OMAHA, Neb. — BNSF Railway’s revenue and profits tumbled in 2023 due to a combination of lower volume and lower revenue per carload and intermodal unit.
Pre-tax earnings declined 14.2%, to $6.6 billion, as revenue declined 6.9%, to $23.4 billion, BNSF parent company Berkshire Hathaway reported on Saturday. The railway’s operating ratio increased 2.5 points to 68.4%.
Revenue from BNSF’s consumer products segment, which includes intermodal and automotive, fell 14.7% for the year, to $7.9 billion, as volume declined 8.4%. “The volume decrease was primarily due to lower intermodal shipments resulting from reduced West Coast imports, the loss of an intermodal customer and competition from lower spot rates in the trucking market, which has impacted our domestic intermodal demand,” Berkshire said. “These declines were partially offset by an increase in automotive volume from higher vehicle production.”
Industrial products revenue increased 1.8%, to $5.7 billion, as higher revenue per carload was partially offset by an 0.8% volume decrease. “The volume decline was primarily due to lower demand for chemicals, plastics, minerals, paper and lumber, partially offset by increased shipments of steel and aggregates from infrastructure demand,” Berkshire said.
Agricultural products revenue dropped 2.8%, $5.6 billion, as volume declined 2.9% due to lower grain exports. BNSF carried higher volumes of domestic grains and feedstocks and renewable diesel, however.
Coal revenue declined 3.4%, to $3.8 billion, as volume declined 4% due to lower natural gas prices.
What Warren isn’t reporting is the steady bleed of Intermodal shippers away from BNSF – JBHU – Quantum.
Look at the Mark Cane authored three volume set called “Against All Odds” for your answers concerning current BNSF travails. It’s available on Amazon. I have my copy.
ATSF brought all this on with the ATSF-JBHU-Quantum Agreement in 1989. The Agreement is primarily for the benefit of Walmart. Many of us active in the intermodal KNOW this is price fixing. Therefore, many of us active in the intermodal system load UPRR. BNSF continues Quantum, and many of us IMCs flee BNSF.
It must be said that the transport industry as a whole has suffered decrease in volume and profits. This will and is changing. The actions of investment and upgrades have not slowed providing clear indications of strong projections.