Western Railroad Discussion > BNSF Colton Project

This sign has been posted on the entrance to the former CalPortland property at the east dead-end of Slover Avenue, just east of Pepper Avenue. This is the land that BNSF is currently engaged in discussions with SCAQMD (South Coast Air Quality Management District) and the public for a new intermodal terminal. This is land that was first presented to Union Pacific in 2011 for consideration: UP did not bite. At the time the land was selling for about 1/3 the current prices in the area.  Access for UP (I've previously posted a plan pitched to UP) was between Pepper and Rancho.  

Good move by BNSF! Business as usual for UP...

Bruce 

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Will this mean parking on Pepper Ave over the UP West Colton yard might be curtailed, due to all the new truck traffic an Intermodal yard will bring?

Valleyman

Valleyman Wrote:
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> Will this mean parking on Pepper Ave over the UP
> West Colton yard might be curtailed, due to all
> the new truck traffic an Intermodal yard will
> bring?

I believe they probably would have to replace the Pepper Ave overpass with a four-lane structure if this terminal is constructed.  The current bridge is not really up to the task of handling all that traffic.  What that means for railfanning would depend entirely on the design but it "must" help by providing sidewalks, which the current bridge is sorely lacking.

I just can't understand the mindset of UP management.  Are they brain dead or something??  Can't they see the future or plan for it??

UP has a big yard there, they just need to determine it's future use. There's still no cleat future for carload traffic
especially if West Colton is reconfigured. All that seems a bit odd as the RVWC manifests keep growing, the number
of trains keeps increasing, you'd think someone would be planning.

Out 

coach Wrote:
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> I just can't understand the mindset of UP
> management.  Are they brain dead or something??
>  Can't they see the future or plan for it??

They may think that overcoming the local opposition may not be worth the hassle.
The locals are very vocal about all the particulate pollution from all the diesel powered trains and trucks in the area now and a big new project here will face some serious opposition.

BNSF sign makes sense - I have heard that possibly two switches would lead off of the BNSF main at Fogg St. going west into the old Portland property, x-Mount Slover. There would be a rail yard for future use by California High Speed Rail as they build between LA and San Diego. Not joking.

coach Wrote:
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> I just can't understand the mindset of UP
> management.  Are they brain dead or something??
>  Can't they see the future or plan for it??

Lack of forward vision in the rail industry is legendary.  See the Pennsylvannia Railroad mid-century.  Omaha apparently cannot not see how such a project will result in higher revenues and profits.  

Nick Tharalson,
Marion, IA

ntharalson Wrote:
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> ... Omaha apparently cannot not see how
> such a project will result in higher revenues and
> profits.  [in the next few quarters!]
>
> Nick Tharalson,
> Marion, IA

mapboy

There is a lack of vision in the rail industry's future because the current regime could care less if we have a railroad industry at all in 10 years.  As long as they can extract as much money per quarter now out of the industry to enrich themselves, screw the future.  They will move on to bigger and better carcasses to pick clean by the time the consequences come to pass......That is the mentality of the rail industry and has been for quite some time.

HogheadMike Wrote:
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> There is a lack of vision in the rail industry's
> future because the current regime could care less
> if we have a railroad industry at all in 10
> years.  As long as they can extract as much money
> per quarter now out of the industry to enrich
> themselves, screw the future.  They will move on
> to bigger and better carcasses to pick clean by
> the time the consequences come to pass......That
> is the mentality of the rail industry and has been
> for quite some time.

And I don't think that mentality is limited to just railroads.

Nathan

Maybe I'm confused . . .If railroads are not planning for the future, why did BNSF expand their intermodal operations in San Bernardino, and the traffic tripled or more...and the BNSF bought the land at Slover to expand even further...and the UP is building an intermodal terminal at Colton now....and BNSF built a third main line 25 miles from San Bdno to Summit and is ready to start toward Barstow....BNSF wanted to build a container facility at LA Harbor but was denied permission....in short, I am tired of the outrageous negativity by some on train orders and other sites.  Both railroads are trying to plan for the future, and with limited capital and no government funding to speak of, they seem to be pointed in the right direction.  perhaps we should congratulate the rail carriers when they make major moves like those above.

Norm
 

Norman Orfall
Helendale, CA
TIOGA PASS, a private railcar

aronco Wrote:
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> Maybe I'm confused . . .If railroads are not
> planning for the future, why did BNSF expand their
> intermodal operations in San Bernardino, and the
> traffic tripled or more...and the BNSF bought the
> land at Slover to expand even further...and the UP
> is building an intermodal terminal at Colton
> now....and BNSF built a third main line 25 miles
> from San Bdno to Summit and is ready to start
> toward Barstow....BNSF wanted to build a container
> facility at LA Harbor but was denied
> permission....in short, I am tired of the
> outrageous negativity by some on train orders and
> other sites.  Both railroads are trying to plan
> for the future, and with limited capital and no
> government funding to speak of, they seem to be
> pointed in the right direction.  perhaps we
> should congratulate the rail carriers when they
> make major moves like those above.

You're describing betterments on the BNSF, what about the other 3? (Converting a manifest yard to intermodal doesn't necessarily count.) I think we know why BNSF has the freedom to aggressively plan for the future, while the others do not.

As for limited capital, how does one explain the share buybacks of the other 3?

You forgot to include the Truxton flyover. 

Norm,
 
You are correct in that the railroads have no government funding (of any significance) as opposed to OTR trucking (and even inland barge traffic). But put in perspective what they’ve done relative to stock buybacks that have primarily benefited large investments funds (who own the majority of UP stock) while doing nothing for UP’s modernization and growth. UP has a strategy of short-term rewarding of stockholders through the buybacks that is inconsistent with a growth-focused company. See comments by SGillings on this post:

https://www.trainorders.com/discussion/read.php?1,5442806,5443406#msg-5443406
 
In 2021 UP bought back $7.3 billion of stock, financed mainly through debt (burdening the company long-term). It spent +/- $3 billion on capital expenditures. Of that, roughly 10% - +/- $300 million – was on growth/expansion and modernization of plant. So UP spent roughly 24 times the $ on stock buybacks that they did on their “growth” strategy. Projections for added stock buybacks show a continued strategy of this, financed mainly with debt.
 
What if UP had spent $4 billion in 2021 on capital expenditures, and made the growth and modernization portion $1 billion instead of $300 million, and reduced stock buybacks from $7.3 billion to $6.6 billion? And let’s say they did that with debt: at least that debt would be going towards the future of the railroad, rather than short-term investment funds who add nothing of long-term value to the railroad. Imagine that strategy having been in place over a 5-year period? What would have been the net impact on UP capacity and modernization? Increased velocity = lowered operating costs? Increased capacity = larger market share? The ability to deliver = sustainable pricing power with growth vs. the current pricing power driving away traffic (see carload reports for UP year-over-year).
 
Some of the complaints against the railroads are just normal complaining. But many are justified if the industry is to remain viable in the long run.
 
Bruce
 



Edited 1 time(s). Last edit at 05/12/22 09:40 by StStephen.