For fourth-quarter 2024, BNSF reported that results included a $290 million charge related to an agreement that was finalized with the International Association of Sheet Metal, Air, Rail and Transportation Workers – Transportation Division (SMART-TD), which allowed the Class I the ability to redeploy brakepersons to conductors and engineers. This, BNSF says, will allow the company to meet short-term hiring demands and provided employees with an expedited path to their new roles.
According to BNSF, fourth-quarter 2024 earnings benefited from “higher volumes, improved productivity and cost controls.” Excluding the one-time charge, operating income in the fourth quarter was $2.2 billion, an increase of $237 million (12%) compared to the same period in 2023. The adjusted fourth quarter operating ratio of 64.6% decreased 4.1% compared to the same period in 2023.
In addition to the fourth quarter labor charge, full year results also included a significant charge related to a judgement in an ongoing legal case, which BNSF has appealed, the Class I noted. Including the impact of these items, operating income of $7.5 billion increased $73 million (1%) compared to 2023 and our operating ratio improved 0.4% to 68.0%.
Total revenues for the fourth quarter and full year 2024 decreased 1% and 2%, respectively, compared with the same periods in 2023, BNSF reported Feb. 24. Average revenue per car/unit declined 7% in both the fourth quarter and full year 2024 compared with the same periods in 2023, “resulting from lower fuel surcharge revenue and business mix changes.” Volumes increased 7% in both the fourth quarter and full year 2024 compared with the same periods in 2023.
BNSF said revenue changes also resulted from the following:
- Consumer Products volumes increased 14% and 16%, respectively, for the fourth quarter and full year 2024 compared with the same periods in 2023. The volume increases were “primarily due to higher intermodal shipments from west coast imports and volumes from a new intermodal customer.”
- Industrial Products volumes increased 2% and decreased 1% for the fourth quarter and full year 2024, respectively, compared with the same periods in 2023. The full year decrease was “primarily due to lower aggregates, taconite, minerals, and waste shipments, partially offset by higher volumes in plastics and petroleum products. The fourth-quarter increase was primarily due to higher plastics, aggregates, and petroleum products, partially offset by lower volumes of taconite and minerals.”
- Agricultural Products volumes increased 2% and 7%, respectively, for the fourth quarter and full year 2024 compared with the same periods in 2023. The full year increase was “primarily due to higher grain shipments, renewable fuels and fertilizer shipments. The volume increase during the fourth quarter was primarily due to soybean shipments and oilseeds and meals, partially offset by lower volumes of non-soybean related grains.”
- Coal volumes decreased 10% and 18%, respectively, for the fourth quarter and the full year 2024 compared with the same periods in 2023. The volume decreases were “primarily due to lower natural gas prices, which displaces coal as a fuel used by utilities.”
Listed below are details by business units, including revenues and average revenue per car/unit.
According to BNSF, operating expenses increased slightly for the fourth quarter and decreased 3% for the full year 2024 compared with the same periods in 2024. A significant portion of the changes were due to the following factors:
- Fuel expense decreased 23% and 11% in the fourth quarter and full year 2024, respectively, compared with the same periods in 2023. The decreases were “primarily due to lower average fuel prices, partially offset by higher volumes.” Locomotive fuel price per gallon decreased 26% and 14% in the fourth quarter and full year 2024, respectively, compared to the same periods in 2023.
- Compensation and benefits expense increased 22% and 6% in the fourth quarter and full year 2024, respectively, compared to the same periods in 2023. Excluding the impact of the aforementioned brakeperson charge, compensation and benefits expense increased slightly by 1% in the fourth quarter of 2024 compared to the same period in 2023.
- Purchased services expense decreased slightly and by 13% in the fourth quarter and full year 2024, respectively, compared with the same periods in 2023. The decrease during the full year 2024 was “primarily due to lower purchased transportation driven by the sale of brokerage operations of BNSF Logistics, LLC and lower purchased services expense from Montana Rail Link, Inc. (MRL). Changes were not significant for fourth quarter compared to the same period in 2023.”
- Materials and other expense decreased 15% and 9% in the fourth quarter and full year 2024, respectively, compared to the same periods in 2023. The decrease during the full year 2024 was “primarily due to due to cost reductions across various spend categories and lower property taxes, partially offset by increased litigation costs related to an ongoing legal case with the Swinomish Tribe, which the company has appealed. The fourth quarter decrease was primarily due to cost reductions across various spend categories and lower property taxes.”
- There were no significant changes in depreciation and amortization or equipment rents.
- There were no significant changes in interest expense or other (income) expense, net.
BNSF’s 2024 capital program was $3.7 billion, which included activities that supported the Class I’s efficiency and long-term growth objectives while “ensuring it maintained a safe and reliable railroad,” the railroad noted. The 2025 planned capital program is $3.8 billion. The 2025 capital program, BNSF says, “continues to focus on projects supporting the Class I’s customers’ growth while operating a safe, efficient, and reliable railroad.”
According to BNSF, the largest component of the 2025 capital program, $2.84 billion, is devoted to maintenance, which ensures BNSF’s network “remains in top condition.” Investing in BNSF’s existing infrastructure, the Class I noted, “results in fewer unscheduled service outages that can slow down the rail network and reduce capacity.” Maintenance projects include replacing and upgrading rail, track infrastructure like ballast and rail ties, and maintaining rolling stock. It will consist of 11,400 miles of track surfacing and/or undercutting work and the replacement of approximately 2.5 million rail ties and 410 miles of rail.
$535 million of the 2025 capital program will be for expansion and efficiency projects, adding to the more than $2.6 billion invested in expansion projects over the past five years, according to the Class I. The expansion plans support BNSF customer growth by continuing to invest in facility and line expansion projects that will increase network capacity.
Major facility projects include:
- Completing a multi-year intermodal facility expansion project at BNSF’s Cicero Intermodal Facility in Chicago.
- Continuing property acquisitions and development activities for the planned Barstow International Gateway project in California.
- Starting development activities for a future intermodal facility in the Phoenix, Arizona area.
Major line expansion projects include:
- Continuing a multi-year project to construct approximately 20 miles of third main line track near Needles, California to increase capacity and improve service recoverability on its Southern Transcon route between Southern California and the Midwest and increasing siding capacity on BNSF’s mainline track near Phoenix, Arizona.
Additionally, $429 million of the 2025 capital program is for equipment acquisitions.
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