibility and efficiency for new, potential and existing customers,” said Colby Tanner, assistant vice president, economic development. “Logistics Center Oklahoma City provides unrivaled access to the state’s largest population center and one of our nation’s most prominent energy centers.”

The 195-acre site is located due east of BNSF’s Flynn Yard – an ideal location for both rail and highway access. A double-ended industry lead track will connect to the main line to serve customers at this location. Unit trains can arrive from either direction and without impeding access to manifest sites. All customers’ sites at Logistics Center Oklahoma City are customizable to fit their needs.

BNSF Logistics Centers focus on offering direct rail service in multi-customer, multi-commodity business parks. BNSF invests directly in the development of the facility to create sites in under-served, strategic, end-user markets. These facilities can service carload, unit train customers, or both.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Montana Business Park Receives BNSF Certification

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The Kootenai Business Park in Libby, Montana, is now officially one of roughly 20 industrial sites nationwide to be certified by BNSF Railway’s certification program.

In 2016, the Kootenai Business Park received a $750,000 grant from the U.S. Economic Development Administration to restore rail service into the business park.

The total cost of the rail project was $1.6 million to rebuild the 14,000-foot rail spur that originally connected the former Stimson Lumber Co. mill site to BNSF Railway’s main line between Chicago and Seattle.

The Lincoln County Port Authority (LCPA) owns and operates 400 acres of commercial/industrial property acquired after Stimson Lumber Company ceased activity on the property in 2002.

The property, referred to as the Kootenai Business Park (KBP), is suitable for commercial and industrial redevelopment, and a major strategy of the KBP has been the continued investment in infrastructure on the site to attract and support business development.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

U.S. Rail Infrastructure Market to Reach $5.93 billion by 2025

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According to analysts at ResearchAndMarkets.com, the U.S. rail infrastructure market is projected to reach $5.93 billion by 2025.

“We will not hesitate to bring on additional resources — including infrastructure, equipment, and people — to handle the growth our customers bring us,” BNSF Railway CEO Carl Ice stated in a recent letter to federal regulators at the Surface Transportation Board.

Traffic volume at BNSF Railways is currently at historically high levels for this time of year, Ice also noted.

The U.S. rail infrastructure market is expected to witness a lucrative growth on account of increasing population and demographics in this country. United States is becoming an urbanized country and it is anticipated that it will cover larger network of metropolitan areas.

The report notes that the industry also provides 221,000 jobs across United States and also offers various public benefits such as reducing highway fatalities, logistics cost, greenhouse gases and fuel consumption, reduction in road congestion, and public infrastructure maintenance cost. Rising passenger volume, increasing number of rail routes and network, rolling infrastructure and stock, growing awareness regarding passenger rail is anticipated to boost the U.S. rail infrastructure market over the forecast period.

Railroads are continuously developing and researching high tech innovations to enhance rail operations which in turn is expected to add market growth. Growing investment in locomotives, freight cars, computer equipment, highway equipment, and other equipment is anticipated to add U.S. rail infrastructure market growth over the forecast period.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Restrictions Creates Rush for New Tank Cars

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After BNSF suffered a June derailment that saw ruptured tank cars spill some 230,000 gallons of crude oil spilled into an Iowa river, the class 1 railroad has reportedly responded by limiting the number of retrofitted tank cars called DOT 117Rs.

According to Reuters, BNSF banned the retrofitted cars, which were the type of cars that leaked in the Iowa spill, from all new contracts. The move sent refiners and producers scrambling to lease new tank cars.

BNSF has not confirmed the restriction.

The lease price of new tank cars has more than doubled from $400 a month last year to $1,000 today.

BNSF does not own the tank cars that run on its lines hauling crude oil and ethanol. The cars are owned by companies such as ConocoPhillips, or leased from brokers.

Ironically, BNSF, which is owned by Berkshire Hathaway, is limiting the very tank cars that are retrofitted by UTLX, another Berkshire company. UTLX has retrofitted almost 5,000 DOT-111 tank cars to the new DOT-117R standards.

In 2016, UTLX opened a tank car remanufacturing facility in Marion, Ohio to bring older tank cars up to DOT-117R standards and continue to be used for flammable liquids service.

The retrofits includes new top fittings protection, thermal insulation, an 11-gauge steel jacket, full ½-inch thick head shields, and a bottom outlet valve handle that disengages from the valve when the car is in transit.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Despite PTC Implementation, BNSF Files Extension

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BNSF Railway has announced that as of December 2017 it had fully installed and was operating under Positive Train Control (PTC) on all mandated subdivisions in advance of the December 31, 2018 deadline.

It has now announced that it nonetheless submitted a request to the Department of Transportation (DOT) for a two-year extension of the PTC deadline. The extension is required due to the Federal Railroad Administration’s (FRA) current interpretation of the law that full implementation status cannot be achieved until all non-BNSF trains and/or equipment operating on its PTC-equipped lines are also PTC-compliant.

“BNSF has succeeded in the adoption of this key safety technology. Even with this request for a deadline extension, BNSF’s PTC network is installed and we are currently running, and will continue to run, more than a thousand trains daily with PTC as we continue to refine the system and resolve technological challenges,” said Chris Matthews, BNSF assistant vice president, Network Control Systems.

As reported, BNSF completed the installation of all mandated PTC infrastructure at the end of 2017, including 88 required subdivisions covering more than 11,500 route miles on its network. However, to be considered fully implemented requires that all other railroads operating across any of BNSF’s PTC-equipped lines must be capable of operating with BNSF’s PTC system. This interoperability of PTC systems between Class I, commuter and short line rail carriers remains a challenge.

BNSF has successfully demonstrated interoperability with several railroads that operate on its network, including commuter railroads and Amtrak. However, not all railroads that operate on BNSF will have completed their PTC installation by the end of 2018.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.