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How Did BNSF Railway’s Carloads Fare against Rival Union Pacific?

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BNSF Railway’s carloads

BNSF Railway (BRK-B) operates in the Western United States and competes with Union Pacific (UNP). Its total railcars for the week ended December 31, 2016, rose 1.4% YoY (year-over-year) to ~82,000 units, as compared to ~81,000 units in the corresponding week a year ago.

Carloads other than coal and coke jumped 4.1% to 51,000 plus in the week ended December 31, 2016. The percentage rise in BNSF’s overall carloads that week was less than the percentage surge reported by rival UNP.

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Why coal matters to BNSF

BNSF Railway’s coal and coke railcars declined 2.6% in the week ended December 31, 2016, on a YoY basis. However, for rival UNP, the same was a rise of 5.3% in the same category. Coal transportation contributed nearly 22% of freight revenue in 2015 for BNSF, the Berkshire Hathaway–controlled largest US Class I railroad.

Notably, nearly 90% of its coal tons originate from the Powder River Basin in Wyoming and Montana. Major coal producers operating in that area include Alpha Natural Resources (ANR) and bankruptcy-declared Peabody Energy (BTU). Overall, environmental concerns and competition from natural gas (UGAZ) have hampered incremental coal shipment prospects for coal producers (ARLP) in 2016.

Progressing and regressing commodity groups

The main front-runner commodities for the week ended December 31, 2016, were as follows:

  • sand and gravel
  • motor vehicles
  • farm (no grain)
  • motor vehicles

Commodities that witnessed backward movement included the following:

  • metallic ores
  • pulp and paper
  • petroleum
  • forest products

In the next part, we’ll look at BNSF Railway’s intermodal traffic.

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