Incomes and revenues dropped for the second quarter (Q2) of 2023, according to US-based freight rail network and carrier BNSF’s latest financial report.
The operating income during Q2 and H1 dropped by 24% and 17% respectively. The same trend was reported for total revenues and reflected the 11% decrease in volumes transported over both Q2 and the whole first six months of the year.
Despite a dip in Q2, the company’s average revenue per car increased by 6% in the first half of the year.
Both consumer and agricultural products dropped in the latest quarter, with international conditions affecting the US domestic market, according to the carrier.
Consumer products decreased across west coast imports, which had a knock-on effect on BNSF. This was compounded, the company said, by reduced spot rates in the trucking market.
The grain market continues to be volatile, largely due to Russia’s invasion of Ukraine and subsequent cancelling of its Black Sea grain export deal.
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This has led to a decrease in imports to the US, and therefore freight volumes. However, domestic production and internal trading have partially offset this loss, BNSF explained in its filing.
Market conditions also cut BNSF’s quarterly and H1 fuel bill significantly, as the oil markets stabilise after 2022’s peaks.
But although these savings were significant, the firm’s outgoings did not benefit to the same degree due to compensation and labour costs rising fast. BNSF’s wage bill rose 13% in Q2, thanks to both increased headcount and wage inflation, its filing explained.