meeting future demands - swars · meeting future demands. dave garin. ... 2013. 2014. u.s. gdp. ......
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Meeting Future Demands
Dave GarinBNSF Vice President, Industrial Products
Southwest Association of Rail ShippersFebruary 19, 2015
1
GDP GROWTH VS. U.S. RAIL GROWTH(growth compared to previous year)
Source: Association of American Railroads (AAR) and IHS Economics
RAIL INDUSTRY
+4.4% CAGR
GDP +2.2% CAGR
0%
2%
4%
6%
8%
10%
12%
2010 2011 2012 2013 2014
U.S. GDP U.S. Rail
Rail Demand has Grown Faster than the Economy
Increasing Volumes Support Continued BNSF Growth
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
7,500
8,000
8,500
9,000
9,500
10,000
10,500
11,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Units RTMs
2014 Units= 10,275
2006 Units= 10,637
Thou
sand
sM
illions
3
Product Mix Has Changed
Source: BNSF internal data
(2009-2013)
2009 2010 2011 2012 2013 2014
Other IPBuilding ProductsConstruction ProductsPetroleum Products
(2009-2013)INDUSTRIAL PRODUCTS
2009 2010 2011 2012 2013 2014
Automotive
International Intermodal
Domestic Intermodal
CONSUMER PRODUCTS
+70% +29%
BNSF TOTAL UNITS 2014 (in thousands) & PERCENT CHANGE
FROM 2009
Consumer Products
5,040+29%
Coal 2,270-5%
Agricultural Products
974+3%
Industrial Products
1,991 +70%
4
Analyzing Capacity Demands
• AIM (Assess, Improve & Maximize)• Consideration of four key constraint areas:
• People• Equipment• Line• Terminal
• Evaluation of a variety of scenarios determines the ultimate solution:
• Operational changes• Capital expenditures• Combination of both
5
Assessing the Network:Opportunity Management
Timely review of new business opportunities in existing and new lanes, as well as coordinating growth of new facilities
New Business Review (NBR) Process is about understanding shipping needs and evaluating impact on the network
Resource Capacity- Line- Power- Train- Terminal- Equipment- Interline Connections
CapacityService Design
Operations
ED Projects- Site Plans- Track Agreements- Land Leases- ITA- Engineering Review
Site ReviewLane Review
6
NBR Process Best Practices
BNSF and customers working together:
• Permitting Strategies• Early Collaboration on Facility Design• Open Lines of Communication• Sufficient Lead Time and Accurate Information
7
Building a Facility
THEN NOW• Single commodity• Manifest shipments only• Single, manual thrown switch• Mainline switching• BNSF switched
• Multi – commodity• Manifest and unit capable
operations• Multiple power switches with
switch heaters• Sufficient landing track for
mainline clearance of entire train• Product storage options• Private switching & BNSF
Locomotive Use• Positive Train Control (PTC)
GOALS - YIELD & EFFICIENCY8
Maximizing the Network
PEOPLE
+7,000
LOCOMOTIVES
RAILCARS
CAPACITY
*includes long-term leases and acquisitions
Maintenance Capital:
$2,615M
Expansion Capital:
$1,028M
Investing for Growth in 2014
612$3,643M
RECORD $5.5B INVESTED
* Includes acquired and renewed
7,500*
DOUBLE TRACK
82MILES
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BNSF’s 2015 Capital Commitment $6B
$2.9 billionCore Network & Related Assets
$1.4 billionLoco, Freight Car,
& Other Equip
$1.5 billionExpansion &
Efficiency
$200 millionPTC
Another Record Investment in 2015 to Meet Capacity Demands
48%
25%
23%
4%
Core Network and Related Assets
Expansion and Efficiency
Locomotive, Freight Car, and Other Equip
PTC11
With Added Capacity Comes Improved Performance
Source: AAR through January 9th, 2014.
BNSF Train Speeds – (Indexed Miles per Hour to June 2014*)Percent
-10123456789
101112
Diff
eren
ce fr
om J
une
2014
-4
Wee
k M
AVG
* - 4-week average of 5/31/14 through 6/27/14
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More Locomotives Reduces Trains Held for Power
0
20
40
60
80
100
120
140
160
180
Tota
l Tra
ins
Hol
ding
for P
ower
Source: BNSF Internal Data 13
Continuous Improvement in Safety and Reliability Through Maintenance
0
0.02
0.04
0.06
0.08
0.1
0.12
0
5
10
15
20
25
2008 2009 2010 2011 2012 2013 2014
Rail Joint Other Per MTM
BNSF’S RAIL-RELATED DERAILMENTS ARE AT ALL-TIME BEST LEVELS
30,133
25,94824,251 24,594
23,290 23,61821,308
2008 2009 2010 2011 2012 2013 2014*Includes Detected and Service Failed:Detail Fracture, Engine Burn Fracture, Transverse Fissure, Compound Fissure, Horizontal Split Head, Vertical Split Head, Crushed Head, Shelled/Spalled/Corrugated, Worn Rail, Piped Rail, Split Web, Broken Base, Welded Engine Burn Fracture, Boutet Weld, Orgotherm Weld, Boutet Wide-Gap, Orgotherm Wide-Gap, Thermite Weld, Pressure Gas Weld, Pressure Electric Weld & Ordinary Break.
DETECTION* OF RAIL AND WELD DEFECTS CONTINUE TO DECLINE
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Your business is important to BNSF.Our focus is serving you now
and in the future.
After safety, nothing is more important than returning service and velocity to our network.
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