AusRAIL, Market Sectors

North America: Major investment planned for freight railroads

<span class="" id="parent-fieldname-description"> Major railroads in the US and Canada have earmarked investment totalling over US$26.5bn in private funding during 2013, including US$14bn targeted at upgrading and enhancing capacity across the rail freight network. </span> <p>The Association of American Railroads (AAR) reports that the nation’s major freight railroads plan to invest an estimated US $24.5bn in 2013 to build to ensure freight railroads can continue to deliver for the nation’s economy.</p><p>This investment includes US$13bn in projected capital expenditure.<br />AAR CEO, Edward R. Hamberger said while most other transportation modes rely on government funds, America’s freight railroads operate on infrastructure they own, maintain and upgrade to serve their customers and power the US economy.</p><p>“This year, freight railroads plan to continue to focus on investments that maintain and enhance our physical infrastructure and safety systems, including cutting edge technology that ensures we are ready to deliver for the future,” Hamberger said.</p><p>In recent years, US railroads have been spending roughly 17% of their annual revenue on capital expenditures.</p><p>The freight railroads also estimate they will hire more than 11,000 employees this year, primarily in response to retirements and attrition for positions that can be found across the US. With approximately 22% of the industry’s workforce eligible to retire in the next five years, railroads are dedicated to recruiting highly skilled people interested in making railroading a career. </p><p>Rail employee compensation, including benefits, averages roughly US$107,000 per year, with jobs ranging from engineers and dispatchers, to law enforcement, to information technology and industrial development. </p><p><strong>Canadian National to target C$1.9bn in 2013</strong></p><p>Candian National (CN) also has a significant investment program planned for 2013, budgeting C$1.9bn to maintain and upgrade its network and improve customer service.</p><p>CN CEO Claude Mongeau said, “CN is committed to operating a safe and sustainable railway, making continued improvements in service and seizing traffic opportunities to grow at low incremental cost.”</p><p>More than C$1bn in 2013 will be spent on track infrastructure and this investment will include the replacement of rail, ties and other track materials, and bridge work, as well as capacity and productivity improvements, among others, to:</p><ul><li>Continue CN’s extended siding program in northern British Columbia, Alberta, and northern Ontario</li><li>Double-track portions of its mainline in Saskatchewan and add new signals on CN’s Alberta mainline to expedite train movements</li><li>Continue improvements at Kirk Yard in Gary, Ind., and the former Elgin, Joliet and Eastern Railway line, and increase yard capacity and add sidings in the Baton Rouge, La., region.</li></ul><p>CN also expects to spend approximately C$700m to grow with its customers across a range of markets as they expand their business, including investments in transloading operations and distribution centres, a new intermodal terminal in Joliet, Ill., and IT projects.</p><p>CN will target approximately C$200m for the acquisition of locomotives and rolling stock, expecting to take delivery of 40 new and 37 second-hand high-horsepower locomotives over the next 2 years after acquiring 25 new and 123 second-hand high-horsepower locomotives in 2012.</p><p>Meanwhile the company is delaying the progress of a feasibility study for a new C$5bn rail line in Quebec in part due to the postponement and slow progress of a number of mining projects in the region.</p>