The document provides an overview of the rail industry and BNSF Railway. It discusses that railroads remain the backbone of America's freight transportation network, moving over 40% of all freight. It then discusses BNSF specifically, noting that it operates over 32,000 route miles and has approximately 38,000 employees. The document outlines the benefits of shipping by rail, including greater fuel efficiency compared to trucks, reducing highway congestion, and lower costs. It then discusses options for economic development related to rail, including using a transload facility or leasing/rehabilitating/constructing new track.

1. Replaced title type
BNSF Railway Company and photo
Rail 101
&
Economic Development
Grace Kung
Regional Economic Development Mgr
April 24, 2012

2. Agenda
 Industry Overview
 BNSF Overview
 Why Rail?
 Why Economic Development?
2

3. Rail Industry Overview
3

4. Industry Overview
America’s Railroad Industry
Railroads remain the backbone of America’s freight transportation network
 U.S. railroads operate over 140,000 miles of track and earn an
aggregate freight revenue of nearly $57 billion
 In the United States, railroads account for more than 40%* of all
freight (more than trucks, boats, barges or planes) *Measured in Ton Miles
 70% of all autos produced in America move by rail
 30% of all U.S. grain moves by rail
 65% of the coal is moved by rail which in turn produces half of
America’s electricity
 U.S. Railroads move enough:
 Wheat to provide every person with a loaf of bread 6 days/week
 Concrete to build 45 miles of new highway every day
North American railroads form the world’s most efficient and lowest-cost freight network
Source: American Association of Railroads (AAR) 4

5. Industry Overview
A key link in the U.S. Supply Chain
71% of America's GDP is driven
by the consumer
Seamless network of
manufacturers, retailers,
distributors, transporters,
storage facilities and suppliers
Rail delivers everything
Americans consume everyday:
 Cars and Combines
 Clothes and Shoes
 Stereos and TVs
 Food and Water
 Lumber and Steel
 Energy and Fuel
 … many others, such as
bread and cereal
5

6. Industry Overview
Types of Railroads
Class I
• Annual revenues in excess of $340M
• Operations range from 3,200 to 32,000
miles
• Typically concentrate on long-haul, high-
density intercity traffic lanes
• Seven Class I railroads in North America
Regional
• Operate at least 350 miles of track
• Earn $40 million or more in revenues
• 33 Regional railroads
Local Linehaul
• Operate less than 350 miles of track
• Generate less than $40M in operating
revenues
• 324 local linehaul railroads
6

7. Industry Overview
North America Rail Network
 Over 160,000 miles of
track
Over 165,000 railroad
employees
 BNSF operates more
than 32,000 miles of
track
BNSF
CN
CP
CSX
NS
UP
FXE
7

8. Industry Overview
Transportation Industry Challenges
Fuel Efficienc
y
Environmental Solutions
Highway Congestion
Challenges
Rail Capacity
rtage
Driver Sho
8

9. Industry Overview
Governing Bodies of The Rail Industry
• Association of American Railroads (AAR)
• Department of Transportation (DOT)
• Federal Railroad Administration (FRA)
• The Surface Transportation Board (STB)
• U.S. Customs
• Various State and Municipal Agencies
• Dept. of Homeland Security
9

10. BNSF Overview
10

11. BNSF Overview
“This is BNSF”
Video: “This is BNSF”
11

12. BNSF Overview
Our Vision
Our vision is to realize
the tremendous potential of
BNSF Railway by providing
transportation services that
consistently meet our
customers' expectations.
12

13. BNSF Overview
BNSF Network

14. BNSF Overview
BNSF: Size and Scope
 32,000 route miles in 28 states and two provinces
 Approximately 5,800 locomotives and 208,000 freight cars
 Employs approximately 38,000 people
 Operates an average of 1,400 freight trains per day
 Moves one fourth of the nation’s rail freight
 Serves all major ports on the West Coast and Gulf of Mexico
 If stacked end-to-end, all the intermodal loads shipped with BNSF
in one year would reach from Los Angeles to Shanghai 6 times.
 Leads rail industry in technological innovation
 Has one of the largest computer systems in the world to manage
our network operations 24 hours a day
14

15. BNSF Overview
Business Unit Breakdown
INDUSTRIAL PRODUCTS CONSUMER PRODUCTS
COAL AGRICULTURE
15

16. BNSF Overview
Industrial Products Breakdown
Building Materials Plastics Chemicals & Waste Minerals
Lumber PVC Acids Aggregates
Wallboard Polypropylene Intermediates Cement
Bricks Polystyrene Caustic Soda Clay
Roofing Materials Polyethylene Municipal Waste Sand
Food & Beverage Machinery Metals Petroleum Products
Beer & Wine Construction Equipment Pipe Diesel Fuel
Canned Goods Farm Equipment Sheet Biodiesel
Frozen Fish / Meat Transformers Structural Asphalt
Vegetables Generators Scrap Alcohols & Solvents
16

17. BNSF Overview
Carload Solutions – Direct Rail
Direct Rail - Primary access to the BNSF Network directly to/from
a customer facility
Carload Service – Rail transportation for
single or multiple carloads
 Direct connection into supply chain
 Excellent for multi-truck quantities of
commodities such as canned goods, steel,
lumber, paper, etc. (3+ truckloads per car)
Unit Train Service – Trainload movements of
freight from same origin and destination
carrying a single commodity
 Most efficient service
 Achieves optimal network velocity
17

18. BNSF Overview
Carload Solutions - Transload
Transload – Access to the BNSF carload network at the most
advantageous points through premium providers
Advantages
 Rail accessibility without a large capital
investment
 Access to numerous value-added services
Value – Added Services
 Cross docking
 Storage and forward storing
 Load consolidation
 Inventory management
To learn more: http://www.bnsf.com/customers/how-can-i-ship/door-to-door-transload/
18

19. BNSF Overview
Consumer Products Breakdown
Domestic and International Intermodal Automotive
Clothes Office Products Vehicles
Shoes Seasonal Products Parts
Personal Accessories Paper Products
Beauty Products Toys
Furniture Bicycles
Electronics Household Appliances
Groceries Pet Products
Home Décor Items Books
Sporting Goods School Supplies
19

20. BNSF Overview
Intermodal Services
Expedited Trailer Service
Domestic Only
 Fastest intermodal service in the industry
 Averages 700+ miles per day*
 Ideal for time-sensitive freight
Premium Container Service
International and Domestic
 Sustainable solution to price sensitive shippers
 Averages 400-500+ miles per day*
 Competitive daily schedules
*Measurement derived from cutoff at origin to availability at destination
Service schedules can be found at http://www.bnsf.com/bnsf.was6/siisweb/cntrl 20

21. BNSF Overview
Ag Breakdown
Grain Bulk Foods Other Grain Products
Wheat Sweeteners Oils
Barley Syrups Feeds
Corn Animal Products Flour
Soybeans Starch Specialty Grains
Milo Oilseeds & Meals
Malt
Fertilizer Ethanol
21

22. BNSF Overview
Coal Breakdown
Coal
Low Sulfur Coal (Powder River Basin)
22

23. Why Rail?
23

24. Why Rail?
Key Benefits
 Fuel Efficiency – On average, railroads are three or
more times more fuel efficient than trucks.
 Highway Gridlock Reduction – A typical train takes
the freight equivalent of several hundred trucks off our
highways.
 Cost Efficiency – In general, shippers pay less for
shipping freight via rail, rather than other forms of land
transportation.
 Environmental Friendliness – The EPA estimates that
for every ton-mile, locomotives emit roughly one-third the
amount of nitrogen oxides and particulates.
Source: AAR 24

25. Why Rail?
Fuel Efficiency
If just 10 percent of the freight that currently moves by truck were diverted to
rail, fuel savings would exceed one billion gallons a year
100  Trains move one ton of freight
90 an average of 495 miles on a single
80 gallon of diesel fuel, compared to
70
140 miles for a truck
60
50
 Freight trains have increased their
40
fuel efficiency by 80 percent in the
last 25 years
20 3
20 1
20 3
20 1
20 3
20 1
3
20 1
20 3
20 1
20 3
20 1
20 3
20 1
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
08
05
05
06
06
07
07
08
09
09
10
10
11
11
20
Baseline Pessimistic
Oil Prices
(WTI EST - $/BARREL)
Source: Global Insight--February 2008 Forecast and AAR 25

26. Why Rail?
Rail is 2-8 times more fuel efficient
than trucks
2.3x
Intermodal
4.3x
Indust. Prod.
5.5x
Ag
8.2x
Coal
*Based on a 1,500 mile truck haul

27. Railroads can help reduce
highway congestion
 BNSF is the largest intermodal
carrier in the world
 Each year, BNSF moves about
4.6 million containers and
trailers
 One BNSF intermodal train
removes more than 280 long-
haul trucks from our nation’s
highways

28. Why Economic Development?
28

29. Economic Development:
Shipping Options:
 Transload Facility
 Quickest Method
 Lease an existing track (private or rail Owned)
 Timeline maybe an issue
 Rehab an existing track
 Can be costly if a new switch is necessary
 New track construction
 Can be an expensive project
29

30. Economic Development:
Transload Option
30

31. Economic Development:
31

32. Economic Development:
Ship by Rail: 3 Simple Phases
32

33. Economic Development:
Ship by Rail: 3 Simple Phases
33

34. Economic Development:
Ship by Rail: 3 Simple Phases
34