OMAHA, Neb. — BNSF Railway’s profits, revenue, and volume all declined in the third quarter, parent company Berkshire Hathaway reported on Saturday.
BNSF’s pre-tax earnings fell 14.6%, to $1.6 billion, as revenue declined 12.4%, to $5.6 billion. The railway’s operating ratio increased 0.7 points to 68.4%.
Overall volume declined 4.8% in the quarter, while average revenue per carload and intermodal unit fell 7.1% due to a combination of lower rates and lower fuel surcharge revenue.
Consumer products volume — which includes intermodal and automotive traffic — was down 6.6%. “The volume decreases were 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. These decreases were partially offset by an increase in automotive volume from higher vehicle production,” Berkshire said.
Industrial products traffic was up 0.7% for the quarter. Berkshire said this was “primarily due to increased demand for construction products from infrastructure demand, partially offset by lower demand for plastics, chemicals and sand.”
Agricultural shipments declined 2.9%. “The volume decreases were mainly due to lower grain exports, partially offset by higher volumes of domestic grains, renewable diesel, feedstocks and oilseeds and meals,” Berkshire said.
Coal volume declined 5.8%. “The volume decreases derived from moderating demand attributable to lower natural gas prices and weather-related impacts,” Berkshire reported.
While the U.S. economy appears to have dodged the “inflation” bullet thus far this year, clearly, consumer demand is slowing down, 5% – 3rd quarter GDP growth notwithstanding. Declining consumer demand is clearly affecting rail intermodal volumes as noted in this article.
Lots of domestic and international uncertainty going forward to further dampen consumer confidence …..