The union component is consistent with what you should expect to see across the industry as a result of national bargaining and reflects both the carryover of the July 1, 2014 wage increase as well as a January 1, 2015 increase. In addition, you will recall that we amended a Locomotive Maintenance Agreement in June of 2014 which resulted in a $15 million shift between labor and the MS&O expense lines in both the third and the fourth quarters. This trend will continue in 2015 and we will be cycling the expense shift during the first half of the year.
Looking at MS&O expense, we expect the first quarter to be driven by inflation and volume growth in line with the trends seen during 2014. Fuel expense in the first quarter will be driven by lower cost per gallon reflecting the current price environment, higher volume, and continued fuel efficiency through technology and process initiatives. We expect depreciation to increase around $10 million versus the prior year in each quarter in 2015. This reflects the ongoing investment in our business partially offset by an asset life study conducted in the fourth quarter. Finally, equipment and other rents in the first quarter is expected to increase year-over-year driven by higher freight car rates and incremental volume.
Now let me talk about our Capital Investment Plan for 2015. In 2015, CSX plans to invest $2.5 billion in our business. This represents a moderate increase from the 2014 level and core investment is expected to be about 17% of revenue. In the chart on the left, you can see that about half the capital investment will be used to maintain core infrastructure to help ensure a safe and fluid network. Our equipment investment in locomotives and freight cars ensure CSX has an appropriate level of rolling stock to support commercial demand and improve on-time performance levels.
In addition, we will continue to focus on strategic investments that support long-term profitable growth and productivity initiatives. In 2015, we are prioritizing infrastructure projects that will increase line of road capacity on the northern tier to improve fluidity and system velocity. Finally, looking at our investment in Positive Train Control, we have invested $1.2 billion through the end of 2014 and plan to invest an additional $300 million in 2015. As the implementation of PTC extends over a longer period of time, we anticipate spending at least $400 million beyond 2015. As a result, our current estimate for the total cost of PTC is at least $1.9 billion.
Now let me wrap up on the next slide. Overall, CSX delivered solid financial performance in 2014 with robust volume growth offsetting the impact of last year’s weather, network performance and a weak coal pricing environment. We continued to see broad based strength across our diverse business portfolio and the strength is translating into more visible and more meaningful earnings improvement. CSX achieved double-digit earnings growth in both the third and the fourth quarters and incremental operating margins expanded throughout the year.
For the full year 2015, CSX still expects to achieve double digit EPS growth. Even as we cycle strong 2014 volume growth, we expect Merchandise and Intermodal to again grow at a faster pace than the broader economy. We continue to target pricing above inflation, as capacity remains tight across all modes of transportation and we expect to deliver productivity savings approaching $200 million in 2015. Domestic coal volumes should remain relatively stable in 2015 while the export coal market remains challenged. That said, we will be keeping a close watch on natural gas prices and heating and cooling degree days as we move through the year.
Finally, we expect margin expansions to resume in 2015, which reflect improving service levels, a strong pricing environment, and continued economic expansion. Over the longer term, we continue to target an operating ratio in the mid 60’s. With that, let me turn the presentation back to Michael for his closing remarks.
