Fuel surcharge revenues total $1 billion in Q4 2019, down 8% on quarter: STB

Houston — Fuel surcharge revenue for the seven Class I railroads totaled roughly $1 billion in the fourth quarter, down 8% from the previous quarter and down 25% from the year-ago quarter, Surface Transportation Board data showed Monday.

Fuel costs are typically one of the top three highest operating expenses for railroads. Fuel surcharges paid by shippers usually kick in when the average retail price of on-highway diesel fuel, as listed by the Energy Information Administration, breaks a certain strike price, which varies by railroad.

Fuel costs for the quarter were over $1.8 billion, flat from Q3 2019 and down 18.1% from Q4 2018.

Gallons consumed by the seven railroads, which include BNSF, CSX, Norfolk Southern, Union Pacific, Canadian National, CP, and Kansas City Southern, totaled over 873 million, down 2.5% from the quarter before and down 10.3% from the year-ago quarter.

The figure includes diesel for locomotive operations as well as gasoline costs for other operations and maintenance, including motor vehicles.

The average cost per gallon for the seven railroads was $2.11/gal in the fourth quarter, up 5 cents from the quarter before and down 20 cents from the year-ago quarter.

In addition, the average percentage recovered was 56.3% in Q4 for all the railroads.

On a full-year basis, the average cost per gallon for all seven railroads was $2.08/gal, while average recovery was 58.5% in 2019.

UP and CSX recovered the most with reclamation of 70.9% and 69.1%, respectively, during the quarter. During 2019, the railroads also had the highest recovery, averaging 73.8% for UP and 68.7% for CSX.

Compared with the other railroads, CSX and UP spent on the higher end for fuel during the quarter, paying, on average, $2.16/gal and $2.15/gal, respectively. Additionally, the railroads averaged the most for fuel over the full-year, of $2.12/gal for UP and $2.11/gal for CSX.

BNSF and CN, on the other hand, recovered the least in Q4 and the full-year. BNSF recovered 40.4% during the most recent quarter and 42.6% over 2019, while CN recovered 37.7% and 43%, respectively.

The railroads paying the least per gallon were in the fourth quarter were KCS, with $2/gal, and NS, with $2.03/gal. Over the full-year, NS and CP averaged the least at $2.03/gal and $2.04/gal, respectively.