feature story Railroads
“ By 2015, the U.S.
will be the single
largest producer of
oil in the world.”
– Dr. Terry Pohlen, UNT
Left: More crude oil is being moved by
rail with an increase in U.S. domestic
energy production.
BELOW: BNSF employee.
population, not to mention supply
and power homes and businesses
every day. Railroads carry more than
40 percent of freight in the U.S. by
volume – more than any other mode
of transportation – and provide the
most fuel- and cost-efficient means
for moving freight over land.
“BNSF is the largest in North
America largely because of its geographic network and the western
ports. The company is investing $5
billion dollars in capital on top of
the 4 billion it invested last year,”
said Terry Pohlen, Ph.D., associate
professor of logistics and director of
the Center for Logistics Education
and Research at the University of
North Texas. “BNSF is upgrading
infrastructure by adding parallel or
triple tracks to existing routes, and
it is investing in more locomotives
and intermodal hubs. Their future is
tied to intermodal hubs and energy.”
With intermodal transport picking up steam, Pohlen predicts that
intermodal rail will replace much
of the long-haul trucking business
because rail can reduce costs, give
great service and allow companies
to be more competitive.
Tom Harris, president of Alliance
Air/Aviation Services with Hillwood
Properties, talks about BNSF’s success in its presence at Alliance.
“They are an incredibly well-run
organization. The BNSF team has
done an incredible job over the last
16 years to ensure they are ahead of
what’s going on in the industry. They
are always improving how they operate their business,” he said. “The
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great news is that they have done
very well on the intermodal side of
their business. They have a number
of yards like the one you see here at
Alliance around the country. They
are a very well-run organization.”
“BNSF is the largest intermodal
player because they are able to invest the capital,” said Pohlen. “By
being under Berkshire Hathaway,
they can focus on the long-term
strategic perspective and make decisions that are good for the company and not just make short-term
returns for shareholders.”
Next Stop
Increase in U.S. domestic energy
production of crude oil and natural
gas has created an increase in crude
oil being moved by rail: in 2008,
U.S. Class I railroads originated
9,500 carloads of crude oil and, in
2013, that number was a staggering
407,761 carloads.
“BNSF is playing an important
role in helping the U.S. and North
America achieve energy independence by replacing overseas crude oil
with fuels being produced from the
continent’s vast oil reserves,” Carl
Ice, president and CEO of BNSF,
noted. “Rail offers producers a
more flexible transportation option
and gives refiners easy access to
premium, domestic fuels.”
By 2015, the U.S. will be the single largest producer of oil in the
world, said Dr. Pohlen.
“Many of the oil fields are not
well-served by pipeline,” he said.
“Railroads have the ability, capaci-
Winter/Spring 2015
ty and flexibility to move with the market, allowing you to
redeploy the railcar to another refinery, in case a refinery
shuts down due to maintenance or market conditions. If
the demand is for a certain product made from crude oil,
then railcars can be reconfigured to make that happen – not
so with pipelines.”
BNSF helped pioneer the modern crude-by-rail option
when the first crude oil train left Stanley, N.D., in December 2009. Today, the overwhelming majority of crud B