Some 150 BNSF Railway locomotives are sitting idle on tracks between Rozet and Gillette, Wyoming, as BNSF’s 2016 shipping slump continues to worsen.
The locomotives, which are lined up in an almost endless train, are just one physical manifestation of a dramatic drop in demand for coal, petroleum, and metals.
For the year to date, total carloads are down a whopping 15.6-percent.
Coal shipments, which last year at this time had reached 233,205 carloads, are only at 165,689 carloads through February 7, 2016. The change represents a 28.95% decrease.
BNSF spokesman Matt Rose noted that the drop in carloads was not just due to coal, but cut across a number of sectors.
As he noted, it’s not just coal shipments that are lagging, as shipments of metal ores are down 35%, and shipments of iron and steel scrap are down 25.65%
With global oil prices in the doldrums, shipments of petroleum are down a dramatic 24.63%.
BNSF is not waiting for further poor results to trim its costs, and has already announced a 26% cutback in capital spending.
So far, it’s a hard winter for BNSF.
© 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.