FINANCIAL results for 2022 released by six of the seven major US freight railways reveal rising revenue as increased fuel costs are passed on to customers, while operating expenses have also been impacted by network congestion.

Norfolk Southern (NS) reported record operating revenue of $US 12.7bn, up 14% on 2021, which was driven by an 18% increase in revenue per unit.

At $US 7.9bn, operating expenses had increased by 19% compared with 2021, due to higher fuel prices, inflation, network congestion, and higher staff costs.

Union Pacific (UP) also reported a 14% increase in operating revenue to $US 24.9bn in 2022, driven by higher fuel surcharge revenue, core pricing gains, and volume growth. Business volumes, as measured in total revenue wagon loads, grew by 2%.

Revenue at CSX was up 19% at $US 14.9bn in 2022. The operating ratio, or proportion of operating revenue absorbed by expenses, was 59.5%.

Canadian National (CN) reported revenue up 18% at $C 17.1bn ($US 12.75bn), mainly attributable to higher fuel surcharge revenue as a result of higher fuel prices, freight rate increases and the positive impact of the weaker Canadian dollar.

Revenue was also boosted by higher volumes of Canadian coal exported via west coast ports and US grain. This was partly offset by lower international container traffic via Vancouver as a result of supply chain congestion and significantly lower export volumes of Canadian grain in the first half of 2022.

Operating expenses increased by 16% to $C 10.27bn, mainly due to higher fuel prices and the negative impact of the weaker Canadian dollar. The CN operating ratio in 2022 was 60%, an improvement of 1.2 points on 2021.

Revenue at Canadian Pacific (CP) was up 10% in 2022 at $C 8.8bn. Operating expenses were up 14.5% on 2021 at $C 5.48bn, with fuel costs up 63.9% at $C 1.4bn from $C 854m the year before.

Kansas City Southern (KCS) reported revenue of $US 3.37bn for 2022, up 14% on 2021. The operating ratio improved by 6.4 points from 70% in 2021 to 63.6%.

In Quarter 4 of 2022, locomotive fuel costs were $US 120.6m, up 40.7% from $US 85.7m in Q4 2021. The average cost per gallon of locomotive fuel across KCS operations in the US and Mexico was $US 2.72 in Q4 2021 and $US 3.58 in Q4 2022.

The January issue of IRJ looks in depth at US Class 1 growth prospects for 2023.