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BNSF beating Union Pacific in competition for western rail freight
来源： 编辑：编辑部 发布：2018/01/30 08:56:09
THE Union Pacific (UP) has lost ground to its rival the Burlington Northern Santa Fe (BNSF) for a third year as America's biggest railways battle for western rail freight, reports Bloomberg.
While UP reversed a two-year decline in carloads, its 1.7 per cent growth rate in the fourth quarter trailed BNSF's 5.5 per cent. The pitched battle for freight has throttled Union Pacific's ability to raise freight rates, a key lever for boosting revenue and improving efficiency.
UP chief executive Lance Fritz said he won't enter a price war. Decisions to pursue cargo are "based on whether or not we can generate an attractive return that allows us to reinvest in the railroad. We don't pursue volume for volume's sake," he said.
UP will get a hand from the reduction of the corporate tax rate to 21 per cent from 35 per cent. Union Pacific, which doesn't have operations overseas to mitigate its tax bill, had an effective rate of 37.4 per cent in 2016.
UP expects carloads to expand in the low single digits through 2018. It plans capital spending of US$3.3 billion this year, including purchases of 60 locomotives and 700 railcars. It also said it's building a $550 million rail yard in Texas that will begin operations in 2020.
While UP reversed a two-year decline in carloads, its 1.7 per cent growth rate in the fourth quarter trailed BNSF's 5.5 per cent. The pitched battle for freight has throttled Union Pacific's ability to raise freight rates, a key lever for boosting revenue and improving efficiency.
UP chief executive Lance Fritz said he won't enter a price war. Decisions to pursue cargo are "based on whether or not we can generate an attractive return that allows us to reinvest in the railroad. We don't pursue volume for volume's sake," he said.
UP will get a hand from the reduction of the corporate tax rate to 21 per cent from 35 per cent. Union Pacific, which doesn't have operations overseas to mitigate its tax bill, had an effective rate of 37.4 per cent in 2016.
UP expects carloads to expand in the low single digits through 2018. It plans capital spending of US$3.3 billion this year, including purchases of 60 locomotives and 700 railcars. It also said it's building a $550 million rail yard in Texas that will begin operations in 2020.