OMAHA, Neb. — BNSF Railway’s revenue and profits rose in the second quarter despite volume being down nearly 6%, Berkshire Hathaway, the railroad’s parent company, reported on Saturday.
The railroad’s operating income rose 7%, to $2.37 billion, as revenue grew 15%, to $6.45 billion. Earnings improved, Berkshire said, as revenue per carload and intermodal unit increased due to a combination of higher rates and fuel surcharge revenue as diesel fuel prices spiked.
BNSF’s operating ratio increased 2.8 points to 63.2% in the quarter as fuel expenses shot up 84%.
Volume was down across the board in the railroad’s four business units.
Consumer products volume, which includes intermodal and automotive traffic, declined 7.4% in the quarter. “The volume decreases were primarily due to lower international intermodal shipments resulting from supply chain disruptions, partially offset by modest increases in domestic intermodal and automotive volumes,” Berkshire said.
Industrial products traffic declined 3.9%. “The volume decreases were primarily due to a decrease in petroleum shipments related to lower demand for crude by rail and network challenges, with the decrease in the first six months partially offset by increased volumes in other product categories,” Berkshire said.
Agricultural products volume 3.2%. “The volume decreases were primarily due to lower grain exports, partially offset by higher volumes of renewable diesel and oil feedstocks,” Berkshire said.
Coal traffic declined 2.9%, which Berkshire said was primarily due to “network challenges.”
BNSF has been struggling with crew shortages on the Southern Transcon, its busiest route, which has led to congestion.
They reap these huge profits on the backs of labor and don’t even offer, at minimum, a cost of living raise for the last 4 years?
I mean do they eat lunch with demons and sup with Satan himself? It’s inhumane at least.
They do not sup with Satan because Satan has standards.
Any RR with 80% of its rail miles a monoply had better increase its revenue.
This has pretty much been the story for each of the “Big 4” reporting their 2Q2022 financials. Despite crappy service and lower volumes, they’ve all earned gobs of money.
If Michael Corleone was still looking for a “legitimate business” into which the family money could be funneled, there is no better candidate than a Class 1 railroad. 😏
Looks good in the short term but ya can’t shrink your way to greatness.
Didn’t work for passenger trains in the 1950’s, won’t work for freight trains 70 years later.
Anyone who knows the least bit about running a service business knows that when you’re in trouble, you go for increased cash flow, even if the cash flow falls short of profitability.