BNSF Railway Company has acquired 3,508 acres of land in Surprise, Arizona in order to build a major intermodal freight and logistics center. The land was bought from the Arizona State Land Department at auction on March 30, 2022 for $49.1 million. BNSF was the sole bidder. BNSF already owns an adjacent 500 acre parcel that is currently zoned as rural residential.
In 2007, BNSF proposed a 130-acre rail yard, 200-acre automotive shipping facility with up to 16 million square feet of warehouse space in Surprise, but the project was put on hold during the Great Recession. At the time, BNSF projected the project would create 6,000 jobs.
Surprise, Arizona is on a BNSF rail line with the Ennis Spur running to the BNSF certified Southwest Railplex industrial park. The two-square mile park is shovel-ready with all major utilities to site.
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 Railway Company and J.B. Hunt Transport Services Inc. are launching a joint effort to substantially improve capacity in the intermodal marketplace while also meeting the expanding needs of current customers.
Demand for intermodal services has grown significantly in recent years as companies look to secure capacity, while reducing costs and their carbon footprint.
Based on current and projected trends, J.B. Hunt plans to grow its intermodal fleet to as many as 150,000 containers in the next three to five years, a 40+% increase from its count at the end of 2021. The company has completed more than four million intermodal loads since 2020.
“Over the past few years, intermodal has been disrupted by increased demand and tight capacity, resulting in poor container velocity and long dwell times,” said John Roberts, president and CEO of J.B. Hunt. “Together, J.B. Hunt and BNSF will enhance their work to bring back the consistency and reliability customers expect with intermodal services and further embrace intermodal conversion and transloading services. This priority falls directly in line with J.B. Hunt’s mission statement to create the most efficient transportation network in North America.”
Looking forward and as part of the initiative, BNSF will increase capability at multiple intermodal facilities. To further integrate its joint service product with J.B. Hunt, BNSF is providing several property locations around key intermodal hubs in Southern California, Chicago, and other key markets to increase efficiency at terminals.
Additionally, BNSF will bolster its railcar equipment to accommodate the anticipated increase in container capacity, which will support efficient throughput and strong service performance.
In addition to growing its container count, J.B. Hunt will add supporting chassis based on market need. Over the years, both companies have invested billions of dollars to ensure intermodal’s ability to grow with customers and meet the increasing demand for intermodal services.
“More than 30 years ago, J.B. Hunt Transport Services and BNSF predecessor The Atchison, Topeka and Santa Fe Railway Company loaded a Hunt trailer onto a railcar to help usher in the modern age of intermodal freight transport,” said Katie Farmer, BNSF president and CEO.
“BNSF’s industry-leading service combined with J.B. Hunt’s unparalleled intermodal product has set the standard for seamless door-to-door service. We will raise the bar on service to the next level through technology and innovation as we further integrate our platforms with real-time data exchanges. We want our customers to enjoy the best of both worlds: economical and environmentally friendly service delivered by transportation’s premium providers.”
The companies will leverage technology, including the industry leading J.B. Hunt 360°®, to improve efficiencies in rail transport. J.B. Hunt 360’s digital freight matching platform is one of the few in the industry to support intermodal services. Based on analysis of J.B. Hunt 360 transactions and annual bid activity, the company estimates that an additional 7 to 11 million shipments could be converted to intermodal, supporting long-term growth opportunities while avoiding carbon emissions.
J.B. Hunt and BNSF disrupted the transportation industry in 1989 by developing a double-stack shipping solution that would complement both rail and trucking services, a first for modern transportation. Today, J.B. Hunt operates the largest company-owned intermodal fleet in North America with more than 109,000 53’ containers supported by company-owned chassis and tractors.
BNSF operates the largest intermodal rail network handling roughly 1 million more intermodal units each year than any other railroad and through their investments offer the fastest intermodal route between Southern California and the Midwest.
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 Railway Company’s dispute with its two largest unions will head to arbitration to resolve a conflict over BNSF’s new attendance policy.
The unions, BLET (Brotherhood of Locomotive Engineers and Trainmen) and the SMART Transportation Division, represent 17,000 BNSF workers and were prevented from striking by a court decision.
U.S. District Court Judge Mark Pittman ruled on February 22, 2022, that the unions’ dispute over the policy constituted a “minor dispute” under the terms and conditions of the Railway Labor Act.
In a joint statement issued by the two unions, they said that “The court’s use of ‘minor’ does not signify the importance of the issue, but is only a legal term which provides that resolution of the matter must be by arbitration. In considering a potential appeal of the District Court’s ruling, it was determined that an appeal could take another one to two years, and likely not result in a different decision. An appeal would not be the quickest, or most effective way, to stop the BNSF policy. The quickest and most direct way to challenge this policy is through a Public Law Board or Special Board of Adjustment, properly constituted under Section 3 of the Railway Labor Act. That board will have the authority to strike down either the entire policy or the most egregious parts of the policy much more quickly. The time frame will be months as opposed to years.”
BNSF’s unions maintain that the BNSF Hi-Viz attendance policy is “forcing its employees to work even when they or their families are sick, and when they are fatigued beyond the point of being able to work safely.”
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 Railway Company and Wabtec have announced a new biofuel testing project that will quantifying the impact of alternative fuels on emissions, durability, and performance in Wabtec locomotives.
“The rail industry is intently focused on reducing its environmental footprint by exploring emerging technologies,” said Bob Bremmer, Group Vice President for Wabtec’s Fleet Innovation and Transformation division. “Biofuels provide a unique near-term opportunity to have a significant impact on reducing carbon intensity.”
BNSF and Wabtec will begin testing biofuel in the second quarter of this year. The two companies will demonstrate the performance of biodiesel (B20) and renewable diesel (R55) in revenue service on Wabtec Tier 3 and Tier 4 Evolution Series locomotives in California. BNSF will operate the locomotives between Barstow and Los Angeles, California.
“BNSF is pleased to partner with Wabtec to test higher percentage blends of biodiesel and renewable diesel,” said John Lovenburg, Vice President, Environment & Sustainability. “Rail is already the most carbon-efficient mode of land freight transport, and the use of these lower carbon fuels is another means for BNSF to reduce its emissions and help meet its carbon reduction goal. Wabtec continues to be a good innovation partner for us – last year, we piloted the first battery-electric freight locomotive in North America.”
Wabtec already has approved a 5-percent biodiesel (B5) and 30 percent renewable diesel (R30) blend for its locomotive engines. There currently are approximately 11,000 Evolutions Series engines in operations today with railroads around the world.
Biofuel is a domestically produced, clean-burning, renewable substitute for petroleum diesel. This renewable fuel increases energy security, improves air quality, and provides safety benefits.
Today’s announcement comes after BNSF conducted a pilot last year with a battery-electric locomotive developed by Wabtec in commercial service between Barstow and Stockton that showed an 11% reduction in fuel consumption and greenhouse gas emissions compared with standard diesel units operated on the same route.
Union Pacific has also announced that it will start testing B20 biodiesel and R55 renewable diesel on trains powered by Wabtec FDL locomotives operating in California.
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 Railway Company’s 2022 capital investment plan will be $3.55 billion. The amount is up markedly from the 2021 capital investment plan of $2.99 billion.
This year’s capital plan focuses on projects that support the company’s growth and efficiency objectives while maintaining a strong and reliable railroad.
“Every year through our capital plan, we work to ensure we are able to continue to operate a safe and efficient rail network, provide our customers with the level of service they have come to expect from BNSF as well as position ourselves for future growth opportunities,” said Katie Farmer, president and CEO.
The largest component of this year’s capital plan will be to replace and maintain BNSF’s core network and related assets. Maintaining the railroad results in less unscheduled service outages that can slow down the rail network and reduce capacity.
The maintenance component of this year’s plan is $2.71 billion. The projects included in this part of the plan mostly entail replacing and upgrading rail as well as track infrastructure like ballast and rail ties (which are the main components for the tracks on which BNSF trains operate) and maintaining its rolling stock. It will include nearly 14,000 miles of track surfacing and/or undercutting work and the replacement of 381 miles of rail and approximately 2.7 million rail ties.
$580 million of this year’s capital plan will be for expansion and efficiency projects to support the growth of our Consumer, Agricultural and Industrial Products customers’ businesses. On its Southern Transcon route between Southern California and the Midwest, BNSF will continue a multi-year effort to add several segments of new double-track in eastern Kansas and begin a multi-year effort to add a new segment of triple-track in California, both supporting traffic growth. In addition, BNSF will continue a multi-year bridge project near Sandpoint, Idaho, to increase train capacity in the Pacific Northwest. Finally, BNSF will continue or begin multi-year intermodal facility expansion projects in North Texas (Alliance) and Chicago (Cicero). In Southern California (San Bernardino), BNSF is undertaking various initiatives to improve the efficiency of its intermodal facility. $259 million of this year’s capital plan is for freight cars and other equipment acquisitions.
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 Railway Company has reported investments from customers served by the freight rail provider in 2021 totaled approximately $1.5 billion.
Large investments from customers including The Gatorade Company Inc., Mark Anthony Brewing and Northern Metal Recycling contributed to the sum. As a result of customer investments, BNSF projects the creation of more than 1,700 new jobs in local communities.
This marks the 11th consecutive year that BNSF customers and local economic development organizations have invested more than $1 billion in a calendar year for new or expanded facilities.
“The success of BNSF’s rail development program is a result of our employees working with our customers to build unique supply chain solutions that fit their distinctive needs,” said Chris Danos, assistant vice president, economic development. “Flexibility is the key to helping our customers maximize their investments, saving them development costs and expediting their speed to market.”
In 2021, new developments supported a wide variety of commodities including consumer, agricultural and industrial products in communities across the BNSF network. Highlights of supply chain solutions BNSF helped its customers achieve in 2021 include:
• The Gatorade Company, Inc. – With a significant investment, The Gatorade Company, Inc., co-located at BNSF’s Logistics Park Kansas City for warehouse and distribution center capabilities, generating 200 employment opportunities for surrounding communities.
• Mark Anthony Brewing – In Glendale, Arizona, Mark Anthony Brewing invested $450 million to build a new facility capable of receiving tank car shipments of glucose and alcohol to produce White Claw Hard Seltzer, creating 300 jobs.
• Northern Metal Recycling – Investing $75 million, Northern Metal Recycling constructed a new facility at the Becker Industrial Park in Becker, Minnesota, to handle both manifest and unit train shipments of scrap metals, offering 90 new roles for community members.
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.
A potential strike against BNSF Railway Company over a new point system for attendance has been temporarily blocked by a federal judge.
The threat of a strike by some 17,000 members of the Brotherhood of Locomotive Engineers and Trainmen, and the Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation had appeared imminent.
The U.S. District Court for the Northern District of Texas issued a Temporary Restraining Order (TRO) prohibiting both BLET and SMART-TD from authorizing, encouraging, permitting, calling, or otherwise engaging in any strikes, work stoppages, picketing, slowdowns, sickouts, or other self-help against BNSF or its operating rail subsidiaries over any dispute relating to BNSF’s new Hi Viz attendance policy and the standards in the policy.
The Brotherhood of Locomotive Engineers and Trainmen sent the following to its members:
Pursuant to the Court’s Order, BLET is hereby instructing all of its members employed by BNSF that they must NOT engage in any self-help against the railroad. This means that members must NOT engage in any strikes, work stoppages, picketing, slowdowns, sickouts, or any other activity intended to disrupt the operations of the railroad in response to BNSF’s Hi Viz attendance policy.
Further, pursuant to the Court’s Order, BLET is notifying and instructing all members who are now or who may in the future engage in any strike, work stoppages, picketing, slowdowns, sickouts, or any other activity intended to disrupt the operations of the railroad to immediately cease and desist all such activity and to immediately cease and desist all exhortations or communications encouraging same upon pain of fine, suspension, or other sanction by BLET. This means that any member who continues to encourage other employees on social media, or in any other forum, to engage in a strike, work stoppages, picketing, slowdowns, sickouts, or any other activity intended to disrupt the operations of the railroad MUST immediately stop doing so. Members who continue to do so risk fine, suspension, or other sanction by BLET.
The temporary restraining order is set to expire February 8, 2022.
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 Railway Company is taking over the route served by Montana Rail Link. MRL has had a lease on the track from BNSF since 1987.
Based in Missoula, Montana, Montana Rail Link (MRL) is a Class II regional railroad that operates over 900 route miles of track in Montana and Idaho and has nearly 1,200 employees.
MRL President Derek Ollmann announced the change in a memo to his employees where he detailed that BNSF will resume operation and maintenance of MRL, and will provide for the continued employment of all MRL employees.
“BNSF operating the line as part of their network will ensure competitive access to global markets while continuing to provide the consistent and reliable service for our customers,” Ollmann wrote in his letter to employees.
Ollmann noted that 90% of the volume on MRL was BNSF trains.
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.
Progress Rail, a Caterpillar Inc. Company, BNSF Railway Company and Chevron U.S.A. Inc., a subsidiary of Chevron Corporation have signed a memorandum of understanding (MOU) to advance the demonstration of a locomotive powered by hydrogen fuel cells.
The goal of the demonstration is to confirm the feasibility and performance of hydrogen fuel for use as a viable alternative to traditional fuels for line-haul rail. Hydrogen has the potential to play a significant role as a lower-carbon alternative to diesel fuel for transportation, with hydrogen fuel cells becoming a means to reduce emissions.
Under the MOU, the parties are working toward reaching definitive agreements on a demonstration with three primary objectives. First, Progress Rail plans to design and build a prototype hydrogen fuel cell locomotive for line-haul and/or other types of rail service. Second, Chevron expects to develop the fueling concept and infrastructure to support this use of the locomotive. Lastly, the prototype hydrogen fuel cell locomotive is expected to be demonstrated on BNSF’s lines for a mutually agreed upon period of time.
“Caterpillar has made great strides in moving our advanced power technology forward. Our Progress Rail team will leverage that knowledge and experience toward a hydrogen fuel cell locomotive,” said Joe Creed, Caterpillar group president of Energy and Transportation. “Working with Chevron and BNSF will allow us to advance hydrogen technology across the industry.”
“BNSF is pleased to collaborate with Chevron and Progress Rail in piloting locomotives powered by hydrogen fuel cells,” commented John Lovenburg, vice president of Environmental for BNSF. “This technology could one day be a lower-carbon solution for line-haul service, as it has the potential to reduce carbon emissions and remain cost competitive.”
“Chevron is dedicated to scaling up its hydrogen business to help meet the needs of customers who want to reduce the lifecycle carbon emissions of their operations,” said Jeff Gustavson, president of Chevron New Energies. “Our work with Progress Rail and BNSF is an important step toward advancing new use cases for hydrogen in heavy duty transport, as we seek to create a commercially viable hydrogen economy.”
As previously announced, Caterpillar Inc. is collaborating with Chevron for the demonstration of hydrogen projects in transportation and stationary power applications.
The proposed demonstration project is subject to the negotiation of definitive agreements with customary closing conditions, including regulatory approval. If established, additional details about the hydrogen locomotive demonstration, including where the initial pilot will take place and its timing, will be released at a later date.
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 Railway and other railroads could save as much as 30 percent on fuel costs and greenhouse gas emissions for an entire train when a new generation of lithium-ion battery-powered locomotives go into commercial service.
Wabtec Corporation’s pilot of its first generation FLXdrive battery-electric locomotive delivered more than an 11 percent average reduction in fuel consumption and greenhouse gas emissions for an entire train. It is the equivalent of over 6,200 gallons of diesel fuel saved and approximately 69 tons of CO2 emissions reduced.
The outcomes are the result of a three-month pilot with BNSF Railway, the largest railroad in the U.S., where the FLXdrive, the world’s first 100-percent battery locomotive, was put to the test in revenue service across more than 13,320 miles of hilly terrain in San Joaquin Valley, California – a territory surrounded by mountains. The region is classified as a non-attainment area, where the air quality is worse than the National Ambient Air Quality Standards.
Wabtec’s next step is to build a second-generation locomotive with a battery capacity of more than 6 megawatt hours – a level of energy that can reduce a locomotive consist’s fuel consumption and carbon emissions by up to 30 percent, even while hauling several thousand tons of freight in a mile-long train.
“The FLXdrive battery-electric locomotive is a defining moment for freight rail and will accelerate the industry toward low- to zero-emission locomotives,” said Eric Gebhardt, Wabtec Chief Technology Officer. “It builds upon the rail industry’s position as the most efficient and sustainable mode of transportation. Building on our long history of pioneering train energy management technologies, this demonstration of coupling 2.4 megawatt hours of battery storage into the mix fully validated our assumptions for the potential for this next generation technology to further drive efficiencies and greenhouse gas reductions. At more than 6 megawatt hours, Wabtec’s next version of FLXdrive technology will have an opportunity to reduce fuel consumption and emissions by up to 30 percent – putting the industry on the cusp of a once-in-a-generation improvement in energy savings and emission reductions.”
The California pilot program was part of a $22.6 million grant from the California Air Resource Board awarded to Wabtec, BNSF and the San Joaquin Valley Air Pollution Control District. The 430,000-pound FLXdrive in the pilot boasts 18,000 lithium-ion battery cells. The battery locomotive charged at the rail yard and recharged during the trip through regenerative braking. The FLXdrive manages the overall train energy flow and distribution through its Trip Optimizer system, an intelligent cruise control system programmed through artificial intelligence to respond to every twist and grade of the track in the most energy-efficient way possible.
A fleet of second-generation FLXdrives could enter supply chain routes in the next few years.
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