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Date: 05/24/23 00:17
Capital Budgets
Author: funnelfan

Earlier today I was looking at the Progressive Railroading magazine, specifically the MOW Spending article. They outline the capital budgets of the big 4 class 1 railroads. BNSF is clearly investing in growth of it system and the future. BNSF's MOW capital budget of nearly $4billion was twice that of UP, over three times NS, and over four times that of CSX. Among the major projects they listed the triple tracking Needles to Goffs, CA and the double tracking Irving to Otis Orchards east of Spokane that includes the new Spokane River Bridge. They also listed the construction of a siding near Pasco, WA. I'm not familiar with that project. Does anyone know where that siding will be?  Similarly UP listed projects to increase train lengths in the PNW. Does anyone know where UP is increasing siding lengths here in the PNW?

Ted Curphey
Ontario, OR



Date: 05/24/23 00:56
Re: Capital Budgets
Author: coach

You know, with the endless projects to increase siding lengths, due to management's endless desire for longer and longer and longer trains, requiring new additional work for even longer sidings...............pretty soon we'll have double-track everywhere!



Date: 05/24/23 06:32
Re: Capital Budgets
Author: ns1000

Just expanding the parking lot. It DOESN'T fix the inability to move trains...

As already stated, we are supposedly in an "economic slowdown". August should be fun....

Posted from Android



Date: 05/24/23 06:54
Re: Capital Budgets
Author: MP555

funnelfan Wrote:
-------------------------------------------------------
> They also listed the construction of
> a siding near Pasco, WA. I'm not familiar with
> that project. Does anyone know where that siding
> will be?

The BNSF "siding" project is on the Fallbridge Subdivision just east of Plymouth WA.  It will be between MP 194.6 and MP 198.6 and include a universal crossover in the middle.



Date: 05/24/23 06:58
Re: Capital Budgets
Author: NYSWSD70M

funnelfan Wrote:
-------------------------------------------------------
> Earlier today I was looking at the Progressive
> Railroading magazine, specifically the MOW
> Spending article. They outline the capital budgets
> of the big 4 class 1 railroads. BNSF is clearly
> investing in growth of it system and the future.
> BNSF's MOW capital budget of nearly $4billion was
> twice that of UP, over three times NS, and over
> four times that of CSX. Among the major projects
> they listed the triple tracking Needles to Goffs,
> CA and the double tracking Irving to Otis Orchards
> east of Spokane that includes the new Spokane
> River Bridge. They also listed the construction of
> a siding near Pasco, WA. I'm not familiar with
> that project. Does anyone know where that siding
> will be?  Similarly UP listed projects to
> increase train lengths in the PNW. Does anyone
> know where UP is increasing siding lengths here in
> the PNW?

The comparison to UP is quite valid.  That having been said, comparing BNSF to CSX and NS is a bit misleading given the different sizes of the systems..

Then again, who knows where Asia imports are heading.  Things in China certainly don't look good.



Date: 05/24/23 07:29
Re: Capital Budgets
Author: Lackawanna484

Capital budgeting often has an element of hope in it.  You're identifying and setting aside funding for something that may not begin construction for a few years. And may not be ready for use for a decade.  Many things may change in the meantime. The Brazos yard is an example.

One item a lot of folks are watching is Chinese direct investment in Mexican factories and assembly plants. It has been rising significantly in the past few years.  With NAFTA 2.0 and strong Mexican government support, "friend shoring" in Mexico may be set for a huge jump in output to the US and Canada in the next few years.  UP, BNSF, and CPKC better be ready,,,



Date: 05/24/23 09:15
Re: Capital Budgets
Author: wyeth

Lackawanna484 Wrote:
-------------------------------------------------------
> One item a lot of folks are watching is Chinese
> direct investment in Mexican factories and
> assembly plants. It has been rising significantly
> in the past few years.  With NAFTA 2.0 and strong
> Mexican government support, "friend shoring" in
> Mexico may be set for a huge jump in output to the
> US and Canada in the next few years.  UP, BNSF,
> and CPKC better be ready,,,

Off the immediate topic, but very relevant, yeah be ready for all the imports from Mexico with "friend shoring" - up until the day of reckoning finally comes to America and the world stops financing our huge debt loads, many here in the US might start having a lot of problems being able to buy those products....



Edited 1 time(s). Last edit at 05/24/23 09:16 by wyeth.



Date: 05/24/23 09:25
Re: Capital Budgets
Author: train1275

coach Wrote:
-------------------------------------------------------
> You know, with the endless projects to increase
> siding lengths, due to management's endless desire
> for longer and longer and longer trains, requiring
> new additional work for even longer
> sidings...............pretty soon we'll have
> double-track everywhere!

Exactly ! Then we can park a train on both tracks !



Date: 05/24/23 09:30
Re: Capital Budgets
Author: reno7349

There was an recent article in Trains were JB Hunt and the BNSF were going to be working much closer together.  If this allows joint long term investments and decision making, it would give this partnership a leg up on everybody.  It exposes one of the bigger weaknesses of the Scroban plan for the UP.
JB Hunt is BNSF's biggest customer.



Date: 05/24/23 09:41
Re: Capital Budgets
Author: Lackawanna484

wyeth Wrote:
-------------------------------------------------------
> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
> > One item a lot of folks are watching is Chinese
> > direct investment in Mexican factories and
> > assembly plants. It has been rising
> significantly
> > in the past few years.  With NAFTA 2.0 and
> strong
> > Mexican government support, "friend shoring" in
> > Mexico may be set for a huge jump in output to
> the
> > US and Canada in the next few years.  UP,
> BNSF,
> > and CPKC better be ready,,,
>
> Off the immediate topic, but very relevant, yeah
> be ready for all the imports from Mexico with
> "friend shoring" - up until the day of reckoning
> finally comes to America and the world stops
> financing our huge debt loads, many here in the US
> might start having a lot of problems being able to
> buy those products....

The various Mexico - Canada - US free trade arrangements open a lot of (maybe) unintended doors. 

China, Japan, and Korea have each demonstrated the value of moving up the value added chain. Use cheap labor to make stuff. As workers and their children become more educated, they become the middle class, the technicians, the scientists, etc. And the lower skill work gets pushed down the ladder to Indonesia, Pakistan, Bangla Desh, etc.  The US hasn't learned that lesson as the school systems fail to deliver skilled workers.



Date: 05/24/23 09:43
Re: Capital Budgets
Author: TAW

MP555 Wrote:
-------------------------------------------------------

> The BNSF "siding" project is on the Fallbridge
> Subdivision just east of Plymouth WA.  It will be
> between MP 194.6 and MP 198.6 and include a
> universal crossover in the middle.

That's hilarious.

Part of the Pasco-Wishram CTC project was extend every other siding then lengthen the trains to match the long sidings. That cut capacity by about 40% (50% of the trains but 10% longer trains). Now they have to fix it, much like the CTC on the NP between Pasco and Spokane was going to increase capacity so much the SP&S wasn't needed.

The CTC industry of the 50s had propaganda almost as good as the auto industry of the 50s.

TAW



Date: 05/24/23 11:36
Re: Capital Budgets
Author: BigSkyBlue

rantoul Wrote:
-------------------------------------------------------
> Capital Budget is what's leftover after operation
> expenses plus Budget is set for dividends and
> stock buybacks.
>
> Capital Budget is then allocated to what is needed
> for annual maintenance with the remainder for
> 'projects that could include capacity expansion'.
>
> That's how Class 1 CFO / CEO / BOD thought process
> works.

The most recent "Classic Trains" had an article about Wisconsin Central and Ed Burkhardt was quoted as saying going public with WC may not have been the best move since that introduced stockholders and a board of directors to WC, which had been privately held.  The stockholders and board wanted dividends, stock buybacks, and ultimately forced the sale of WC to CN.  The stockholders and board did NOT want the focus on the customer, and the continued recovery of deferred maintenance and capital improvements that had resulted in WC's success.  It's a good read.   BSB



Date: 05/24/23 12:05
Re: Capital Budgets
Author: SOO6617

wyeth Wrote:
-------------------------------------------------------
> Off the immediate topic, but very relevant, yeah
> be ready for all the imports from Mexico with
> "friend shoring" - up until the day of reckoning
> finally comes to America and the world stops
> financing our huge debt loads, many here in the US
> might start having a lot of problems being able to
> buy those products....

That will happen when countries like China and others
figure out how to balance their trade and stop running
significant surpluses. Until that time someone has to
run up debts and they have to finance that debt. The
problem for China is their surplus is too big, and their
people are too poor. 



Date: 05/24/23 12:12
Re: Capital Budgets
Author: sfbrkmn

Just like the DT work in KS, when said & done one thing will not change: the rr still won’t be able to move traffic

Posted from iPhone



Date: 05/24/23 19:39
Re: Capital Budgets
Author: funnelfan

MP555 Wrote:
-------------------------------------------------------
> The BNSF "siding" project is on the Fallbridge
> Subdivision just east of Plymouth WA.  It will be
> between MP 194.6 and MP 198.6 and include a
> universal crossover in the middle.

Interesting. I suspect the siding will start on the east side of this short overpass at MP194.8 where the old McNary Dam spur left the mainline. Looks like the far end of the siding will be where that patch of greenery on the slope above the tracks in the distance straight above the McNary Dam entrance sign. Looking at aerial imagery, it appears that BNSF has already constructed two short sections of grade on the north side of the mainline in this area.

Ted Curphey
Ontario, OR



Edited 1 time(s). Last edit at 05/24/23 19:43 by funnelfan.




Date: 05/24/23 20:46
Re: Capital Budgets
Author: MP555

funnelfan Wrote:
-------------------------------------------------------
> Interesting. I suspect the siding will start on
> the east side of this short overpass at MP194.8
> where the old McNary Dam spur left the mainline.

A bridge is also part of the plan.  Is this the only one between those mileposts?



Date: 05/24/23 22:44
Re: Capital Budgets
Author: funnelfan

MP555 Wrote:
> A bridge is also part of the plan.  Is this the
> only one between those mileposts?

Doesn't make much sense to put a bridge in as the track plunges into a deep cut just out view to the right. It would be much more cost effective to extend the east end of the siding since it's only in a shallow cut. This is the only bridge in the area of the siding.

Ted Curphey
Ontario, OR



Date: 05/25/23 04:31
Re: Capital Budgets
Author: Pacific5th

funnelfan Wrote:
-------------------------------------------------------
> MP555 Wrote:
> > A bridge is also part of the plan.  Is this
> the
> > only one between those mileposts?
>
> Doesn't make much sense to put a bridge in as the
> track plunges into a deep cut just out view to the
> right. It would be much more cost effective to
> extend the east end of the siding since it's only
> in a shallow cut. This is the only bridge in the
> area of the siding.

Well it's BNSF, the same ones that put East Cheney where it is instead of Anderson road where they could have fit a train in between there and Cheney for extra room.



Date: 05/25/23 09:54
Re: Capital Budgets
Author: TAW

Pacific5th Wrote:
-------------------------------------------------------

> Well it's BNSF, the same ones that put East Cheney
> where it is instead of Anderson road where they
> could have fit a train in between there and Cheney
> for extra room.

Nothing has changed in 40 years.

TAW



Date: 05/25/23 10:48
Re: Capital Budgets
Author: StStephen

BNSF’s 2023 capital plan is for $3.96 billion. UP’s is $3.6 billion (UP targets 15% maximum of projected revenue). For reference see slide 19 of UP’s Q1 presentation available online.   

So BNSF is spending more. The question would be: on what? BNSF has targeted “over $700 million”, or roughly 17.7% of their capital plan for growth projects. I haven’t been able to find a break-out from UP of growth allocation, but historically they’ve been about 10% - 12%, or around $360 million to $430 million. I think a reasonable guess is that a big chunk of the difference between BNSF and UP capital plans is growth allocation: BNSF would appear to be significantly more.   

That’s one side of the difference between the two. The other would be: who has the better operations, using that invested growth capital better/more efficiently (in terms of train ops, not PSR BS).

Bruce
 



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