Our plan, and our business model, is to always grow with our customers, and next year is no exception. Growth, however, will be mixed in 2016. We have good prospects for our intermodal business, while other sectors are challenged. The U.S. traditional manufacturing sector, a key driver of freight volumes, is feeling the adverse effects of a strong U.S. dollar and lower commodity prices. Conversely, consumer spending should benefit from a continuation of lower fuel prices and a declining unemployment rate.
While growth in 2015 wasn’t as strong as reports earlier in the year indicated, rail traffic trends show that as populations increase over the long term, demand for all types of goods increases, which drives demand for rail services and need for additional rail capacity. In fact, the U.S. Department of Transportation expects total U.S. freight movements to increase 45 percent, from around 19.7 billion tons in 2012 to 28.5 billion tons in 2040. It is that continued trend of demand growth that has led the major freight railroads in North America to significantly invest over the past several years, including spending $20 billion in 2015, to build, maintain and grow the nation’s rail network. This private capital went to add new equipment and locomotives, more track and bridges, and new technology to keep North America’s rail network the best in the world.
The challenge for 2016 will be continuing to find growth opportunities and making investments that align with the potential for a slower economic environment. BNSF will remain focused on being able to grow with our customers by effectively and efficiently building additional supply chain infrastructure to enhance our nation’s competitiveness and further enable U.S. companies to compete in this global marketplace.
To achieve this, we also need to reform our processes for permitting infrastructure projects. The current process takes too long, costs too much and could yield better results if it were streamlined while not compromising the integrity of what the permitting process is meant to accomplish.