(The following article by Dan Piller was posted on the Fort Worth Star-Telegram website on January 25.)
FORT WORTH, Texas — Burlington Northern Santa Fe Corp. reported a record $1.5 billion profit for 2005 and said that it would add an additonal 20 acres to its Alliance intermodal terminal in north Fort Worth and hire 250 more workers.
The new employees will be added to BNSF’s current work force of 3,500 at its corporate headquarters and yard in Fort Worth.
The new workers, part of a systemwide hiring program, will be hired for yard, mechanical, engineering and corporate staff work.
Including the Alliance project, BNSF will spend $2.4 billion on capital improvements for 2006, a 10 percent increase over last year’s spending.
The intermodal terminal, where giant forklifts pluck containers from rail cars and move them to truck trailers, has grown significantly since it was opened a decade ago. In 1995 the facility handled 277,803 containers. That figure more than doubled to 573,252 containers last year, BNSF spokeswoman Suann Lundsburg said.
Hillwood Properties, which owns and operates the 17,000-acre Alliance airport and business development along Interstate 35W in northern Tarrant County, has used the intermodal facility to lure companies with shipping needs looking to locate new operations.
“That intermodal terminal and its capacity have been responsible for about 70 percent of the business we’ve attracted to Alliance,” said Mike Berry, president of Alliance developer Hillwood Properties.
The effect of the expansion of the terminal, which has grown to 289 acres, on employment is unknown. A contractor currently employs 250 workers at the terminal, Lundsburg said.
BNSF and the Alliance terminal in particular have benefited from the expansion of shipments from Asia, primarily from China, into ports in Southern California. Much of that traffic moves inland on BNSF routes from L.A. to Alliance.
China’s exports to the United States have climbed from $45.5 billion in 1995 to $222.9 billion in the first 11 months of 2005.
Most of that traffic comes in modular containers that can be hauled on rail cars then transferred to truck trailers for highway travel.
Big new Chinese ships can typically handle 2,400 or more containers of Asian imports, enough to fill 12 100-car trains.
“China traffic has been huge for us,” said BNSF Chairman Matt Rose in detailing BNSF’s 2005 performance. Rose noted that in addition to the expansion at Alliance, BNSF is expanding its other so-called “logistics parks” in Houston; Chicago; Memphis, Tenn.; San Bernardino, Calif.; Seattle; and St. Paul, Minn.
Darius Gaskins, who was president of the old Burlington Northern Railroad in the 1980s and before that chairman of the Interstate Commerce Commission, said “Burlington Northern and Santa Fe [the two carriers that merged in 1995 to create BNSF] were pioneers in intermodal service, and it’s paying off for them big time now.”
The logistics park concept has blunted the long enmity between railroads and truckers, who fought one another for intercity shipping business for decades. Now railroads and truckers frequently are partners, with the railroad taking shipments for the long haul and truckers completing a short haul to the final destination.
Rose said Tuesday that BNSF expects a significant increase in its intermodal business with the signing of a new contract with Swift Transportation.
That adds to a stable of agreements with long-haul trucking companies.
The Alliance announcement came as BNSF announced a record fourth-quarter profit of $430 million, or $1.13 per share, up from the year-ago quarter’s $347 million, or 91 cents per share.
For 2005, BNSF earned $1.53 billion, or $4.01 per share, up from $791 million, or $2.10 per share. Annual revenue rose 19 percent to $12.99 billion from $10.95 billion.
The railroad was aided by price increases of up to 9 percent that it was able to impose on shippers to cover extra fuel costs. BNSF stock (ticker: BNI) rose on the earnings report, hitting a new 52-week high of $76 per share before settling back at $74.80 per share. That was still above the previous high of $72 per share.
Rose said he anticipates that traffic will grow by as much as 15 percent in the first quarter, particularly in coal and grain shipments.