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 But in addition to hiring more than 7,000 new workers and spending
$5.5 billion on improvements to its 32,500-mile (52,300 kilometer)
network, the railway also has done something unexpected: it pulled
thousands of rail cars off its lines.
The strategy appears to have paid big dividends this winter, helping
ease congestion on tracks and speed up traffic, according to a
Reuters analysis of weekly data the industry supplies to the U.S.
Department of Transportation.
BNSF <BRKa.N> rail cars that were stuck at terminals for an average
of 35 hours last winter are now back on the tracks in less than a
day. The trains are also moving 15 percent faster than they did last
year, reducing critical travel times, data shows.
"BNSF disappointed many of its customers," Berkshire Hathaway CEO
Warren Buffett said in a letter to shareholders last month about
last year's performance of one of North America's top railroads.
"However, our outsized expenditures are beginning to show results."
The railway's metrics, which have not been previously reported, have
improved markedly this winter, reflecting less congestion, increased
investments and weaker demand from the oil and agricultural
industries. Since October, BNSF has cut its number of cars by 9
percent to just under 237,000, whereas the rest of the industry grew
by 0.4 percent.
Anthony Hatch, owner of New York-based transportation consultancy
ABH Consulting says all rail operators struggle to strike the
balance between the number of cars on the tracks and freight
volumes. BNSF is the only major U.S. rail operator, though, to cut
the number of cars in the past two years.
MORE WITH LESS
In its latest report, BNSF showed strong year-over-year increases in
the number of carloads of grain and petroleum products hauled during
the first two months of 2015 combined with double-digit declines in
container and trailer volumes.
BNSF spokesman Mike Trevino said that improvements, such as building
extra tracks and sidings, essentially allowed fewer cars to move the
same amounts of freight.
“We did some things operationally that allowed us to take cars off
the railroad while still being able to generate the same or better
number of movements," Trevino said.
Other major rail carriers also have spent billions on upgrades and
bigger workforce, but none has reduced car counts or seen as
dramatic improvements in travel speed and the time cars spent in
terminals.
CSX, which last year carried about a quarter of BNSF's crude load,
reported relatively steady car dwell times. Canadian Pacific, which
faced similar criticism as the much larger BNSF, saw small overall
decreases in dwell times.
CSX spokeswoman Melanie Cost said the company has hired 1,900
frontline employees in 2014, bought new locomotives and upgraded
lines where crude oil traffic has soared to ease capacity
constraints and improve performance.
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BNSF's geographical focus on the nation's Corn Belt states, along
with North Dakota, a leading shale oil and grain producer, means it
struggled more than its peers to keep up with demand generated by
the oil boom and bumper crops.
The stress, aggravated by a series of paralyzing winter storms, led
to nagging delays that plagued major shippers and triggered scrutiny
from U.S. lawmakers and regulators.
One refiner, Philadelphia Energy Solutions, was hit so hard by the
delays last year that it ordered a half-dozen extra tankers of crude
before the start of this winter season.
This year, however, the extra reserve proved unnecessary, leaving
the laden tankers idling offshore for months, according to a trader
with knowledge of the situation. The company would not comment on
its supplies.
Other big customers are also taking note of the improvement in areas
served by BNSF, which pledged further $6 billion for capital
maintenance in 2015 touting it the biggest amount ever invested in a
single year by a North American rail company.
“Rail was a lot better this year. We didn’t see the delays," said
Mark Formo, president of the North Dakota Grain Growers Association.
"In fact, we saw cars showing up for deliveries a day early.”
In a February survey by the Soy Transportation Coalition all
respondents said cycle times – how long it takes a train to pick up
a shipment, deliver it and return – have improved from last year.
To be sure, some customers primarily credit fewer weather-related
disruptions and cooled demand for oil-by-rail and grain shipments
for better service.
"To me it's market driven," said Brian Hammerbeck, president of
Dakota Mill & Grain. "Prices are down, and you have farmers keeping
more of it, so it's a much different environment."
ABH's Hatch says, however, many factors were at play, including rail
operators' determined push.
“Weather helped, money helped, focus helped, time helped.”
(Reporting By Jarrett Renshaw; Editing by Tomasz Janowski)
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