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New arena at Will Rogers takes shape


The proposed Will Rogers Memorial Center arena continues to take shape as voters head for a Nov. 4 election to decide whether to approve new taxes to help pay for the $450 million facility.

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Buffett's BNSF loses freight to Union Pacific amid rail delays

Photo courtesy of BNSF

Thomas Black
(c) 2014, Bloomberg News.


DALLAS — BNSF Railway Co., the only U.S. railroad ordered by the regulator to provide weekly service updates, is losing market share to Union Pacific Corp., its main competitor, as train speeds slow and on-time deliveries drop.

The shift in market share had shown up in carload statistics, Union Pacific Chief Executive Officer Jack Koraleski said Thursday. During the second quarter, the Union Pacific's loads rose 8.2 percent while those of BNSF, owned by Warren Buffett's Berkshire Hathaway Inc., gained 4.9 percent.

"There are some places where we've been able to pick up some share," Koraleski said on a conference call with analysts Thursday. "We're hopeful that that has some stickiness to it and that that business will hang with us even as the BNSF recovers."

Railroad service operations across the United States have suffered after harsh winter weather earlier this year coupled with a surge in cargo to create a freight knot that's still being untangled. BNSF, based in Fort Worth, Texas, was affected most among U.S. rails because its network bore the brunt of a bumper grain crop and the exponential growth of crude oil from the Bakken oil fields in North Dakota.

Both Union Pacific and BNSF are the only two large U.S. railroads that operate west of the Mississippi River with BNSF servicing more states to the north.

In June, the U.S. Surface Transportation Board ordered BNSF and Canadian Pacific Railway Ltd. to report plans for resolving delayed grain shipments. BNSF said in its weekly status update that it has 6,329 past-due rail cars mostly in North Dakota, Montana and South Dakota that were an average 24.2 days late as of July 17.

Union Pacific, the largest publicly traded U.S. railroad, has benefited most from BNSF's difficulty working off the backlogs for grain and other goods, said Allison Landry, an analyst with Credit Suisse in New York. Union Pacific earlier reported quarterly sales that jumped 10 percent to a record $6.02 billion, slightly ahead of analysts' estimates.

"The question is how long will this traffic stay with UP and will some of it be permanent," said Landry.

Mike Trevino, a spokesman for BNSF, declined to comment on the company's market share. The railroad hasn't yet filed its second-quarter earnings report.

BNSF CEO Carl Ice said in April his railroad would need until the end of this year to work out the traffic jam and bring service back to normal levels. The railroad, based in Omaha, Nebraska, plans to add 500 locomotive and 5,000 railcars to help ease the congestion, he said.

For the week ending July 18, Union Pacific had train speeds of 24.1 miles per hour while BNSF's ran at 21.3 mph.

The market share shift has been most pronounced for grain and intermodal, which are cars loaded with general merchandise that are transported by ship, truck and rail, Koraleski said in a telephone interview today. There's no way to calculate how much freight volume that has migrated to Union Pacific, he said.

Union Pacific has a one-time shot to win over new customers before BNSF works out its congestion problems, he said.

"We're very hopeful that when the time comes when the BNSF is back strong again that they'll like what they've seen from us and continue to keep the business with us," Koraleski said.

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