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Researched by Industrial Info Resources (Sugar Land, Texas)--In March, the American Association of Railroads announced the industry was likely to spend a record amount this year on infrastructure and equipment as freight rail traffic approached pre-recession levels. Since then, at least two major U.S. railways indicated they would either trim or take a serious look at their planned capital expenditures (capex) in light of lower-than-expected revenues. For fourth-quarter 2015, Industrial Info is tracking 10 kickoffs for U.S. freight rail-related projects with a combined worth of $691 million.
The AAR said in March the industry was likely to spend $29 billion this year on network maintenance and expansions. BNSF, a subsidiary of Berkshire Hathaway (NYSE:BRK.A) (Omaha, Nebraska), has said it planned $6 billion in capital expenditures for the year, up from $5.5 billion in 2014. For related information, see March 12, 2015, article - American Association of Railroads: Freight Carriers Gear Up for Rising Traffic Load.
However, executives with Norfolk Southern Corporation (NYSE:NSC) (Norfolk, Virginia) said in July the freight railway would trim its planned 2015 capital expenditures by about 5% as a result of lower earnings. The railway had earlier planned $2.4 billion in capex for 2015. For related information, see July 28, 2015, article - Earnings Drop Forces Norfolk Southern Railway to Trim 2015 Capex by $130 Million.
Likewise, eastern U.S. railway CSX Corporation (NYSE:CSX) (Jacksonville, Florida), which had targeted $2.5 billion in capital expenses, has since indicated it would "really be looking long and hard" at its capital spending next year due to a sharp drop in coal shipments, according to Chief Financial Officer Fredrik Elliason. For related information, see June 16, 2015, article - CSX Railway: Third-Quarter Domestic Coal Shipments to Continue to Fall.
Industrial Info is tracking fourth-quarter kickoffs for eight active U.S. railroad and line-haul operating projects worth $289 million, and two freight-related switching and terminal projects worth nearly $402 million. Four of the projects, worth nearly $123 million, are in the engineering phases, and six projects, worth $568 million, are in the planning phases, where plenty of factors could increase, decrease or eliminate the expected spending.
Union Pacific Corporation (NYSE:UNP) (Omaha, Nebraska) and HDR Engineering Incorporated (Omaha, Nebraska) are conducting the detailed design of the $400 million rail switching and classification yard in Hearne, Texas. The rail yard would allow Union Pacific to sort cars where seven of its lines cross, serving the Houston, Dallas, Austin and San Antonio areas, as well as spots along the Gulf of Mexico and throughout eastern Texas. Construction kickoff has been pushed back to December 2015 from the third quarter. Completion is still set for first-quarter 2017. For details on this construction project, see Industrial Info's project report.
Norfolk Southern's $70 million project to replace the Portageville Freight Rail Bridge in New York is also slated for a fourth-quarter kickoff. The project involves building 963 feet of bridge sections, l-beams and other components. Modjeski and Masters (Harrisburg, Pennsylvania) is performing design-engineering services, and the New York State Department of Environmental Conservation (Albany, New York) is serving as a consultant. Completion is set for the end of 2017. For details on this construction project, see Industrial Info's project report.
Kickoff was pushed back to the fourth quarter from the third quarter for a $70 million crude-by-rail terminal project by Questar Corporation (Salt Lake City, Utah), located in Cabazon, California. Questar awarded the engineering, construction contract to Harris Group (Seattle, Washington) The project is accompanied by the recommissioning of a 96-mile pipeline to move 120,000 barrels per day (BBL/d) to Los Angeles-area refineries. Completion is now set for fourth-quarter 2016; the pipeline is a joint venture with Spectra Energy (NYSE:SE) (Houston, Texas). For details on this construction project, see Industrial Info's project report.
Listed below is a brief summary of other U.S. freight rail-related projects with fourth-quarter kickoffs:
The AAR said in March the industry was likely to spend $29 billion this year on network maintenance and expansions. BNSF, a subsidiary of Berkshire Hathaway (NYSE:BRK.A) (Omaha, Nebraska), has said it planned $6 billion in capital expenditures for the year, up from $5.5 billion in 2014. For related information, see March 12, 2015, article - American Association of Railroads: Freight Carriers Gear Up for Rising Traffic Load.
However, executives with Norfolk Southern Corporation (NYSE:NSC) (Norfolk, Virginia) said in July the freight railway would trim its planned 2015 capital expenditures by about 5% as a result of lower earnings. The railway had earlier planned $2.4 billion in capex for 2015. For related information, see July 28, 2015, article - Earnings Drop Forces Norfolk Southern Railway to Trim 2015 Capex by $130 Million.
Likewise, eastern U.S. railway CSX Corporation (NYSE:CSX) (Jacksonville, Florida), which had targeted $2.5 billion in capital expenses, has since indicated it would "really be looking long and hard" at its capital spending next year due to a sharp drop in coal shipments, according to Chief Financial Officer Fredrik Elliason. For related information, see June 16, 2015, article - CSX Railway: Third-Quarter Domestic Coal Shipments to Continue to Fall.
Industrial Info is tracking fourth-quarter kickoffs for eight active U.S. railroad and line-haul operating projects worth $289 million, and two freight-related switching and terminal projects worth nearly $402 million. Four of the projects, worth nearly $123 million, are in the engineering phases, and six projects, worth $568 million, are in the planning phases, where plenty of factors could increase, decrease or eliminate the expected spending.
Union Pacific Corporation (NYSE:UNP) (Omaha, Nebraska) and HDR Engineering Incorporated (Omaha, Nebraska) are conducting the detailed design of the $400 million rail switching and classification yard in Hearne, Texas. The rail yard would allow Union Pacific to sort cars where seven of its lines cross, serving the Houston, Dallas, Austin and San Antonio areas, as well as spots along the Gulf of Mexico and throughout eastern Texas. Construction kickoff has been pushed back to December 2015 from the third quarter. Completion is still set for first-quarter 2017. For details on this construction project, see Industrial Info's project report.
Norfolk Southern's $70 million project to replace the Portageville Freight Rail Bridge in New York is also slated for a fourth-quarter kickoff. The project involves building 963 feet of bridge sections, l-beams and other components. Modjeski and Masters (Harrisburg, Pennsylvania) is performing design-engineering services, and the New York State Department of Environmental Conservation (Albany, New York) is serving as a consultant. Completion is set for the end of 2017. For details on this construction project, see Industrial Info's project report.
Kickoff was pushed back to the fourth quarter from the third quarter for a $70 million crude-by-rail terminal project by Questar Corporation (Salt Lake City, Utah), located in Cabazon, California. Questar awarded the engineering, construction contract to Harris Group (Seattle, Washington) The project is accompanied by the recommissioning of a 96-mile pipeline to move 120,000 barrels per day (BBL/d) to Los Angeles-area refineries. Completion is now set for fourth-quarter 2016; the pipeline is a joint venture with Spectra Energy (NYSE:SE) (Houston, Texas). For details on this construction project, see Industrial Info's project report.
Listed below is a brief summary of other U.S. freight rail-related projects with fourth-quarter kickoffs:
- $65 Million: Kansas City Southern Railways' Unit Train Crude Oil Terminal, Port Arthur, Texas
For details on this construction project, see Industrial Info's project report. - $50 Million: SBG Energy Services LLC's Crude and Manifest Terminal in Richardton, North Dakota
For details on this construction project, see Industrial Info's project report. - $30 Million: Savage Services Corporation's Crude Oil Rail Unloading Terminal Expansion in Vancouver, Washington
For details on this construction project, see Industrial Info's project report. - $2 Million: North Carolina Railroad's Track Expansion in Thomasville, North Carolina
For details on this construction project, see Industrial Info's project report. - $1.6 Million: Genesee & Wyoming Incorporated's Short-Line Rail Terminal Track Addition and Improvement in Wilmington, North Carolina
For details on this construction project, see Industrial Info's project report. - $1 Million: Clean Harbors' Waste Treatment Plant Rail Unloading Addition in LaPorte, Texas
For details on this construction project, see Industrial Info's project report. - $1 Million: Macquarie Infrastructure Company LLC's Avondale Vegetable & Natural Oils Chemical Terminal Rail Spur Modifications in Westwego, Louisiana
For details on this construction project, see Industrial Info's project report.
