Ahead of third quarter financial results analysts are projecting that the nation’s freight carriers will see a reduction in net income, which will cause an erosion of share values. The projected decreases in shareholder value ranges from 5.5 per cent for Norfolk Southern to 1.5 per cent for Kansas City Southern. Results for Mr. Buffett’s railroad are not reported.
The culprits appear to be a warmer than normal winter and a switch by the nation’s power plants to natural gas where possible, thereby resulting in a reduction of coal shipments.
Western coal loading has been down since 2008 - This is not something brought on by a warm winter. Eastern coal seems to have found a new export market, but has still not recovered.
Intermodal traffic has increased over last year, and has been a reason the western railroads have been weathering the coal loading ‘slump’ so well.
BNSF financial performance information is still published:
Net Income is up 16% for the 2nd quarter, and is about the same over the past year to year. Bakken oil and frac sand loading has been sky high for both BNSF and CP… It’s a good time for most railroads.
I think your statement is worth repeating: “Intermodal traffic has increased over last year, and has been a reason the western railroads have been weathering the coal loading ‘slump’ so well.”
It seems pretty clear intermodal freight is becoming increasingly important to our railroads.
BNSF might be loading less coal, but they are loading a heck of a lot more oil.
Here in Richardton, Haliburton has purchased 300 acres between the tracks and I-94 and are planning on building a bulk handling facility able to empty trains on a loop without having to break up a train. They will be bringing in sand and chemicals for fracking in the oil fields.
This is of course a concern to us here in town. beyond the interstate, paved roads here abouts are 20 miles or more apart. County roads (if paved at all) and state roads in this area are simple two way streets about 40’ wide.
A 100 car freight train will translate into 200 to 300 tractor-trucks riding on our streets. Still the “City” of Richardton is looking forward to a new major business in its tax base.
Coal is down - mostly due to natural gas conversion. Merchandise is down - the economy is flat, at best. Intermodal is up but not enough to make up the gap. Fuel surcharges down compared to last year.
The analysts’ projections were taken from a Reuters report. They did not include the expectations for BNSF because, I assume, BNSF is no longer an independent company and, therefore, does not have any common or preferred shares outstanding, unless there are some minority shares.
I appreciate the reference to the BNSF financial information. I see that they are still filing SEC reports, which is helpful to us accounting types.