Most of the major North American rail providers published their investment plans in the first quarter of the year and there are signs that capacity for finished vehicle shipments is one area that is being targeted as vehicle sales in the US increase and a large amount of production is set to grow in Mexico.
CSX said it would invest $2.3 billion this year and it expected the automotive market to remain strong. “ Throughout 2012 and 2013, the company will have invested in acquiring more than 1,700 multi-levels [wagons], to ensure its ability to move finished automobiles keeps pace with the high level of production that is expected in 2013 and beyond,” said a CSX spokesperson.
CSX has completed projects in New England to allow AutoMax multi-levels as well as double-stack intermodal containers to travel through the region, a first for the area. It has also announced a planned track capacity expansion of the company’s R i v e r L i n e . T h i s project will require a $26m investment in 2013 and will support growth in the heavily populated New York area serving several areas of CSX’s business, including automotive.
Meanwhile, BNSF plans to spend $1 billion on locomotive, wagons and other equipment as part of a $4.1 billion spending programme. The company said it was acquiring 1,000 new bi-level and tri-level rail wagons and will also be investing in expanding existing distribution facilities in its network.
BNSF, which moves close to 200,000 wagons of finished vehicles per year and is the largest transporter of vehicles imported from Asia, is also expanding its fleet for moving vehicles.
“Growth in our automotive traffic segment continues to benefit from pent-up demand from an ageing vehicle fleet and attractive financing and incentives,” said Dave Fleenor, BNSF Railway’s assistantvice -president, automotive. “We are investing in maintaining our network and working with customers to accurately forecast volume requirements.”
Fleenor said that improved forecasting from the carmakers would help it ensure adequate infrastructure and equipment was in place. At the same time, he pointed out that BNSF was working with its transport partners to ensure better visibility for carmakers when using rail transport.
Capacity concerns in North America involve the huge growth expected for Mexico, where production is forecast to rise by more than 50% in the coming four years to nearly 4m units, with a large share of exports destined for the US and Canada.
Kansas City Southern (KCS), which has its primary automotive routes between the US Midwestand Mexico, said it had ordered “a significant amount of equipment for 2013 delivery to stay ahead of the demand for finished vehicles.” It is also investing in infrastructure to satisfy demand.
"In 2012, the automotive business unit was 8% of KCS’s total revenue and 5% of total volume,” said a spokesperson for the company, adding that it had a ripple effect on the rest of its business, with revenue from the movement of plastics and metals used in carmaking recorded by other business units.
Echoing Fleenor from BNSF, the KCS spokesperson also said that the longer the range of information carmakers could provide it with, the better prepared it was to satisfy their transport needs. KCS also pointed to a need for better communication between transport modes, including truck and ocean carriers.
BNSF’s chairman and CEO Matthew Rose said the company is looking at Mexico and the US southeast as important vehicle production regions. The company’s facility in Birmingham, Alabama provides access to several plants in the southeast.
"BNSF teamed with the Texas Department of Transportation to construct an additional access track between BNSF and the international bridge to reduce vehicular congestion on the US side by up to 50% and to improve rail capacity,” said Fleenor.
It has also supported the Mexican federal regulator of commercial road traffic, the city of Juarez, the state of Chihuahua, and the railway Ferromex in efforts to construct five highway-rail grade separations inside Juarez (see p24 for more).
