(BRK.A), (BRK.B)
Nationwide unemployment in the U.S. is only five-percent, and the country has come a long way from the Great Recession, but the same can’t be said for BNSF Railway, which is laying off employees due to cratering coal and oil volumes.
BNSF is furloughing roughly ten-percent of its workforce, according to Chairman Matthew Rose, who spoke at the Montana Energy conference in Billings, Montana.
While the U.S. economy added some 215,000 jobs In March 2016, BNSF’s planned layoffs stand at roughly 4,600 personnel, some ten-percent of its workforce.
Lines of idled BNSF locomotives that are in storage on tracks in rail yards near Oklahoma City and Wichita, Kansas, are a visual reminder that 2016 car loads are down dramatically from 2015 levels.
BNSF’s total carloads for coal are down 32.86% year-to-date through March 28, 2016, for petroleum they are down 26.25%, and metallic ores carloads are down 33.44%.
Total carloads including intermodal freight are down 6.07% year-to-date from the same period in 2015.
Grain Shippers Benefit
BNSF has cut its price for shipping grain by $100 a carload. BNSF also cut the rates $75 per carload for shipping pulse crops, such as peas and lentils.
For BNSF, a tough year keeps getting tougher.
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.