Both of America’s largest railroads, which play important roles in shipping goods to and from West Coast ports, reported an increase in profits during the first quarter of 2012.
BNSF Railway reported net income of $789 million for the first quarter, up almost 16 percent from the same period in 2011. The company’s overall revenue for the three-month period that ended March 31 was $4.9 billion, up 10 percent compared to a year ago.
The rise, the railroad says, is partially attributable to average revenue per car or unit increases for all business units due to higher rates and higher fuel surcharges.
BNSF's principal rival, Union Pacific, which is the No. 1 U.S. publicly held railroad, reported first-quarter revenue of a record $5.1 billion, up 14 percent a year earlier. The company’s first-quarter profit was $863 million, or $1.79 per share, a jump of 35 percent from a year-earlier profit of $639 million, or $1.29 per share.
The increased traffic and financial gains are being attributed to various factors, including coal demand; higher domestic intermodal volume driven by highway conversions to rail, and higher volumes of automotive shipments, driven by increased North American auto sales and dealerships rebuilding vehicle inventories.