BNSF Q1 coal revenues, volumes decline on cheap gas prices, mild winter

Houston — BNSF Railway reported a decrease in coal volumes and revenue in the first quarter of 2020, due to low natural gas prices, mild winter weather and plant retirements.

The Fort Worth, Texas-based railroad reported Q1 coal volumes of 384,000 carloads, down from 464,000 carloads in the prior quarter and 416,000 carloads in the year-ago quarter, according to its Q1 earnings report filed Monday with the US Securities and Exchange Commission. It was the lowest coal volumes in a first quarter in over 10 years.

Of the total 2.34 million carloads reported in Q1, coal volumes represented 16.4%, down from 18.3% in Q4 and 16.9% in the year-ago quarter.

In the first quarter, coal revenues totaled $766 million, compared with $967 million in Q4 and $869 million in the year-ago quarter.

Coal's average revenue per unit (RPU) totaled $1,995/car in Q1, down 4.3% from $2,084/car in Q4 and 4.5% lower than $2,089/car in the year-ago quarter. It was the lowest RPU in a first quarter since $1,943/car in Q1 2016.

BNSF reported total operating Q1 revenues of $5.41 billion, down 6% year on year, while total RPU was at $2,200, down 1% from a year ago.

The railroad, which is privately held by investor Warren Buffett's Berkshire Hathaway holding company, transports the most coal in the US, primarily from the Powder River Basin. In 2019, the railroad delivered 1.8 million carloads of coal, while generating $3.72 billion in coal revenues, down 5% and 7%, respectively, on the year.