Posts Tagged ‘railroad capital budgets’

Class 1 Capital Budgets Are Mixed Bag

February 15, 2018

North America’s Class 1 Railroads have varying plans for capital spending in 2018.

At one extreme, Canadian National plans spend a record $C3.2 billion for capital spending, which includes laying new track and buying new locomotives.

That is an increase of C$500 million over what CN spent last year.

On the other extreme are CSX and Kansas City Southern, both of which have cut their capital spending budget.

Compared with its peers, CSX is taking a meat axe to its capital budget, slashing it by $400 million to $1.6 billion for the year.

KCS is reducing its capital budget by $30 million and will spend between $530 million and $550 million.

Union Pacific and Norfolk Southern are planning to increase their capital spending while BNSF and Canadian Pacific have announced flat capital budget.

NS will spend an additional $100 million on a $1.8 billion capital budget while UP is increasing capital spending by $200 million to $3.3 billion.

The BNSF 2018 capital budget is $3.3 billion while CP will spend between C$1.45 billion and C$1.5 billion.

CN plans to spend C$1.6 billion on track and other infrastructure, including replacing 2.1 million ties and more than 600 miles of rail.

It also plans to plunk down C$400 million on equipment acquisitions, including 60 high-horsepower locomotives as part of a three-year, 200-unit order from GE.

At NS, track maintenance projects are budgeted at $930 million this year while it will spend $345 million for locomotives and $50 million for cars.

“Locomotive capital will be focused on the rebuild and conversion of locomotives from DC to AC power,” said NS Executive Vice President and Chief Operating Officer Cynthia Earhart.

With CSX mothballing numerous locomotives and freight cars, it sees no need to acquire new equipment.

KCS said its capital budget is down largely because it won’t be buying any locomotives.

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5 Class 1 RRs to Cut 2017 Capital Spending

January 28, 2017

Five of North America’s seven Class 1 railroads plan to spend less in 2017 on capital spending than they did last year.

train image2Norfolk Southern’s capital budget will remain static at $1.9 billion while at CSX capital spending will fall from $2.7 billion to $2.2 billion.

The NS budget includes $930 million for track maintenance, $290 million for locomotives, $240 million for positive train control, $170 million for facilities and terminals, $110 million for technology and similar initiatives, $80 million for infrastructure, and $50 million for freight cars.

The CSX budget figures include $307 million in payments for locomotives that were purchased under seller financing and delivered in 2015.

In 2017 equipment investments are significantly less due to the completion of locomotive purchases.

Canadian Pacific plans to spend C$1.25, an increase of 6 percent from the 2016 budget with around 70 percent of that earmarked for basic replacement and maintenance of way work

Union Pacific has cut its capital budget by 11 percent compared with 2016. The western freight hauler plans to spend $3.1 billion, compared with $3.5 billion last year.

BNSF is cutting capital spending by 13 percent from $3.9 billion to $3.4 billion, saying it has invested a lot of capital in network improvements and growth during the past several years.

At Canadian National, capital spending for 2017 has been set at C$2.9 billion of which C$1.6 billion is for for basic track infrastructure work.

Kansas City Southern has slashed capital spending by about $30 million and expects to spend between $550 million to $560 million in 2017.