NEW YORK — BNSF Railway remains committed to volume growth even as it seeks to improve its profit margins.
“Growth is foundational for us,” BNSF Chief Marketing Officer Tom Williams told the RailTrends conference last week, noting that BNSF has accounted for 72% of the industry’s volume growth since it was formed in 1996.
In the years ahead, however, it’s clear that growth is not going to come from domestic coal as utilities turn to natural gas and renewable energy, Williams says. Agricultural business, meanwhile, is cyclical.
BNSF’s industrial development efforts, along with its plans to tighten relationships with short lines, are important components of the railway’s carload growth efforts, Williams says.
“But if the industrial economy is only growing at 0.6%, you’re fighting that flat industrial economy when it comes to growth,” he says. “And so when you think about offsetting that declining coal base, we … have to love intermodal and have that focus.”
Over the past 25 years BNSF has methodically trimmed its intermodal terminal network while adding lift capacity.
“We have 25% fewer intermodal facilities on our network than we did in the year 2000. But we’ve driven density across those newer facilities,” Williams says. “We’ve actually added a lot of lift capacity and so that’s enabled us to grow in a much more efficient manner.”
BNSF operates the three largest intermodal terminals in North America: Hobart in Los Angeles; Alliance just north of Fort Worth, Texas; and Logistics Park Chicago in Joliet, Ill., all of which can handle more than 1 million annual lifts. And over the past 10 years, BNSF has invested $1 billion for intermodal terminal expansion projects, and another $300 million on land acquisition adjacent to terminals.
The railroad handled all-time record intermodal volume in October amid a spike in international traffic off the West Coast, as well as strong domestic volume from partner J.B. Hunt.
BNSF boosted international intermodal capacity by 50% out of Southern California since this summer and with peak parcel season about to get under way, the railway has added 20% more expedited train departures, Williams says.
Meanwhile, the Quantum premium intermodal service BNSF launched last year with J.B. Hunt continues to grow while posting 95% on-time performance. “We continue to slowly adopt new customers,” Williams says. “Nobody who’s come in has walked away from that service. And we see this as a big growth opportunity for both of us as we go into 2025.”
BNSF last week expanded its Short Line Select program, launched in September with Genesee & Wyoming’s Alabama & Gulf Coast Railway, to include three more railroads. They are the Burlington Junction Railway, G&W’s Portland & Western Railway, and the Texas Northwestern Railroad.
“We love working with our short lines and I think we need to be better about that as we go into the future,” Williams says.
BNSF and participating short lines work together on business and industrial development opportunities, Williams says. They also aim to collaborate on interchange planning, resolution of interchange problems, and monitoring of car cycle times.
“Our shortline connections extend our reach by 20,000 miles and enable us to serve an additional 4,000 stations on our network. So these are clearly very important parts of our industrial growth outlook,” Williams says.
The program doesn’t yet involve creating single trip plans for cars that make interline moves with participating short lines. “It’s going to evolve,” Williams says of efforts to provide more seamless service.
Norfolk Southern and Canadian National also have begun similar programs to tighten integration with short line railroads.
Williams spoke at the RailTrends conference, which is sponsored by independent analyst Anthony B. Hatch and trade publication Progressive Railroading.
