Here’s What Led BNSF Railway’s Growth in Carloads

BNSF Railway (BRK-B) is Berkshire Hathaway’s mammoth freight rail carrier and operates in the Western United States, closely competing with Union Pacific (UNP). BNSF Railway’s total carloads excluding intermodal grew 4.7% in the week ended July 8, 2017. It moved ~89,500 railcars that week, compared with nearly 85,500 railcars during the corresponding week of 2016.

Railcards other than coal and coke rose 1.2% YoY (year-over-year) to ~51,000 units in the 27th week of this year, compared with ~51,000 railcars in the same week of 2016. BNSF Railway registered strong volume gains percentage-wise compared with overall US railroads’ (IYJ) 1.1% rise in carloads.

Coal (ARLP) and coke railcars, which accounted for 43% of BNSF Railway’s total carloads, saw a ~10% volume gain last week. The company hauled ~38,000 coal (ANR) and coke carloads, compared with ~35,000 railcars last year. BNSF Railway’s coal and coke volumes in the same week were up, while rival UNP saw a slump in this category.

According to the EIA (US Energy Information Administration), in 2017, “growth in coal-fired electricity generation and exports are expected to lead to an increase of 57 MMst (8%) in total US coal production.”

On the coal consumption front, the EIA stated: “Electric power sector coal consumption is forecast to increase by 9 MMst (1%) in 2017, mostly because of rising natural gas prices. In 2018, demand for coal in the power sector is expected to increase by 2 MMst.”

The commodities that posted higher volumes last week were:

• chemicals
• motor vehicles
• metallic ores
• sand and gravel
• iron and scrap

The commodity groups that saw volume declines were:

• grain
• petroleum
• stone, clay, and glass
• pulp and paper

Continue to the next part for an update on BNSF Railway’s intermodal volumes.