BNSF (NYSE: BRK) has closed a maintenance facility in Glendive, Montana, amid customers’ changing business conditions and lower demand projections for railcars to ship commodities such as coal and energy.
The facility closed on July 7, impacting 85 jobs, BNSF confirmed. About 70 positions will remain in the community, the privately owned railroad said.
“Similar to the size of our train, yard and engine workforce, our mechanical teams must match the demand for traffic moved by our railroad. With volumes lower than anticipated due to several factors, including changes in the coal and energy sector, the number of railcars and locomotives moving on our network and thus repairs needed have decreased,” BNSF said.
The railroad is working with those whose jobs were impacted, including providing an option to transfer to open positions in other locations of BNSF’s network.
Although Montana’s coal production grew by nearly 10% in the first quarter of 2020 to 7.8 million short tons compared with the first quarter of 2019, western U.S. coal production overall has fallen by 11.6% to 83.6 million short tons during that same time frame, according to the U.S. Energy Information Administration. Western coal production, which represented about 56.1% of total U.S. coal production in the first quarter, has been facing a systemic decline amid cheap natural gas prices and tighter environmental controls.
Despite the maintenance facility closure, BNSF said it is still investing in capital projects on its northern corridor that spans the Pacific Northwest to Chicago. One of the projects is the construction of a second rail bridge adjacent to an existing bridge in Sandpoint, Idaho.
After the second bridge is completed, trains will be able to run in both directions instead of running on the existing single track.
These “upgrades will reduce congestion and help move our current freight traffic and future volumes more efficiently; this benefits all the products we carry and the passenger trains that run on our main line,” BNSF said.
BNSF has invested about $7.8 billion in the northern corridor over the last seven years.