BNSF, Berkshire Hathaway’s privately held railroad company, will continue to invest billions of dollars in added capacity and new railcars to resolve service problems that plagued the grain industry in 2014, according to Greg Guthrie, director of ag products for BNSF.
During a workshop at the American Farm Bureau Federation’s 96th Annual Convention and IDEAg Trade Show, Guthrie updated attendees on a $5 billion capital investment plan the company announced at the beginning of 2014.
While the grain shipments represent only 9% to 10% of BNSF’s total business, Guthrie called the grain industry one of BNSF’s oldest and most valued customers.
“From a railroad perspective, grain has been an inherent and significant part of our DNA,” said Guthrie. “Do you really think we don’t want to haul grain? We keep hearing ‘you want to haul oil, not grain.’ We want to haul everything, and we’re going do whatever we can to handle that growth because in business if you’re not growing, you’re dying.”
BNSF’s North Region has experienced the most rapid growth in recent years. It is the corridor used to move agriculture and coal to export facilities in the Pacific Northwest, petroleum products produced in the region that are destined for refinery facilities, and for consumer products shipped to and from marine ports in the Pacific Northwest. The North Region is also a destination point for materials that support the production of crude oil in the Bakken shale formation.
“Our growth [last year] was double the GDP, and we woke up one day and realized that we took on 50% of all the railroad growth in the United States in one year,” Guthrie said.
An unintended result of this growth was a dramatic spike in the cost to reserve railcars. Guthrie said BNSF is adding more grain hopper cars to the pipeline, which will allow the market to decide a fair price for cars.
“I’ve spent a lot of time over the last six months explaining why [these prices] are not the new normal and we won’t allow this to continue,” Guthrie said. “Our commitment is to adding capacity and giving you the service you deserve.”
In closing, Guthrie asked grain shippers to work closely with railroad companies to resolve operating issues.
BNSF’s North Region Projects
In January 2015, BNSF announced that it will invest approximately $1.5 billion in its North Region across eight states for engineering maintenance and line expansion projects, of which approximately $700 million is planned for projects to expand the rail lines and Positive Train Control (PTC) in that region.
The North Region includes: Illinois, Minnesota, Montana, North Dakota, Oregon, South Dakota, Washington and Wisconsin.
Expansion Project Highlights:
-
Continue to install double track on the Glasgow subdivision between Minot, ND, and Snowden, MT, located in the far western part of the state.
-
Extend the siding on the Dickinson subdivision located between Mandan, ND, and Glendive, MT, and expand the terminal at the Dickinson yard to accommodate expected growth in single car volumes.
-
Convert the entire Devils Lake subdivision, located between Minot, ND, and Grand Forks, ND, to centralized train control, which will improve capacity for freight operation.
-
Complete implementation of centralized train control on the Hillsboro subdivision, located in eastern North Dakota. Upgrade connection track between the Hillsboro subdivision and the Devils Lake subdivision to permit faster train speeds.
