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Today, the Association of American Railroads (AAR) announced that major U.S. railroads plan to spend a record $13 billion on capital expenditures in 2012 to expand, upgrade and enhance their networks. In addition, the Class Is plan to hire more than 15,000 people this year to replace retiring workers and add new positions.
 
Capex investments include intermodal terminals; new track, bridges and tunnels; new locomotives and rail cars; and modernized safety equipment. In recent years, railroads have been spending about 17 percent of their annual revenue on capex compared with about 3 percent by the average U.S. manufacturer, AAR officials said in a prepared statement.

Kansas City Southern recently announced plans to again invest 17 percent to 18 percent of its annual revenue in capex. In addition, Union Pacific Railroad has budgeted about $3.6 billion this year versus $3.2 billion in 2011; Norfolk Southern Corp. has budgeted $2.4 billion versus 2011’s $2.16 billion; CSX Corp. has budgeted $2.25 billion versus 2011’s $2.2 billion; CN has budgeted $1.75 billion versus 2011’s $1.71 billion; and Canadian Pacific has budgeted between $1.1 billion and $1.2 billion versus a little more than $1 billion in 2011.

“This year, [railroads] are investing at a record rate to meet the demands of the recovering economy,” said AAR President and Chief Executive Officer Ed Hamberger.

In terms of employment, rail employee compensation averages about $100,000 annually, with jobs ranging from engineers and dispatchers to law enforcement to information technology and industrial development, according to the AAR. Freight railroads employ about 175,000 workers nationwide.
 
“As the demand to move more freight by rail increases and a significant percentage of the rail workforce hits retirement age, freight railroads are continuing to add and fill jobs nationwide,” said Hamberger.