BNSF Railway's second-quarter pre-tax earnings rose 13.9% to $2.06 billion on higher volume and revenue per load, parent company Berkshire Hathaway (NYSE: BRK-B) reported Saturday, according to FreightWaves.
Revenue increased 14.6% to $6.56 billion, while operating expenses rose 15.6% year over year as fuel costs surged 68%, FreightWaves reported. The railway's operating ratio — operating expenses as a percentage of revenue — came in at 65.4%, a 0.6-point deterioration from a year earlier.
Volume and revenue per unit
Quarterly volume rose 6.5%, while average revenue per unit increased 7.6%, primarily from higher fuel surcharge revenue, according to FreightWaves. The divergence matters for shippers: more loads moved, but each load generated more revenue because fuel surcharges track the 68% jump in fuel costs.
Segment results
Consumer products volume — which includes intermodal and automotive traffic — grew 9.3%. Berkshire said the volume growth was due to "higher intermodal shipments resulting from higher West Coast imports, market share gains, and tightening truck capacity."
"Higher intermodal shipments resulting from higher West Coast imports, market share gains, and tightening truck capacity." — Berkshire Hathaway, as reported by FreightWaves
Agricultural and energy products traffic rose 11.5% for the quarter, driven by higher grain exports, petroleum fuels, and oilseeds and meals, according to Berkshire. Industrial products volume increased 3.1% on higher steel, aggregates and cement shipments. Coal was the outlier, declining 7.9% "primarily due to plant retirements and lower demand, attributable to lower natural gas prices," Berkshire said.
| Segment | Volume change | Driver cited by Berkshire |
|---|---|---|
| Consumer products (intermodal, automotive) | +9.3% | Higher intermodal shipments from West Coast imports, market share gains, tightening truck capacity |
| Agricultural and energy products | +11.5% | Higher grain exports, petroleum fuels, oilseeds and meals |
| Industrial products | +3.1% | Higher steel, aggregates and cement shipments |
| Coal | -7.9% | Plant retirements, lower demand due to lower natural gas prices |
Intermodal and truck capacity
For freight forwarders and 3PL operators, the BNSF results confirm intermodal is capturing volume as truck capacity tightens. Berkshire's statement ties BNSF's consumer products growth directly to higher West Coast imports and market share gains — a signal that import-driven intermodal demand remains strong on the U.S. West Coast, according to FreightWaves.
Industry events
FreightWaves is promoting three upcoming industry events alongside the report: the Brokerage Compliance Symposium, the F3 Awards Dinner, and the F3: Future of Freight Festival, all in Chattanooga, Tennessee.
Watch list
- Fuel cost trajectory: BNSF's fuel costs surged 68% in the quarter, and fuel surcharge revenue drove the 7.6% rise in average revenue per unit; further fuel swings will show up directly in rail rates.
- West Coast imports: Consumer products growth of 9.3% was tied to higher West Coast imports; any shift in import flows will affect intermodal volumes.
- Truck capacity: Berkshire cited tightening truck capacity as a contributor to intermodal gains; continued tightness supports rail's market share.
- Natural gas prices and coal demand: Coal volumes fell 7.9% on lower natural gas prices and plant retirements; sustained low gas prices will keep pressuring coal traffic.
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