BNSF cites strong crude, domestic intermodal volumes as key 3Q drivers

Continued strength in the crude oil and domestic intermodal sectors helped BNSF Railway Co. offset weak grain traffic and boost revenue in the third quarter, according to a 3Q performance summary recently posted on the Class I's website.

BNSF's traffic increased 5 percent to 2.6 million carloads compared with third-quarter 2012's total. Industrial products volume climbed 9 percent to 485,000 units; consumer products volume rose 6 percent to 1.3 million units; coal volume increased 5 percent to 605,000 units; and agricultural products volume declined 5 percent to 239,000 units.

The Class I's total quarterly freight revenue increased 5 percent to $5.4 billion, while total operating revenue rose 6 percent to $5.6 billion, the summary states.

By sector:
• industrial products revenue jumped 12 percent to $1.5 billion primarily because of increased petroleum product shipments driven by increased crude unit-train loadings;
• consumer products revenue climbed 6 percent to $1.8 billion primarily due to higher domestic intermodal volumes as a result of highway-to-rail conversions;
• coal revenue rose 5 percent to $1.3 billion primarily because of increased demand resulting from higher natural gas prices and reduced utility stockpiles; and
• ag products revenue fell 5 percent to $845 million due to lower grain exports as a result of the extreme U.S. drought in 2012 and strong global competition.

Via the summary, BNSF also reported that 3Q operating income increased 4 percent to $1.7 billion, net income climbed 6 percent to $989 million, operating expenses rose 6 percent to $3.9 billion and operating ratio inched up 0.3 points to 68.6 versus the same 2012 period.

An operating expenses breakdown shows that fuel costs rose 5 percent to $1.1 billion, compensation and benefits costs increased 4 percent to $1.2 billion, and purchased services costs ratcheted up 3 percent to $618 million. The price of locomotive fuel per gallon increased 1 percent in the third quarter, the summary states.