- Unconventional Ag
BNSF Regains Market Share for Grain and Ag from Union Pacific
BNSF Railway has regained the grain and ag shipping market share that it lost to Union Pacific last year when it faced difficulties in keeping pace with customer demand.
Despite outspending Union Pacific in previous years, BNSF lost a 4% market share for shipping grain, fertilizers, and agricultural goods in the first quarter of 2014 after being overwhelmed by a jump in crude oil shipments and record grain crops.
“We lost it and gained it all back in a very short period of time,” vice president for agricultural products at BNSF, John Miller told Bloomberg in a telephone interview. “A lot of BNSF shippers that had to find other ways to ship during our more challenging times have come back to us.”
BNSF’s inability to keep up with its shipping commitments last year led to the railway losing 1.2% of market share for all products in the western U.S., bringing its overall market share to 48.3%, while Union Pacific posted a carload growth of 6.7% in 2014.
The new year however, has seen a turnaround. In the first 14 weeks of 2015 BNSF’s grain carloads increased 27% with agricultural goods, accounting for 19% of the railroad’s revenues, while Union Pacific’s fell by 3%, according to the Association of American Railroads. After spending $5.5 billion in 2014 to build new tracks, buy locomotives and increase its workforce, BNSF increased its market share in the first quarter of 2015 for agricultural products to 50% and its market share for grain to 58% - up from 51% last year.
BNSF’s spending seems to have had the desired outcome. Trains speeds have increased from 21.2 miles per hour to 24 miles per hour, railcar dwell times have decreased 15% to 25 hours, the railroad is moving 2.8 trains of 110 cars each to the Pacific Northwest per month, and the railway has added 75 miles of track to its route through North Dakota and Washington.