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BNSF Railway Co. today reported fourth-quarter 2020 revenue decreased 3% to $5.7 billion, but operating income rose 3% to $2.2 billion and net income climbed 5% to $1.5 billion compared with 2019's financial results.
The Class I attributed the lower revenue primarily to a 3% decrease in unit volume and a 6% decrease in average revenue per car, BNSF officials said in a financial performance summary posted on the Class I's website.
Operating expenses for the quarter fell 6% year over year to $3.5 billion. The Class I posted a Q4 operating ratio of 60.3% compared with 62.8% in Q4 2019.
Also during Q4 2020 compared with Q4 2019:• Consumer products volumes climbed 13%, and e-commerce activity led to intermodal volume increases, as well.• Industrial products volumes fell 12%, a trend driven primarily by the decline in U.S. industrial production during the pandemic.• Agricultural products rose 15%. Grain and meal exports continued to remain strong, while other volumes recovered from the impacts of the pandemic.• Coal volumes plummeted 21% due to lower natural gas prices, lower electricity demand, utility coal plant retirements and mild temperatures.
This year, BNSF has planned capital expenditures of $2.99 billion, down from $3.08 billion last year. The 2021 plan is focused on supporting the Class I's growth and efficiency objectives, as well as safety. This year, the maintenance and replacement component is expected to be $2.41 billion. Projects included in this part of the plan mostly entail replacing and upgrading rail, as well as rail ties and ballast, along with maintaining rolling stock.
Other capex plans call for nearly 11,000 miles of track surfacing and/or undercutting work and the replacement of 428 miles of rail and 2.6 million ties.
BNSF will spend about $400 million on expansion and efficiency projects. For example, on the Southern Transcon between the West Coast and Midwest, BNSF will continue a multiyear effort to add several segments of new double-track in eastern Kansas. Once completed, BNSF will have 50 miles of additional main track to support traffic growth.
In addition, in the Pacific Northwest, BNSF will continue its multiyear bridge project near Sandpoint, Idaho, to increase train capacity.
About $180 million of this year's capital plan will go toward acquiring freight cars and other equipment.