BNSF's grain shuttle reduction sparks higher bids but improves service metrics

According to the U.S. Department of Agriculture, Agricultural Marketing Service's Grain Transportation Report released on November 21, 2024, BNSF Railway, the largest grain transporter among Class I railroads, stirred the grain transportation market with its recent decision to reduce its grain shuttle fleet from 155 to 140 trains. This move, implemented in August 2024, has led to significant changes in shuttle auction results, shipper reactions and service impacts.

The reduction, partly aimed at improving service, has resulted in shippers bidding up shuttle values in recent auctions. Since May 2024, when BNSF announced the cut, six auctions have been held, allocating the total fleet of 140 shuttles from August 2024 through June 2025. These auctions have generated $130.6 million in total revenue for BNSF, with an average premium of $932,000 per shuttle - a substantial increase from the 2021-2023 period when the average premium was $113,000.

Shippers initially expressed concern about the reduction. On May 31, three State grain associations wrote to BNSF, worried about "inflated shuttle values with no guarantees of service improvement." They requested BNSF to reconsider the decision or make the auction process more transparent and accessible to smaller shippers.

BNSF defended its decision, stating it was based on extensive customer consultations and aimed at streamlining the shuttle fleet to improve service. The railroad disputed claims of shuttle-capacity shortages, noting that 140 shuttles align with longer-term historical averages.

Contrary to concerns, BNSF's service metrics have shown improvement during the 2024 harvest season. Over the last 10 weeks from September through early November, BNSF's grain carloads in shuttle/dedicated service were 8% above the average for the prior three years, despite the reduced fleet. Additionally, grain carloads in other service categories increased by 41% from the three-year average.

Service metrics from the Surface Transportation Board indicate better performance this harvest season compared to previous years. Unit grain train speeds were up 1% compared to the three-year average, and BNSF's monthly average shuttle turns to the Pacific Northwest in September and October were 7% above average.

However, the secondary market for shuttles has seen high values, reflecting increased demand following the fast-paced 2024 harvest. October placements of BNSF shuttles averaged nearly $1,300 per car, 70% higher than the previous year, peaking at almost $1,800 in mid-September.