BNSF continues Hi-Line investment
Railway working to overcome recent service problems
June 6, 2014
At a recent economic summit held in Havre, a BNSF Railway Co. official said the company has invested in this region for more than a century, and plans to continue investing and operating here for at least another century.
"It is our sincerest desire to be an integral part of your economy, and when I say yours I mean not just the state of Montana but right here in Havre for the next 100 years," said Andrew Johnson, vice president of governmental affairs for the company.
Johnson was a keynote speaker at the inaugural Hi-Line Economic Summit held in Havre in May.
He said that of the record $5 billion in investment in infrastructure improvements the railroad is making this year, $170 million of that is in the Glasgow Subdivision, right here on the Hi-Line. Added to $470 million invested in the subdivision from 2010 to 2013, that puts the money spent on the Hi-Line to more than a half-billion dollars, Johnson added, saying that reflects the company's attitude toward the future.
"We are very aggressively investing," Johnson said. "We're bullish on the future, we're bullish on the opportunity to expand ... and strengthen our railroad so we can provide the best service possible."
He referenced a comment Warren Buffet made when his company, Berkshire Hathaway, purchased BNSF in 2009 and people asked why he would buy a railroad, and why he would buy it during a recession.
"He said, 'Hey, it's a bet on the future of America,'" Johnson said.
More than a century on the Hi-Line
The railroad has been a key component of the Hi-Line economy - the region was named for the northernmost tier of rail in the state - for as long as many towns have been on the Hi-Line.
Many communities, including Havre, grew up from sidings or water stops built to service the Great Northern Railway in the late 1800s.
Johnson said that still is a focus of BNSF - while the Montana division headquarters is in Billings, it has 100 employees. But about 25 percent of the company's almost 2,300 Montana employees, well more than 400, are in Havre, he said.
Of BNSF's hiring for this year, that will include 450 for Montana, with a chunk of that, again, on the Hi-Line, he said.
Investing for the long term - and to fix service problems
Johnson said part of the investment - BNSF spent $4 billion in capital improvements last year, which set a record before the planned $5 billion this year - is for long-term improvements. Part of it also is to solve service problems the railroad has experienced in the last year.
"This is a story that has, quite candidly, frustrated us greatly. We know it's frustrated a number of our customers," he said.
"Our service, frankly and candidly, hasn't been what we expect, what we know our customers expect. So we are working diligently through those service challenges, and the good new is, we have made huge progress from where we were in January or February."
He said the lag in service is a "tale of many components," adding that the problems all were on the northern tier of BNSF's routes.
One of the components was a growth in rail traffic - half of the growth was carried on BNSF, he said.
Another part was the weather - North Dakota and South Dakota and Minnesota had exceptionally bad weather.
"It's hard to do anything when it's 40 or 50 below zero," Johnson said. "I'm sure you would agree with that."
Another issue was agricultural orders all coming at once. Johnson said BNSF tries to plan and predict when and where the orders would come, and work with elevators to deal with those shipments.
"We were all positioned and ready to go, and they weren't coming, and then all of the orders came at once," Johnson said.
Johnson said 2014 is the "Year of the Fives" for the railway company.
Along with the "five" of the $5 billion BNSF is investing in infrastructure, other fives are hiring 5,000 new employees, putting 500 additional locomotives into operation, buying or leasing 5,000 additional cars, and the railway is securing 5,000 next-generation tanker cars.
Johnson said that with recent disasters including the fire after a tanker train derailed outside of Casselton, North Dakota, and 47 deaths caused by the explosion of a derailed oil tanker train in Canada, BNSF decided not to wait for new federal regulations.
"We want to jump ahead and ensure we're doing all that we can to enhance and strengthen safety," he said.
Some of the capital investments include $600 million in terminal and line improvements, including 66 miles of second track to improve speed and efficiency. Much of that investment is on the Hi-Line, Johnson added.
Improvements on the Hi-Line section also include 115 miles of double-track and four new sidings, he said.
Ag and exports on the railroad
Johnson said agriculture is a key component of BNSF's freight hauling, including from Montana.
BNSF shipped 53,000 carloads of wheat from Montana in 2013, which comprised 70 percent of its ag-product shipping from Montana that year.
"This may not be a big surprise," Johnson said, but added that growth in another area is an "exciting story" - pulse crops.
BNSF is shipping an increasing number of crops like peas and lentils, he said.
For example, he said, Montana's production of yellow and green peas increased 185 percent from 2008 to 2013. BNSF's shipments of those products grew from 4.5 million hundredweights to 7.1 million hundredweights over the same time.
He said that is part of Montana's role as a key exporter for the country - in 2013, BNSF shipped 342,000 cars of product out of Montana and shipped in 32,900, with much of the Montana products going out of the United States.
"What does that say? It says that Montana is in the business of exporting," Johnson said. "You are a crucial part of the United States international trade picture and our trade competitiveness."