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Researched by Industrial Info Resources (Sugar Land, Texas)--CSX Corporation (NASDAQ:CSX) (Jacksonville, Florida) plans to reduce capital expenditures by 20% through 2020 as part of its strategy to increase free cash flow, executives with the eastern U.S. freight rail carrier said last week. However, other railways, such as Norfolk Southern Corporation (NYSE:NSC) (Norfolk, Virginia) and Union Pacific Corporation (NYSE:UNP) (Omaha, Nebraska), are targeting spending increases for this year
In its March 1 investor presentation, CSX said capital expenditures will average $1.6 billion for 2018 through 2020, compared with $2.0 billion in 2017 and $2.7 billion in 2016.
CSX said it would continue to prioritize investments for safety and reliability, and that infrastructure investments would remain steady through 2020 while it evaluates return-based strategic projects to promote growth. CSX said it will replace 470 miles of railway in 2018, up from 456 miles replaced in 2017.
At the same time, the railway will nearly eliminate spending for new locomotives through at least 2020 as part of its drive to improve free cash flow, CSX said.
Also, the railway's investments in Positive Train Control (PTC) - federally-mandated technologies designed to make freight rail transportation safer by automatically stopping a train before certain types of accidents can occur - are expected to wind down as the project progresses toward completion. The annual PTC investments should be $100 million or less by 2019-2020, CSX said. The railway's total PTC investment is expected to be $2.4 billion, with $2.0 billion spent to date.
CSX said it is targeting a 60% operating ratio (operating expenses as a percentage of revenue) in 2020, down from a ratio of 66.3% in 2017. The railway plans to cut the size of its workforce 22% from 27,200 in 2017 to 21,000 by the end of 2020.
Industrial Info is tracking a potential of $355 million in CSX project activity.
2018 Capex Plans by Norfolk Southern and Others
Norfolk Southern, meanwhile, plans to invest $1.8 billion in capital expenditures for 2018, up from $1.7 billion in 2017. Last year's investments ranged from sidings to better support network fluidity, to terminal expansions to better accommodate volume growth, to roadway infrastructure supporting regional competitiveness, the railway said. The railway cited its investment in the $70 million Portageville Bridge Replacement in Buffalo, New York. Norfolk Southern's railway subsidiary operates 19,500 route miles in 22 states and the District of Columbia, and serves major container ports in the eastern U.S.
Union Pacific Corporation, which operates in 23 states in the western two-thirds of the country, is targeting $3.3 billion in capital expenditures this year, up from $3.1 billion in 2017. About 70% of the 2018 capital investment is earmarked for replacement spending to harden infrastructure, replace assets and improve network safety and resiliency, Union Pacific officials said in January. The 2018 capital program also includes about 60 new locomotives.
Also in January, Union Pacific announced construction had begun on its Brazos railyard in Robertson, Texas. The $550 million railyard represents the largest capital investment in a single facility in the company's history, Union Pacific said. The railyard will have the capacity to switch up to 1,300 rail cars per day.
On the other hand, BNSF Railway (Fort Worth, Texas), a subsidiary of Berkshire Hathaway Incorporated (NYSE:BRKA) (Omaha, Nebraska), says it will invest $3.3 billion in capital expenditures this year, down from $3.4 billion in 2017. This year's maintenance component will amount to $2.4 billion. BNSF operates in 28 states and three Canadian provinces.
Canadian Pacific Railway Limited (NYSE:CP) (Calgary, Alberta) said in January it plans to invest between C$1.35 billion (US$1 billion) to C$1.5 billion (US$1.2 billion) in capital expenditures in 2018.
Canadian National Railway's (NYSE:CNI) (CN) (Montreal, Quebec) planned capital program for this year totals C$3.2 billion (US$2.5 billion), including C$1.6 billion (US$1.2 billion) for track and railway infrastructure maintenance. About C$400 million (US$308 million) is expected to be spent on equipment, including the acquisition new locomotives. A further C$800 million (US$616 million) is targeted at capacity and growth initiatives, such as track infrastructure expansion, investments in yards and in intermodal terminals, according to the railway. Industrial Info is tracking CN's intermodal and logistics hub project in Milton, Ontario. The hub would serve four trains per day, and handle 350,000 containers per year. Kick-off is expected in mid-2019.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
In its March 1 investor presentation, CSX said capital expenditures will average $1.6 billion for 2018 through 2020, compared with $2.0 billion in 2017 and $2.7 billion in 2016.
CSX said it would continue to prioritize investments for safety and reliability, and that infrastructure investments would remain steady through 2020 while it evaluates return-based strategic projects to promote growth. CSX said it will replace 470 miles of railway in 2018, up from 456 miles replaced in 2017.
At the same time, the railway will nearly eliminate spending for new locomotives through at least 2020 as part of its drive to improve free cash flow, CSX said.
Also, the railway's investments in Positive Train Control (PTC) - federally-mandated technologies designed to make freight rail transportation safer by automatically stopping a train before certain types of accidents can occur - are expected to wind down as the project progresses toward completion. The annual PTC investments should be $100 million or less by 2019-2020, CSX said. The railway's total PTC investment is expected to be $2.4 billion, with $2.0 billion spent to date.
CSX said it is targeting a 60% operating ratio (operating expenses as a percentage of revenue) in 2020, down from a ratio of 66.3% in 2017. The railway plans to cut the size of its workforce 22% from 27,200 in 2017 to 21,000 by the end of 2020.
Industrial Info is tracking a potential of $355 million in CSX project activity.
2018 Capex Plans by Norfolk Southern and Others
Norfolk Southern, meanwhile, plans to invest $1.8 billion in capital expenditures for 2018, up from $1.7 billion in 2017. Last year's investments ranged from sidings to better support network fluidity, to terminal expansions to better accommodate volume growth, to roadway infrastructure supporting regional competitiveness, the railway said. The railway cited its investment in the $70 million Portageville Bridge Replacement in Buffalo, New York. Norfolk Southern's railway subsidiary operates 19,500 route miles in 22 states and the District of Columbia, and serves major container ports in the eastern U.S.
Union Pacific Corporation, which operates in 23 states in the western two-thirds of the country, is targeting $3.3 billion in capital expenditures this year, up from $3.1 billion in 2017. About 70% of the 2018 capital investment is earmarked for replacement spending to harden infrastructure, replace assets and improve network safety and resiliency, Union Pacific officials said in January. The 2018 capital program also includes about 60 new locomotives.
Also in January, Union Pacific announced construction had begun on its Brazos railyard in Robertson, Texas. The $550 million railyard represents the largest capital investment in a single facility in the company's history, Union Pacific said. The railyard will have the capacity to switch up to 1,300 rail cars per day.
On the other hand, BNSF Railway (Fort Worth, Texas), a subsidiary of Berkshire Hathaway Incorporated (NYSE:BRKA) (Omaha, Nebraska), says it will invest $3.3 billion in capital expenditures this year, down from $3.4 billion in 2017. This year's maintenance component will amount to $2.4 billion. BNSF operates in 28 states and three Canadian provinces.
Canadian Pacific Railway Limited (NYSE:CP) (Calgary, Alberta) said in January it plans to invest between C$1.35 billion (US$1 billion) to C$1.5 billion (US$1.2 billion) in capital expenditures in 2018.
Canadian National Railway's (NYSE:CNI) (CN) (Montreal, Quebec) planned capital program for this year totals C$3.2 billion (US$2.5 billion), including C$1.6 billion (US$1.2 billion) for track and railway infrastructure maintenance. About C$400 million (US$308 million) is expected to be spent on equipment, including the acquisition new locomotives. A further C$800 million (US$616 million) is targeted at capacity and growth initiatives, such as track infrastructure expansion, investments in yards and in intermodal terminals, according to the railway. Industrial Info is tracking CN's intermodal and logistics hub project in Milton, Ontario. The hub would serve four trains per day, and handle 350,000 containers per year. Kick-off is expected in mid-2019.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
