Berkshire's railroad revamps service with billions, fewer cars
By Jarrett Renshaw
NEW YORK (Reuters) - Stung by customer backlash over last winter's patchy service, Berkshire Hathaway's BNSF Railways invested billions in shoring up its operations.
But in addition to hiring more than 7,000 new workers and spending $5.5 billion on improvements to its 32,500-mile (52,300 kilometer) network, the railway also has done something unexpected: it pulled thousands of rail cars off its lines.
The strategy appears to have paid big dividends this winter, helping ease congestion on tracks and speed up traffic, according to a Reuters analysis of weekly data the industry supplies to the U.S. Department of Transportation.
BNSF rail cars that were stuck at terminals for an average of 35 hours last winter are now back on the tracks in less than a day. The trains are also moving 15 percent faster than they did last year, reducing critical travel times, data shows.
"BNSF disappointed many of its customers," Berkshire Hathaway CEO Warren Buffett said in a letter to shareholders last month about last year's performance of one of North America's top railroads.
"However, our outsized expenditures are beginning to show results."
The railway's metrics, which have not been previously reported, have improved markedly this winter, reflecting less congestion, increased investments and weaker demand from the oil and agricultural industries. Since October, BNSF has cut its number of cars by 9 percent to just under 237,000, whereas the rest of the industry grew by 0.4 percent.
Anthony Hatch, owner of New York-based transportation consultancy ABH Consulting says all rail operators struggle to strike the balance between the number of cars on the tracks and freight volumes. BNSF is the only major U.S. rail operator, though, to cut the number of cars in the past two years. Continued...