|
BNSF Railway intends to reduce capital expenditures for the first time in six years as railroads seek to lower costs amid a freight slump.
The rail company said that it will spend $4.3 billion, down 26 percent from a record $5.8 billion in 2015, on locomotives, rail cars, track and maintenance. BNSF had increased investment since 2010, which marked a six-year low of $2.7 billion.
The railroad joins Union Pacific., CSX Corp. and Kansas City Southern in lowering spending amid a drop in carloads, led by weakened coal demand. Total traffic for large U.S. railroads fell 2.5 percent last year and the declines have continued into the first two weeks of 2016, according to the Association of American Railroads.
BNSF, the largest North American railroad by carloads, came under fire from customers and regulators in 2014 after surging crude-oil cargo, a record grain harvest and harsh winter conditions caused service to decline. In reaction, the railroad pumped up spending by almost 50 percent to
|
$11.3 billion in 2014 through 2015 from the previous two years.
The investment has paid off. BNSF’s train speeds have recovered and the railroad has added new express routes. BNSF’s total traffic fell 0.1 percent last year, compared with a 5.9 percent decline for Union Pacific and 4.9 percent for Kansas City Southern’s U.S. operations, according to AAR data.
|
