News & Reviews News Wire Lower volume, higher costs weigh on BNSF’s third-quarter earnings

Lower volume, higher costs weigh on BNSF’s third-quarter earnings

By Bill Stephens | November 7, 2022

Volume fell in three out of the railway's four business groups

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Train with double-stack container cars moves through S curve
A BNSF intermodal train approaches Kansas City Union Station on May 8, 2022. David Lassen

OMAHA, Neb. — BNSF Railway’s profits declined in the third quarter due to a combination of lower volume and higher operating expenses.

The railway’s operating income fell 7.1%, to $2.1 billion, on revenue of $6.5 billion, a 16.8% increase, BNSF’s parent company, Berkshire Hathaway, reported on Saturday. Revenue rose due to higher fuel surcharge revenue and an increase in average revenue per carload and intermodal unit.

Expenses rose 32.8% as fuel prices shot up 80% and compensation and benefits rose 26.6%. BNSF’s operating ratio rose 8.2 points to 67.7% in the quarter.

Overall volume was down 5% as consumer products, industrial products, and coal traffic all declined.

Consumer products volume, which includes intermodal and automotive traffic, fell 7.2%. “The volume decreases were primarily due to lower international intermodal shipments resulting from supply chain disruptions,” Berkshire Hathaway reported.

Industrial products volume slumped 6.8%, driven by lower petroleum and building products shipments.

Agricultural volume was up 4.2% thanks as domestic grain, renewable diesel and oil and feedstock shipments all rose.

Coal volume declined 1.2% “primarily due to network challenges,” Berkshire Hathaway reported.

6 thoughts on “Lower volume, higher costs weigh on BNSF’s third-quarter earnings

  1. Didn’t all this occur when BNSF had almost every passing track from K C to Calif. plugged?? There was plenty of comment on that from employees on Trainorders.

  2. So let me get this right as reported as copied & paste below. Would this mean that BNSF still had net income of $2.1 billion on revenues of $6.5 billion?? Or a net operating margin of +30%!! Tell me how many businesses, small businesses would kill for that kind of bottom line. Sorry but one of Warren Buffet/Berkshire Hathaway’s best ever investment has to be BNSF by the shear amount of cash it brings in.

    The railway’s operating income fell 7.1%, to $2.1 billion, on revenue of $6.5 billion, a 16.8% increase, BNSF’s parent company, Berkshire Hathaway, reported on Saturday. Revenue rose due to higher fuel surcharge revenue and an increase in average revenue per carload and intermodal unit.

  3. Compensation and benefits rose 26.6%? I didn’t know BNSF was so generous. And the new pay raises now being negotiated haven’t kicked in ye.

  4. Where are the people that blame PSR for the same issues on the other railroads? Seems to me that BNSF had the worst third quarter of all the railroads and yet the really don’t use PSR. Don’t get me wrong, I don’t like PSR either and I think it is to blame for a lot of problems the railroads are facing today but I don’t think it’s the only reason.

    Of course now BNSF could try to use this as an excuse to not change their attendance policy because it would hurt their bottom dollar of which they have lost to much of in the third quarter.

  5. oh, but the economy is booming ON lying Amtrak Joe’s watch, we are in a recession, rail volume is down drastically if you follow the numbers closely which nobody ever comments o here, bring back Don Phillips

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