North Texas is well-positioned as rail freight makes a comeback

Posted Sunday, Jan. 27, 2013  comments  Print Reprints
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America is in the midst of a freight railroad renaissance, and North Texas has a front row seat.

More industries are turning to the rails to ship their goods, spurred on by factors such as high oil prices that have driven up the cost of long-distance trucking, and increased imports from Asia. Railroads also are stepping in to haul oil from new shale fields in places like North Dakota that lack pipelines.

To meet the new demand -- and the promise of steady growth for years to come -- railroads are investing heavily in new locomotives, rail cars, railroad ties and infrastructure.

One sign of the resurgence can be seen in far north Fort Worth, west of the Texas Motor Speedway, where General Electric has hired 300 people at a new locomotive plant, with the first engine expected to roll out the door soon.

"If you think about the capacity of freight railroads, with the locomotives that can move efficiently, it's a very reliable form of transportation and, with the amount of tons they carry, I don't think you can get any better," said Walter Amaya, the plant manager.

Other evidence is visible across the region.

Four miles south of the GE plant, at BNSF Railway's intermodal yard near Alliance Airport, railroad workers are busy around the clock unloading containers full of televisions, car parts and just about any other imaginable good for transfer to trucks.

Another 27 or so miles south of that, in Arlington, the Union Pacific Railroad is investing $30 million to replace worn-out rails and ties on a constantly busy, 35-mile route connecting Fort Worth and Dallas.

Locomotion

GE is keeping mum about how many locomotives it plans to produce in Fort Worth -- although Amaya told a Fort Worth Chamber audience on Jan. 16 that the facility will be capable of cranking out 1,000 locomotives per year.

GE also declined to specify how many locomotives are built at its other plant, a century-old facility in Erie, Pa. But a union official representing Pennsylvania workers said 657 locomotives were built there last year. And that plant has firm orders for about 400 units this year, said Roger Zaczyk, president of Local 506 of the United Electrical Radio and Machine Workers.

"This plant has made a record 911 locos a few years back," Zaczyk said in an email. "Locomotive needs is a volatile business -- customer needs, customer ability for financing, the issues in the various areas of the world, the changing energy needs. All kinds of things have an effect on the customer."

For both GE locomotive plants, the main customers are the major freight railroads, including Fort Worth-based BNSF, a unit of Berkshire Hathaway, and Omaha, Nev.-based Union Pacific.

GE is one of two manufacturers that dominate locomotive production in the U.S. The other is Electro-Motive Diesel -- commonly known as EMD -- which is owned by Caterpillar.

The Fort Worth plant will focus on building GE's energy-efficient Evolution locomotives for North American customers, while the Erie plant will build the machines for domestic and overseas customers, GE spokesman Manley Ford said.

Fort Worth-based BNSF plans to spend $1 billion on locomotives, freight cars and other equipment in 2013, company officials said. The planned purchases are part of a $4.1 billion capital program for the year -- a $450 million increase from 2012.

Union Pacific Railroad plans to buy 100 new locomotives in 2013, spokeswoman Raquel Espinoza-Williams said.

"We purchased 200 new locomotives in 2012 and have purchase agreements with both manufacturers -- GE and EMD -- for a combined minimum of 100 locomotives annually from 2011 through 2014," she said.

Union Pacific committed $3.6 billion in improvements to its rail network last year, according to a company news release. Union Pacific operates Davidson Yard, a major sorting yard in west Fort Worth, and several years ago opened its own 360-acre intermodal facility in Wilmer and Hutchins south of Dallas.

Naturally resourceful

BNSF's expansion efforts are aimed primarily at supporting fast-growing business in the Bakken Shale oil field in North Dakota, as well as completion of a new intermodal facility in Kansas City, Chairman and CEO Matthew K Rose said.

"This record capital plan continues our long-term focus on ensuring our network is prepared for the growing U.S. demand for freight rail," Rose said in a statement earlier this month. "We are focused on investing to meet our customers' expectations and to expand capacity where growth is occurring. Given the importance of our low-cost supply chain to the U.S. economy, our privately funded rail infrastructure is well positioned to ensure the U.S. ability to compete in global markets."

Union Pacific, which during the recession had locomotives in storage, is now investing heavily in improving its infrastructure, Espinoza-Williams said.

Much of the growth in Texas is related to the Eagle Ford shale production and activity in the Permian Basin, she said.

"We bring in the sand and the pipe for the operations," she said. "We also pull the crude oil out of the locations and transport it to the Gulf Coast or wherever it's going."

Union Pacific is also about midway through a railroad track renewal program, which is expected to continue through the first week of March. The program involves installing 35 miles of new rail, 24 track switches and more than 90,000 concrete ties, she said.

Some residents of Arlington have expressed frustration about the closing of railroad crossings during the track renewal work.

But the track improvements ensure that Union Pacific can continue to run freight trains through the busy corridor for decades to come.

Alliance

At BNSF's Alliance Intermodal Yard in Haslet, workers unload about 1,500 containers per day from an average of 12 trains.

What's inside the containers is a mystery to those on the ground.

"It could be doors for Home Depot. It could be televisions. It could be just about anything," said Anthony Johnson, BNSF manager of hub operations at Alliance.

BNSF is enjoying an increase in the shipment of many kinds of goods, including consumer items found at retail stores and lumber for home construction.

"The industry has been growing in the past 10 years," said Curtis Morgan, who manages a multimodal freight program at the Texas A&M Transportation Institute in College Station. "It took a nosedive in 2009, like everything else, but it's working its way back up."

Coal is the main product for which rail shipments are down, Morgan said, because many energy producers are instead taking advantage of low natural gas prices.

But many other goods are experiencing growth, he said.

Total carloads shipped by rail in the U.S., excluding coal, were up 3.3 percent in December, compared with the same month last year, according to a January monthly report by the Association of American Railroads.

Other products showing increases that month included: motor vehicles and parts, up 13.9 percent; crushed stone, gravel and sand, 9.1 percent; and lumber and wood products, 16.3 percent.

Intermodal traffic was up 1.7 percent nationwide, according to the report. Intermodal is a form of transportation in which goods are shipped in a sealed container, which can be lifted by crane from a ship to a rail car to a truck trailer without unloading the contents.

"For rail, low-cost, high-bulk items has always been their forte," Morgan said. "Several different market forces have come along and made rail make more sense, including the cost of trucking and congestion on roadways."

Urban challenges

The continued growth of freight rail presents challenges in major cities such as Fort Worth, where freight trains often block intersections.

Also, shipments of hazardous materials such as chlorine could pose a danger if, in a crash, derailment or other emergency, the substance leaked into a populated area.

Texas voters in 2005 approved a rail relocation fund, which was supposed to provide funding for metro areas to move busy freight corridors out of densely populated areas. But the Legislature hasn't provided the necessary dollars to make it work as advertised.

In Fort Worth, Transportation Secretary Ray LaHood has praised local officials for working together on the makeover of the Tower 55 intersection, where the BNSF and Union Pacific tracks intersect just southeast of downtown Fort Worth, near the Interstate 30/35W interchange.

About $104 million has been secured for the project, although the actual construction hasn't yet begun.

There are two north-south and two east-west lines at Tower 55, and about 90 trains per day pass through the area, officials have said.

The plan includes overhauling several pedestrian crossings in the Rock Island/Samuels Avenue area north of downtown, where children are commonly seen crawling under train cars to get to and from school and home. Also, a third north-south rail line will be built, adding about 9,000 feet of capacity so fewer trains have to park at crossings.

Gordon Dickson, 817-390-7796

Twitter: @gdickson

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