Tag Archives: BNSF

BNSF Carloads Continue to Lag 2019 Levels

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BNSF Railway’s carloads for 2019 have continued their downward trend as compared to 2018. The decline is due in part to a major decrease in coal shipments.

Coal shipments as of the week ending April 13, 2019, are down 10.25% over the same period last year, and combined intermodal and carloads numbers are down 5.15% in the aggregate.

Also, showing weaker numbers are grain shipments, which are down 12.85%, and shipments of motor vehicles are down 5.51%.

2018 was a strong year for BNSF, with the combined carloads including intermodal up 4.03% over 2017, however 2019’s numbers have been hurt by weak global demand for coal and severe flooding in the Midwest that has closed some routes and slowed others.

© 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 Granted FAA Exemptions for its Drone Operations

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BNSF Railway has received an exemption from the Federal Aviation Administration’s (FAA) Extension, Safety and Security Act of 2016 so it can expand its drone inspection operations.

Under a pilot program approved by the FAA, BNSF has been testing drones for supplemental inspection of rail infrastructure.

The exemption allowed its drones to fly beyond visual line of sight. It includes a programmed aircraft with long-range flight plans to be flown autonomously and out of view of an operator.

Under the FAA exemption, BNSF has:

• permission to fly BVLOS flights below 400 feet above ground level because altitudes higher pose a risk of collision with other aircraft;

• an exemption from requiring a FAA airworthiness certificate because the aircraft does not create a hazard to users of national airspace system or the public;

• an exemption from certain maintenance requirements so that BNSF can conduct regularly scheduled maintenance and inspection in accordance with the drone operation manual; and

• permission for BNSF UAS pilots that hold a private pilot certificate and a third-class medical certification to conduct operations for compensation.

© 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.

Record Flooding Impacting BNSF’s Midwest Service

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BNSF Railway has been significantly impacted by the record flooding that has reduced or stopped service in portions of Iowa, Nebraska and Missouri.

BNSF teams remain focused on restoring service and states that several subdivisions, either partially or in full, remain out of service due to high water levels, flood-related damage to infrastructure or both.

Water levels have dropped in some locations, and we expect to have service restored on our Sioux City Subdivision, which runs between Sioux City, Iowa and Ashland, Nebraska, this past weekend.

With coordination through a 24-hour command center in Lincoln, Nebraska, BNSF is moving multiple belt trains full of ballast to washed out locations throughout the day and night.

Crews have made considerable progress with track repairs, including rail and tie replacement, in those locations where flood waters have receded.

Some locations in the area, however, will require more extensive repair work before restoration of service is possible.

Damage to the two rail bridges that cross over the Platte River near La Platte, Nebraska, was extensive.

© 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.

Port of Stockton’s Record Numbers is Good News for BNSF

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The Port of Stockton has announced that 2018 was a second consecutive record-setting year. The record was good news for freight haulers BNSF Railway and Union Pacific, as well.

The Port of Stockton is an inland facility situated on a deep-water channel located in the extended San Francisco Bay Area. Operating since 1933, the Port of Stockton is the 4th largest port in California and handles dry bulk, breakbulk, liquid bulk, warehousing and project cargoes. Services include stevedoring, warehousing, inventory management and transloading.

The overall cargo volume was up slightly from the previous year reaching 4,739,249 metric tonnes (up 0.5% vs. 4,713,513 in 2017).

“In 2018, we saw our maritime tonnage grow for the third year running. During the same period, our tenant base set a new record for the second year in a row,” said Port Director, Richard Aschieris. “In the current climate of challenging international trade, these accomplishments are precedent setting and once again highlight the unique strengths of the Port of Stockton’s staff and facilities.”

Aschieris continued, “There are many factors contributing to our record growth. One is giving our customers speed to market. We facilitate customers getting their product moving as quickly as possible because we are centrally located, adjacent to less congested highways and uniquely offer a 24/7 gate for round-the-clock access to freight. The Port of Stockton is served by both the UP and BNSF railways and our labor force is experienced and flexible. Another strength is that clients have room to grow: we offer over 7 million square feet of existing warehouse space and another 600 acres for future development.”

“While 2018 was another record-setting year for us, we can’t rest on past successes. We must continue to look to the future as new projects are brought online,” stated Board of Commission Chair, Stephen Griffen. “We will continue to strengthen our infrastructure which will help us meet the needs of continued growth and capacity. We are confident that more companies will follow suit and use the Port of Stockton.”

“Our continued growth adds strength to the Stockton and San Joaquin County economies and helps to create jobs,” said Aschieris. “We believe we will increase employment opportunities in the area. The Port of Stockton supports 10,000 family-wage jobs. We made a strategic move to diversify our cargo base and began making focused investments in our infrastructure over 10 years ago. Combine that with the hard work of our labor forces and the results are new highs for the Port of Stockton.”

© 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 Begins Construction On Its Newest Logistics Center

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BNSF Railway has announced that construction is underway on its newest logistics center, located in Hudson, Colorado, near Denver.

The Logistics Center Hudson is designed to help customers more easily reach Denver and surrounding markets through rail-served sites.

The 430-acre center — situated about 25 miles north of Denver International Airport and 30 miles northeast of downtown Denver — will feature 15 sites for customers that want to ship via individual rail cars and a unit-train site for customers that want to ship entire trainloads.

BNSF’s Logistics centers offer direct-rail service in multi-customer, multi-commodity business parks. BNSF differs from private business parks by investing directly in the development of the facility to create sites in under-served, strategic, and primarily end-user markets.

“Establishing logistics centers, including the one in Hudson, is the latest way we are working to make sure new, existing and potential customers who want to locate on rail in a densely populated, growing industrial market have the option to do so. By purchasing and developing land in advance, we can help our customers save time and money when they are looking to expand or relocate their facility,” said Colby Tanner, BNSF’s assistant vice president, economic development.

© 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 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.