UP Confirms $3.4B Capex Program

Written by William C. Vantuono, Editor-in-Chief
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Union Pacific photo.

At its 4Q/Full-Year 2023 earnings presentation, Union Pacific said it would invest $3.4 billion in capital this year. On Feb. 21, UP confirmed its plan to “support safe operations, renew assets and grow with customers … to make the railroad safer and generate economic and supply chain activity across our 23-state footprint, boosting local, regional and national economy.”

Union Pacific illustration

An estimated 56% of the capital plan, or $1.9 billion, will go toward upgrading and replacing infrastructure, such as rail, ties and ballast, along with $600 million toward locomotives and equipment. UP noted it “will continue to modernize the locomotive fleet, upgrading older core units. The plan also includes targeted freight car acquisitions to support replacement and growth opportunities. In addition, we are investing in capacity and technology projects across our network, such as siding extensions, to increase capacity, and improve productivity and operational efficiency.”

UP added it “will continue to expand its intermodal footprint, supporting business development in targeted, high-growth areas such as Southern California, Phoenix and Kansas City.” The new Phoenix intermodal terminal opened Feb. 1.

Phoenix Intermodal Terrminal. Union Pacific photo

The locomotive modernization program is based on a $1 billion contract awarded to Wabtec in July 2022 for 600 units—525 AC4400 and AC6000 locomotives and 75 Dash-9 locomotives. The modernized locomotives “will feature a suite of digital solutions and innovations, including next-generation controls technology,” UP said. “The modernizations will extend the locomotives’ life and provide benefits, including a fuel efficiency improvement of up to 18%, a more-than 80% increase in reliability; and a more-than 55% increase in haulage ability.” The contract was Wabtec’s third major modernization order from UP since 2018, with more than 1,030 locomotives upon completion in 2025. Deliveries began in 2023.

Work is under way at several Wabtec plants, Fort Worth, Tex. (pictured) among them, to modernize 600 Union Pacific locomotives. Wabtec photo

“We invest to keep our railroad and employees safe, and we will never compromise on that,” said CEO Jim Vena. “We also spend capital dollars to provide a quality service product, and strong service, creating a winning environment for our customers.”

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