The $550 millon Brazos Yard, to be built in Hearne, Texas, is scheduled to open in 2020, Chief Operating Officer Cameron Scott says. It will be the largest investment in a single facility in the company’s 155-year history.
“The reason why we’re building a new hump yard in the middle of Texas is that as we look forward, both from the volume that’s coming out of the petrochemical complexes along the Gulf Coast, Texas itself, and our overall manifest growth down in that part of our network, we see that our existing infrastructure is going to be overwhelmed at some point in the future,” CEO Lance Fritz told Wall Street analysts on the railroad’s quarterly earnings call on Thursday morning.
UP is “very confident” that the time is right to build the yard, Fritz says.
“It will be the most productive yard on our network. It will be the lowest cost per-car switched, and the most efficient,” Fritz says. The yard will have the capacity to classify 1,300 cars per day.
To arrive at the decision to build a hump yard — which bucks trends in the industry, as CSX Transportation last year converted eight hump yards to flat-switching facilities — UP analyzed traffic patterns.
UP looked at how many cars it could bring to one location where they could be classified and then sent deep into its network or the systems of its interchange partners, Fritz explained. That analysis lets UP understand how many hump yards it needs and how many smaller, regional flat-switching yards are required.
“We have a very robust, large manifest network,” Fritz says.
Hearne, some 120 miles northwest of Houston, occupies a strategic position on UP: Seven lines radiate out from the area, heading north, south, east, and west.
The Brazos Yard project is part of UP’s $3.3 billion capital expense budget for this year.
