T h e e m p l o y e e m a g a z i n e o f T e a m B n S f m a r c h / a p r i l 2 0 0 6

Velocity to Improve Performance

In 2006, the focus will be on velocity, including business process redesign, to handle the additional business that

is coming BNSF’s way.Page 2

Capital Commitments to Match Future Growth

In 2006, BNSF has a $2.4 billion capital commitment program,

an increase over 2005’s, to meet anticipated future volumes.

Page 6

2005 BNSF Safety PlateThis limited-edition “BNSF ~ 10 Years and Rolling ~ 1995-2005” Safety Plate shows a BNSF stack train, its lead locomotive featuring the new logo and paint scheme, which were created last year to honor BNSF’s 10th anniversary. The photo was taken by Dave Busse near Cajon Pass in Southern California. Safety plates will be shipped soon to every active BNSF employee who worked all year in 2005 without a reportable injury.The BNSF 2005 Annual Report is now on the Web. To view it, go to

http://www.bnsf.com/investors/annualreports/2005annrpt.pdf

RAIlWAy STAFFVP, Corporate Relations Richard Russack

editor: Marietta Collins

associate editor: Susan Green

contributing photographers: Howard Ande, Patti Hoffmann, Chuck Gierhart and Tim Schoon

GOT A STORy IDeA? Send story ideas to BNSF Railway Editor, via Outlook to: Communications, Corporate, or send by Internet to: marietta.collins@bnsf.com, or susan.green@bnsf.com. Or mail to:BNSF Corporate RelationsP.O. Box 961057Fort Worth, Texas 76161-0057

ADDReSS CHANGeS employees: To review your address, call company line 435-3345 or dial 1-800-274-6739 or review and change your address online via BNSF ‘s Intranet site at employee.bnsf.com. Go to the My Self page, Life Events and click on Change of Address. Or you may complete and return a Personal Information Change Form (#12796) to the administrative office; mail it to Human Resources Information Systems, P.O. Box 961055, Fort Worth, Texas 76161-0055; or fax it to 817-352-7109.

retirees: Send address changes and requests to receive Railway after you retire to BNSF Corporate Relations, P.O. Box 961057, Fort Worth, Texas 76161-0057. Please include your Social Security number.

Our vision is to realize the

tremendous potential of BNSF

Railway Company by providing

transportation services

that consistently meet our

customers’ expectations.

� RAIlWAy I MARCH/APRIL 2006

ON THe COVeRPhoto by Clarke Sutphin taken near Myers, Mont.

“Building more double- and triple-track and acquiring more locomotives and freight cars alone are not enough to accommodate future growth,” Rose continues. “We must also expand capacity by more efficiently using all of those assets.” Rose explains that improving locomotive and car velocity are the keys to BNSF achieving the service and capacity needed to handle the forecasted growth for 2006 and beyond.

But what does velocity mean? Is it simply speed, such as operating equipment faster, or something more? “It is speed, but it’s also cycle time, improving the turns we get out of equipment,” says Carl Ice, BNSF’s executive vice president and chief operations officer.

By that standard, increasing the number of turns BNSF’s equipment makes in a specific period of time could have a sweeping impact across a broad range of performance categories. For example, improving locomotive and freight car velocity will generate additional capacity, improve the availability of equipment to serve customers, enhance the consistency and reliability of BNSF’s service (thus raising customer satisfaction), and boost BNSF revenue, efficiency and returns to shareholders.

Velocity MeasuresTo help Team BNSF focus the entire railway on velocity in 2006, six key velocity measures

have been identified:1. Locomotive: unit miles per day2. Merchandise Car: car miles per day3. Ag Car: car miles per day4. Coal: cycle-time index5. Intermodal: stack transit days (cutoff to availability)6. Intermodal: trailer transit days (cutoff to availability)“There’s not going to be one big thing that provides the improvements we need,” says Ice in explaining

why these six measures were selected. “Our on-time performance is not where it needs to be, and expanding capacity has become important to our ability to handle those volumes and to improve on-time performance and the reliability of our service. These six new goals will help us attack and impact velocity. [They] build on measures that already exist and that have been used in the past,” says Ice.

Take the measure for locomotive unit miles per day. Increasing the velocity of each locomotive in BNSF’s road fleet in 2006 by 10 miles per day would create the equivalent of having 150 more available locomotives.

Company-Wide Focus on Velocity to Improve Performance

By Steve forsberg

In the wake of back-to-back years in 2004 and 2005 in which BNSF shattered most of its volume and revenue records, BNSF Chairman, President and CeO Matt Rose says that the need for a company-wide focus on velocity is crucial if BNSF is to continue to handle more business. “Our record growth is pushing the capacity limits of our physical franchise to accommodate even more traffic,” says Rose. “In 2006, we must focus on velocity, including business process redesign, to handle the additional business that is coming our way.”

RAIlWAy I MARCH/APRIL 2006 3

Another example is the Intermodal cutoff-to-availability measures. “This really impacts Intermodal customers: how long it takes from the time BNSF gets the shipment until it’s given to the receiver. It’s a similar situation with the other measures,” says Ice. “All six measures are important in terms of the impact they can have on the railroad’s performance.”

Like Intermodal, many of BNSF’s Coal, Agricultural, Consumer and Industrial Products business unit customers, especially those who own or lease freight cars, also define service in terms of velocity by measuring the number of turns their equipment makes. Improvement on any of the measures potentially can have a significant impact.

“Improved velocity will have a very positive impact on our customers,” says John Lanigan, executive vice president and chief marketing officer. “Not only will our equipment turn more quickly, allowing for additional loadings, but our on-time service will improve as well. The focus on velocity is not just the responsibility of Operations. Marketing is also evaluating how we can work directly with customers on issues like storage, demurrage, dwell time and other customer-influenced activities that impact velocity. The article in last month’s Railway about the AIM (Assess. Improve. Maximize.) initiative is a great example of Operations and Marketing working together to improve velocity at the local level.”

everyone Can Impact Velocity

While there potentially are many examples of how velocity improvements can help BNSF, there is a logical tendency to see the effort as largely confined to Transportation jobs. What is unique about the velocity goals, however, is the degree to which every department and work group within Team BNSF can have some impact.

The functional leaders within BNSF are working with their respective teams to identify how they can improve velocity, and Ice emphasizes that all employees can help identify ways to improve velocity when they think about what they do for BNSF to support the railway’s overall operation.

“I was talking to a group the other morning that asked, ‘How can we affect it?’” says Ice. “So I asked them to name five things they do for the company. By the time they got to the fifth one, they were keying in on the connection to how what they do impacts velocity. It’s a natural question to ask, but if everyone focuses on the functions they perform, they will begin to see how what they do can have an impact on velocity; that’s when things become actionable.

“It all comes back to each group’s primary functions and examining how they can improve those to improve velocity. It may be asking, ‘How can we do something faster or more efficiently to put another group in position to impact velocity?’” To further illustrate his point, Ice lists several examples.

“Let’s say your job is writing contracts with ramp contractors at Intermodal Hub Centers. If the contract is ready two months prior to the next volume spike instead of only two weeks before, that can impact how prepared that ramp contractor will be.

“Or take somebody who handles permits for capital projects. Securing those permits in a timely manner impacts when that construction work can be done and when that project can be placed in service.

“Even what Corporate Communications is doing with stories on velocity to help people understand what we’re doing and why, and then keeping them informed about how they can help, can impact velocity.”

Ice says that if you don’t think you have any goals related to velocity, you should ask your leader about his or her goals. Each BNSF team, he says, faces bottlenecks that can impact

line throughput – Move more traffic over each route, including increasing the number of trains that can move over a line and the average speed at which they move across the route.Terminal throughput – Continue efforts to standardize terminal processes and optimize terminal resources.locomotive distribution – Position locomotives in the right place at the right time and turn them faster.Maintenance reliability – Use maintenance activities everywhere (track, locomotives, cars, etc.) to make the assets more available to improve velocity. capital improvements – Continue to make the capital investments in expansion of BNSF’s physical plant (additional track, facilities and equipment, without which future velocity im-provements would not be possible).Train size – Continue to increase train size where possible. This should not, however, be seen as a conflicting goal with velocity. There are tensions between the two, but that’s also part of the reason why BNSF has high- performing teams: to work through those tensions for long-term benefit. The expectation is to make the decisions that get BNSF to the right place long term, and not to make sub-op-timal decisions. For example, a decision not to grant enough track and time for track main-tenance may help move more volume in the short run, but if it leads to more slow orders on that track in the future, that decision may be trading a long-term benefit for a sub-optimal short-term gain.Train design – Do a better job of designing and building trains at origin to reduce ter-minal handling down the line. By doing this, additional volumes can actually help BNSF improve train design because the railroad ends up with more loads going to the same places that enable the company to make better decisions about train design.

Operations Velocity Focus

velocity. The challenge is to identify what those are and address them to improve velocity.

Rose likens BNSF’s opportunities for velocity success to the progress made in safety. It will depend, he says, “on empowering all employees to share ownership in these goals and in identifying and executing the changes that will help us improve velocity.”

Rose says he is confident that Team BNSF can attain the 2006 velocity goals to benefit BNSF customers, shareholders and ultimately the financial future and quality of life of every BNSF employee.

EDITOR’S NOTE: The efforts and progress all departments are making to improve velocity will be reported through Railway; BNSF Today; division, shop and zone newsletters; and other company communications. Highlights of some of the efforts being undertaken in Operations, including Mechanical and Engineering, are outlined below.

One of BNSF’s six key velocity measures is to improve the coal cycle-time index. This means adhering to a plan that starts with the time the cars are placed for loading, followed by transportation time to the utility, unloading and transportation of the empty cars back to the mine.

Every BNSF employee, not just those in Transporta-tion functions, can affect velocity.

4 RAIlWAy I MARCH/APRIL 2006

“Generational diversity may sound like a non-issue within a workforce, but for each of us, national occurrences and trends affect how we think, act and relate,” says Ed McFalls, assistant vice president, Human Resources & Diversity, in Fort Worth. “For instance, for people who grew up during the Great Depression, they may remember the hard times, the conservation of food and household items and the close-knit families and communities. This contrasts with Generation X employees (1965-1980) who probably remember, and were affected by, the Challenger disaster, Desert Storm and corporate layoffs in the early 1980s.”

Major events shape our core values and create a type of commonality within a generation, McFalls continues. “In addition to a generation’s attitude, their group size affects the workplace too. At BNSF, as well as nationally, the workforce will undergo a substantial change as the more seasoned Baby Boom (1946-1964) employees begin to retire.

To remain competitive, companies will need to address the expectations of the younger workers and ensure the knowledge is transferred from the retiring population to the younger generations.”

According to BNSF data, the major generational groups are: Traditionalists Born 1900-1945 About 9 percent of BNSF’s workforce

Baby Boomers Born 1946-1964 About 67 percent of BNSF’s workforce

generation X Born 1965-1980 About 23 percent of BNSF’s workforce

The millennials (generation y) Born 1981-1999 Less than 1 percent of BNSF’s workforce

But there are some gray areas too. “Cuspers” are people who were technically born in one generation, but usually on the tail end of the group, who may relate more to the next generation. For instance, “cuspers” at BNSF are: Traditionalist/Baby Boomer (born 1940- 1945) comprise about 8.5 percent of BNSF’s population Baby Boomer/Generation X (born 1960- 1965) make up about 10.8 percent of BNSF’s population Generation X/Millennial (born 1975- 1980) comprise about 4.8 percent of BNSF’s population.

This kind of diversity is bound to create an interesting talent pool with challenges and opportunities. And at BNSF, several generations within the same family who work for the railway provide another unique dimension to our workforce. Although there are differences, there are several common threads that bind the generations.

Boomer to X: ‘What’s Up with y?’

When thinking about “diversity,” what comes to mind? For a lot of people, it means race, religion or gender. But there’s another kind of diversity and everyone at BNSF is a member of this diversity group: generational. For the first time in history, most companies have four generations working within the ranks.

By Denise ovalle

RAIlWAy I MARCH/APRIL 2006 5

hard work and dedication. Other values include sacrifice, delayed reward, honor, patience and conformity. Influencers: The Great Depression (1929-1943), Social Security established (1934), The New Deal (1933), Pearl Harbor (1941) and the Korean War (1950).

Baby Boomers (1946-1964): Place a high value on health, personal

gratification and material wealth. They are optimistic and believe their generation changed the world. Influencers: ground troops sent to Vietnam War (1965), Peace Corps established (1961), first lunar landing (1969) and John Kennedy elected (1960).

Generation X’ers (1965-1980): Embrace the personal computer and the

Internet. They welcome diversity, are motivated by money, believe in balance in their lives, are self-reliant, and value free time and having fun. Influencers: the Watergate scandal (1973), the Challenger disaster (1986), personal computers (1976), Desert Storm (1991) and corporate layoffs (early 1980s).

Generation y’ers (1981-1999): Are self-reliant (take responsibility for their

own success independent of others), family-oriented, brand-conscious, consumerist (they shop, but they will not buy things that don’t meet their needs) and are addicted to the media. It is not uncommon for them to do homework, listen to a compact disc, watch television, and communicate online at the same time. They are the best-educated generation and the children of Baby Boomers. About 25 percent are foreign-born, and one in three is a person of color.

“When I started with the company in 1977, it looked like unlimited opportunities existed,” says James Lowe, superintendent of operations, Glendive, who was born in 1949. “I think that still exists today.”

Lowe started as a laborer in Havre, Mont., and his career has taken him to Wichita Falls, Texas; McCook, Neb.; Minneapolis; and Glendive. “My dad, who also was a railroader, moved us around a lot, so for me it wasn’t a big deal. But for my son [locomotive engineer Brian Lowe out of Havre], I don’t think he wants to move around. He has kids and a wife; they are settled and like the stability of living in a community long term.”

The younger Lowe, born in 1973, agrees with his dad. “The weird hours didn’t bother me when I considered becoming an employee,” says Brian. “What did concern me was being forced away from my home terminal. I’m pretty sure this is where I want to stay and retire.”

Another difference between father and son is the feeling of having to move to support a family. “My wife works,” says Brian, “so if relocation should arise, that definitely would be a consideration. We now have a fairly good work/life balance with me working the extra board and her working as a retail manager. It does get tricky around the holidays, though.”

As a supervisor, James has to manage employees from different generations and sees the differences in the core values between generations.

“When you put the X’ers with the Traditionalists or Boomers, it’s interesting,” he says. “The Traditionalists or Boomers are used to the longer hours. The X’ers have a higher priority on church, family and outside interests.”

Manuel Carmona, assistant manager, Revenue Management, St. Paul, Minn., started with the railroad in August 1968 as a waybill sorter in Topeka, Kan. He’s a third-generation railroader and expects to make the railroad a long-term career.

“My dad kept telling me, ‘Go work for the railroad,’ so I did. However, I’m the first office worker in my family. My father and grandfather were machinists.”

Carmona recalls in 1968 when companies didn’t have a lot of diversity within the workforce. Office employees mostly were Caucasian men and the family breadwinners.

“The younger generations today want more flexibility in their jobs,” Carmona says. “Now

men take off work when their children are born, employees want better work/life balance, workers generally are better educated, and they aren’t willing to sacrifice as much for their career as perhaps people my age did.”

According to Carmona, the developments have been good ones. “Workforce changes over the last 30 years also have provided a lot of opportunities for people who haven’t necessarily come from traditional backgrounds. And at BNSF, it’s still a good place to work and provide a good life for your family.”

Although a family perhaps isn’t on the forefront of Richard Payne’s mind, a stable future made BNSF attractive. At 23, Payne is a member of Generation Y. “It’s hard to be thinking about retirement at this age, but it’s nice to know BNSF has a good retirement plan if you’re inclined to make a career here.”

Payne, analyst, Revenue Management in St. Paul, sees many of his friends bouncing between companies without an eye on the future. “I want to make BNSF a career. I think there’s enough opportunity here. You can be here for 40 years and still not know everything.”

According to Payne, communicating with more seasoned employees can be a little tricky. “Today’s technology can be intimidating for people who grew up before computers were commonplace. For my generation, it’s second nature. But I think it’s important to integrate our employees’ knowledge with the technology available to meet future needs.”

So, with such generational diversity and different perspectives, how can we communicate and work better with each other? One way is to appreciate each other’s core values. According to published reports, generally speaking, each generation has different core values. Here are some core values they may share, though these are not all-encompassing:

Traditionalists (1900-1945): Are recognized for their strong traditional

views of God, family and country. Their core values include respect for authority, loyalty,

here are a few tips for working with people from different generations: Be respectful. Don’t treat older employees like your parents or younger ones like your children. listen to concerns and apprehensions. Take the opportunity to learn and be open to new ideas. Take an interest in the person’s background and past experiences.every generation has its core values, and though they may be different from the next generations’, they aren’t wrong, out-dated or odd. They are part of what makes each of us unique.

Bridging the Generational Gap

Manuel Carmona, left, and Brian Payne are from different generations, but both plan to make BNSF their permanent career choice.

By Susan green

In 2006, BNSF has a $2.4 billion capital commitment program, which is 10 percent higher than 2005’s.

“We are increasing our capital investment commitments in 2006 to meet anticipated future volumes because we are confident that our Return on Invested Capital (ROIC) will continue to improve,” says Chairman, President and CEO Matt Rose. “For 2005, ROIC was 10.1 percent, a significant improvement from 7.9 percent in 2004 and 6.6 percent in 2003.” (For more information on ROIC, see the calculation following Item 6 in BNSF’s Form 10-K included within the 2005 annual report to shareholders.)

Of this year’s capital commitment, more than $1.4 billion will be used in maintenance of the business. Typically the biggest piece of the capital commitment pie, maintenance investments are undertaken to ensure BNSF continues to get the most utilization out of the assets we already own. This includes

2006 Capital Commitment Designed to Match Future Growth

6 RAIlWAy I MARCH/APRIL 2006

Some companies call it their annual “capital plan,” others a “capital program.” BNSF calls it “capital commitment” – and for good reason. The capital dollars committed each year to BNSF’s expansion projects and maintenance programs underscore our commitment to handling customers’ growing business. There is also a commitment to shareholders that the investments will provide good returns and to employees that BNSF’s future, and theirs, is secure.

RAIlWAy I MARCH/APRIL 2006 �

replacing track, signal systems and structures; rebuilding rolling stock; and implementing new technologies. Compared with 2005, this year’s maintenance costs represent an increase of about $100 million.

“The maintenance dollars we commit each year are dedicated to keeping our railroad robust and reliable. They help to maintain fluidity and improve service consistency while handling increased volumes,” says Executive Vice President and Chief Operations Officer Carl Ice. “This year’s maintenance budget was increased over last year’s, and as the year progresses, if we see a need to adjust or add to the maintenance projects, we will do that. Each division has a detailed maintenance plan, and I encourage anyone who wants more specifics to ask their Engineering contacts for those.”

About $400 million of the 2006 commitments will be used in track and facilities

expansion to provide new capacity to meet increasing demand for consistent freight rail service. Another $550 million will go toward 310 locomotives. These commitments are being made as BNSF anticipates another strong year of demand for all segments of business, especially international/intermodal and coal.

The following is a summary of some of the major 2006 line and facility capacity expansion programs.

Coal Route Add about 60 miles of double- and triple-track on the Powder River Basin Joint Line and in Nebraska, and expand Lincoln, Neb., Yard. Major work includes:

Add 18.4 miles of third track between milepost 58.1 and Reno, Wyo.

Double-track 10 miles from Berwyn to Mason, Neb.

Double-track 6.6 miles between Degraw and Bayard, Neb. Grading work between Angora and Northport, Neb. Grading work between Ashland and South Bend, Neb. Construct six staging tracks at Donkey Creek (Rozet, Wyo.) Construct two miles of siding at Sargent, Mo., plus engineering for

double-track at Mountain Grove, Mo. In the Lincoln, Neb., Yard, complete two fueling tracks each capable of fueling four locomotives at once, one receiving/departure track and connection to Creston subdivision

Southern TransconThe double-track additions include:

32 miles of double-track construction, all on the Panhandle Subdivision: - 9 miles between Roland and Milan, Kan. - 14.5 miles between Attica and Hazelton, Kan. - 8.5 miles between Mulvane and Cicero, Kan. Triple-track construction: - 9 miles between Barstow and Daggett, Calif.

Intermodal FacilitiesExpansion activity will be at Logistics Park-Chicago (LPC); Los Angeles; Memphis, Tenn.; Alliance, Texas; Seattle; St. Paul, Minn.; and Houston. Highlights include: LPC – Add fourth strip track and five support tracks, complete paving 72 additional acres (when completed, annual capacity will exceed 750,000 lifts) Los Angeles – Add parking capacity, stacking capacity and support tracks Memphis – Land development and additional parking expansion Alliance – Complete paving 20 additional acres for parking (when completed, annual capacity will exceed 650,000 lifts) Seattle – Conversion of north intermodal yard from storage to load/unloading intermodal operation, increasing lift capacity to about 600,000 lifts St. Paul – Addition of stacking operation at Union Yard Houston – Strip track extension and parking expansion

Other Infrastructure Extend sidings in Lyle, Wash.; New

Westminster, B.C.; Auburn, Wash.; and Hallett, Okla.; and improve fueling facility at Temple, Texas.

Significant acquisitions are planned for intermodal lift equipment in 2006. LPC-Chicago will add 11 overhead and two stacking cranes, while Hobart will receive an additional six overhead cranes.

Of the 310 locomotives that BNSF will take delivery of this year, 240 are General Electric ES44AC models from the Evolution Series and 70 are SD70ACe models by Electro-Motive Diesel. The EMD model is a 4,300-horsepower locomotive version that is Environmental Protection Agency Tier-2 emissions certified.

Southern Transcon additions

Terminal/intermodal facility Through-put

coal route capacity

Significant Expansion Projects

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8 RAIlWAy I MARCH/APRIL 2006

We had a successful year in safety for 2005, and 2006 is off to a good start. What is driving the improved safety performance we’re seeing?

We clearly have the right processes in place to move us toward our goal of an injury-free workplace. We had a record-low injury frequency ratio in 2005, and through February 2006 we achieved 1.06. Behavior-based safety is the right approach, along with the closed-loop safety process and a focus on enhancing situational awareness.

Still, the fact that we had four fatalities in 2005 and two in early 2006 is not only tragic, it’s simply intolerable. Our vision truly is that all injuries and incidents are preventable.

To make continued safety improvement, will we implement any new processes or do anything differently? What is your safety plan for 2006?

Our greatest power is in our local site safety teams. Increased employee participation in the safety process is the key to continued progress. We can’t prescribe safety to our site safety teams or tell them what to do. They see the issues and behaviors that need to be addressed, and they usually can figure out the best ways to address them. On a system level, our responsibility is to provide our supervisors and our site safety teams the resources they need to succeed.

Technology is another major focus. We’re looking for ways to engineer out the risks as much as feasible. A great example is the Electronic Train Management System (ETMS). This innovative technology uses global positioning satellite data and BNSF track and dispatching data to enforce track authority and speed limits. It also can confirm track integrity and switch position.

In our ETMS pilot project in central Illinois, where we’ve equipped 50 locomotives with ETMS technology, we’ve logged more than 1,600 revenue trips with no failures. Even though ETMS is an expensive technology and will take awhile to implement, we believe it’s the right thing to do. At this point, we plan to continue testing it, while the Federal Railroad Administration (FRA) is reviewing our product safety plan. But our long-term goal is to begin implementation, once we get approval from the FRA.

We’ve been hiring new employees at a record rate. What are we doing to train these new employees and ensure they work safely?

I’m confident that our new-hire employees are getting some of the best training available in the industry. Our Technical Training Center in Overland Park, Kan., is the leading training center in the industry, and our

Safety SpeakBy Kristen rabe

new train-service employees are getting an outstanding introduction to the industry there. Our field training programs also are among the best.

Training is essential, but we also need to ensure that we provide constant safety reminders as part of the everyday culture. Our safety briefing and safety risk analysis processes are very important parts of our safety culture. The natural mentoring that takes place with experienced employees coaching newer employees is crucial as well.

In addition, good communication of safety messages is essential. I plan to roll out a communication strategy that targets key safety messages for employee audiences based on craft, location and other demographics. We need to understand our target audiences and review our key safety messages so we’re hitting the right people with the right messages at the right time.

We also may explore using new media to communicate our messages. The employees we’re hiring today, who grew up using computers, may respond to different types of messages and media than employees who have been around the industry for a while. We may end up using videos or Web-based communications to get out our messages.

We’re seeing more joint labor-management safety processes, including the Safety Summit and other safety agreements with various crafts. Why are these important, and what are your goals for these joint processes?

Joint labor-management safety processes are the platform for our continued safety improvement, and I am very pleased with the safety agreements we have with the Transportation crafts and several Mechanical and Engineering crafts. We must have employee involvement to effectively identify and eliminate risk.

We’ve done a good job reducing risk in the work environment through the Safety Issue Resolution Process and our local site safety teams. The next step is to address the behavioral side. The Work Practice Observation process and the Safety Risk and Behavior Identification Process that are built into our labor safety agreements are an important step in this direction.

Q&A with Mark Schulze

Editor’s Note: Last June, Mark Schulze assumed the position of vice president, Safety, Training and Operations Support for BNSF. The previous year, he was general manager of the Texas Division, after serving as vice president and chief sourcing officer since November 2002. Prior to the sourcing post, Schulze had been assistant vice president, Consumer Products Marketing. This breadth of experience at BNSF and Schulze’s commitment to the Leadership Model and our Safety Vision were cited as reasons for his appointment to his present position. In this Railway interview, Schulze outlines some of the goals and strategies for making BNSF an injury-free workplace.

Mark Schulze, vice president, Safety, Training and Operations Support.

RAIlWAy I MARCH/APRIL 2006 9

It appears that the Safety Assurance and Compliance Process (SACP) is changing. What role do you envision SACP playing in the future of safety at BNSF?

When the SACP process was first established in the rail industry nearly 10 years ago, it included the joint involvement of management, labor leaders and the FRA to address systemic safety issues. At BNSF, we’ve invested tremendous effort in making the SACP process successful at the system and division levels, and we’ve been pleased with the results.

Last fall, the FRA told us that they will be much less involved in the SACP process and will focus their resources elsewhere. However, at BNSF, we are committed to safety efforts under way on the system and division levels. We are currently working with our labor leaders to determine just how the process will work going forward and to ensure we have the right programs in place.

What about operational safety? What plans do we have in place to reduce the rate of rail accidents?

I see three key initiatives helping to improve our rail accident performance.

First, we must continue to thoroughly analyze incidents to determine and address root causes. We have to understand what contributed to an accident – whether it was a mechanical or track failure or a human factor – to effectively follow up.

Second, we must continue expanding our incident-prevention technology. We have many important tools in place, including our track and equipment maintenance and inspection programs as well as our advanced detection technologies. We must also continue to develop new technologies. ETMS, which I discussed earlier, is a great example of a technology that has tremendous potential to improve our operational safety.

Third, we must work with our suppliers to improve the manufacturing processes and standards for our track and rail equipment. Improved product design, including better metallurgy and components, can increase the reliability of our entire network and prevent incidents caused by equipment or track failures. A challenging, but essential, piece of this is developing industry standards that apply to shipper-owned rail equipment, so we’re raising the bar for everyone.

BNSF has the lowest grade-crossing collision rate among Class I railroads. What is BNSF doing to address and continue to improve grade-crossing safety?

Our grade-crossing safety program does lead the industry. We have a very active community and driver education program, in coordination with Operation Lifesaver, where we communicate the grade-crossing safety message to thousands of truck and bus drivers each year, as well as others in the communities we serve. Our grade-crossing closure program, a joint safety and public projects initiative, also has resulted in the closure of 3,000 unnecessary or redundant public and private crossings since 2000.

Still, last year we had too many grade-crossing incidents on BNSF. Even though the motorist or pedestrian is responsible

for following grade-crossing safety laws, we take seriously every one of those incidents and fatalities and will continue to look for ways to eliminate them.

For one thing, we’re stressing that our locomotive engineers effectively use their train whistles to warn motorists as trains approach grade crossings. A new train horn rule issued by the FRA in June 2005 explicitly outlines the FRA’s expectations for the train whistle pattern and duration. The vast majority of our

locomotive engineers consistently follow these expectations almost instinctively. But we’re going

to be issuing a video and other communication, as well as increasing our operations testing on whistle use, to ensure that all our train crew employees understand and consistently follow this requirement.

What’s the relationship between our corporate focus on velocity and our safety initiatives? Can velocity and safety be compatible goals?

Our experience consistently shows that an efficient operation is a safe operation. Traditionally, the divisions that have the best operational performance also have had the best safety performance. We’ve talked for many years about “safe production” because we believe the two go hand-in-hand. Still, it will be important to emphasize that improving velocity is not about taking shortcuts; it’s about working smarter and safer.

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25MAR 05 JUN 05 SEP 05 OCT 05 DEC 05MAY 05APR 05 JUL 05 AUG 05 NOV 05 JAN 06 FEB 06 MAR 06

BNSF Units HandledYear-to-date through March 18, 2006, and March 17, 2005 2006 2005

2006 BNSF Velocity PerformanceYear-to-date through March 23, 2006 Actual YTD

Locomotive miles per day 284

Agricultural car miles per day 164

Merchandise car miles per day 109.6

Coal cycle index 140.6

Intermodal stack transit days 5.3

Intermodal trailer transit days 2.7

Coal 495,352 471,539Agricultural Products 206,126 199,820Industrial 329,764 331,585Consumer 1,108,864 1,067,870System 2,140,106 2,070,814

BNSF Performance Measures

BNSF Stock12-month through March 24, 2006 S&P 500 Index BNSF

BNSF Reportable InjuriesYear-to-date through March 23, 2006

108

Locomotive Velocity = Total locomotive miles on 3,000+ HP/ Total locomotive count (average miles per day per locomotive)

Agricultural and Merchandise Car Velocity = Car miles / active cycle days

Coal cycle index percentage = Actual total cycle time / Plan cycle time (starts with the time the cars are placed for loading, followed by transportation time to the utility, unloading and transportation of the empty cars back to mine); excludes foreign road delay and utility outage delay

Intermodal Service average transit days = Average time between cutoff and deramp or interchange delivery (transit time starts at cutoff or first train departure if cutoff is after first train departure)

“Training is essential, but we also need to ensure that we provide constant safety

reminders as part of the everyday culture.”

– Mark Schulze

132

2006

2005

Technologyfor Velocity

2006 Highlights in Building eSynchronous Railroad

BNSF’s Technology Services is one year into a journey – a five-year expedition to realize the vision of an eSynchronous railroad and building the digital railroad of the future. The goals? Connecting all of our assets and all of our people to improve velocity and a future where many of our software applications are riding a safe and reliable wireless backbone to all mobile and fixed points on our rail network.

By Susan morrow

10 RAIlWAy I MARCH/APRIL 2006

RAIlWAy I MARCH/APRIL 2006 11

The eSynchronous railroad leverages information technology systems and services to integrate and synchronize all aspects of planning, operating and managing the railroad to eliminate dated information and maximize velocity, thereby continuously optimizing performance and service. The result will be real-time connectivity to all aspects of the BNSF organization for customers, employees and service partners.

“Improving the velocity of information flowing to customers, Operations, Marketing and our service partners is the primary outcome and ultimate benefit of digitizing our processes,” says Vice President Technology Services and Chief Information Officer Jeff Campbell. “The more timely and the better quality the information, the better the decisions that can be made by our customers and our entire organization.”

As a major 2006 focus for BNSF, velocity will play the key role within Technology Services (TS). How can and will TS impact velocity? How will its related initiatives affect BNSF?

Velocity Highlights year One of eSynchronous Road Map

Information technology (IT) will play both a direct and indirect role in improving velocity for BNSF, and Campbell and his team expect to support velocity improvement through both network and back-office initiatives. The team is building underlying capabilities, such as integrating legacy systems to give us more flexibility, porting applications to mobile devices for improved productivity, using new technologies around business rules engines, and making changes to expose old systems to the Internet and speed development time.

Given the velocity improvement efforts under way now (please see related story on Page 2), BNSF is dedicating attention and resources to IT-related initiatives that will support velocity improvement. Says Campbell: “In addition to working with other groups at BNSF to determine how IT tools can improve velocity, we’ll be looking for ways to accelerate the development and implementation of such projects.”

For 2006, the TS team plans to provide maintenance management, yard capacity, service design and capacity assessment applications that focus on efficient use of available track capacity, key to improving velocity.

Maintenance Management ToolsThe Planning and Activity Reporting System

(PARS) is a maintenance planner’s “workbench” providing a view of all work needed in a territory and then allowing the supervisor of maintenance to create a plan that better coordinates what needs to be done to complete the work. This process utilizes less track time by scheduling multiple work efforts within the same track limits during the same track window.

The less track time absorbed for maintenance, the more track time and capacity is available for moving freight, thus enhancing velocity. Plus, coordinated planning results in increased reliability and longevity of BNSF’s track assets.

The Track Inspection Management System (TIMS) and Employee in Charge (EIC) are two other applications that should help increase efficient use of track capacity. With TIMS, track inspectors working trackside can input inspection results to take unsafe rail out of service before an event can occur. EIC, currently being piloted at San Bernardino, Calif., with a planned rollout this year, enables trackside workers to see track authority information. Soon track workers will be able to digitally request, receive and release track authority through a direct link to the new Train Management and Dispatch System.

yard Velocity ToolYarD Status (YDS) is a major initiative this year that eliminates

manual updates to other spreadsheets, increasing value-added, real-time communication between departments and providing more micro-level data for subsequent analysis.

Much of a terminal’s daily plan spreadsheet is covered by YDS, so first-

line supervisors won’t have to enter information in multiple spreadsheets and the terminal plan will be readily accessible to everyone at BNSF. With YDS, there’s no more e-mailing spreadsheets; BNSF people who need information about a terminal can simply look in BNSF’s Transportation Support System (TSS) to see a terminal’s current plan.

YDS also provides data that can be analyzed to improve terminal throughput. For example, if a terminal’s target goal is to perform an activity – such as a train inspection – within a set amount of time, and the terminal consistently takes more than the target time to perform this activity, effort can be focused around that activity and resources can be applied to it if necessary, providing another velocity improvement.

enhanced Service Design Creating an environment to see the impact of train schedules before

they are implemented is the basis for Enhanced Service Design (ESD), the core tool that supports many functions for BNSF’s Service Design group. By improving the overall reliability, efficiency and diagnostic capabilities of the current design environment, ESD decreases cycle time

for the creation, execution and analysis of proposed transportation support plan changes (“what-if” scenarios) and increases decision quality based on the scenario results. In addition, Service Design feeds data to various BNSF departments to support measures impacting velocity.

Capacity Viewing Tool

TS also will be implementing applications to evaluate capacity. One is the Capacity Viewing Tool (CVT), which automates the information analysis process by compiling capacity information from multiple sources and

reporting it from a single location. One capability allows users to view capacity information at

and between origin and destination locations. With the automated functionality, users can efficiently address issues such as evaluating new business opportunities. Prior to CVT, answering such questions used to be a manual, time-consuming process taking days or even weeks. Users now can quickly drill into and assess capacity within minutes to determine whether they have the right traffic mix or which days’ trains have the most available capacity, for example. CVT greatly increases response time and

communication through its user-friendly “point-and-click” navigation.

In 2005, CVT was prototyped with several departments. The prototype application analyzed capacity by viewing BNSF’s system operation dimensions that include train, line, terminal/hub and equipment capacity.

The CVT proof-of-concept was so successful that in 2006 TS will add both the Crew and Power dimensions to enhance CVT’s reporting capabilities. Users will be able to quickly assess situations, such as the type of equipment or power that is needed, and make better and faster decisions regarding capacity.

Future Track for eSynchronous Railroad“The transportation industry is heavily reliant on velocity to drive high

utilization in a capital-intensive industry,” says Campbell. “Technology Services has the unique opportunity to provide technology and tools that will help increase the velocity of our railroad, ultimately resulting in better customer service and overall profitability.”

With varied technology process and product initiatives under way for 2006, velocity improvement is taking center stage as TS continues to build the eSynchronous railroad. For Campbell and his team, there lies the exciting challenge.

“How will Technology Services’ transformation road map toward building an eSynchronous railroad be able to support favorably BNSF’s velocity initiatives?” asks Campbell. “We will be discussing the potential effects in depth to incorporate into both our 2006 plan and plans for years to come.”

“improving the velocity of information flowing to customers,

operations, marketing and our service partners is the primary

outcome and ultimate benefit of eSynchronizing the railroad.”

– Jeff Campbell

Charlene Hampton (standing), manager, Network Support Systems, trains Yardmaster Mike McClendon at Tulsa, Okla., on the use of YarD Status.

PRSRT STDU.S. POSTAGE

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Burlington Northern Santa Fe CorporationP.O. Box 961057Fort Worth, Texas 76161-0057

PRSRT STDU.S. POSTAGE

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T h e e m p l o y e e m a g a z i n e o f T e a m B n S f m a r c h / a p r i l 2 0 0 6

The latest ON GUARD poster has been distributed to field offices across BNSF’s system. In addition to asking employees to be aware of their surroundings, it provides information on how to be a better witness. To help the Resource Protection Solutions Team, employees who witness trespassers or suspicious activities should report specifically: What was observed When it was observed Where it was seen, including a milepost, building or direction Who was involved, describing as many details as possible such as clothing, height and weight.

Since the ON GUARD program began in 2003, about 200 reports have been called in by BNSF employees.

Anyone who notices anything suspicious should call 1-800-832-5452. However, employees should never take action on their own if they spot a possible problem, but should always call their local Resource Protection Solutions Special Agents.

For more information on the ON GUARD program, go to the Resource Protection Solutions Intranet site and click Protection Solutions. Or go directly to http://www.bnsf.com/tools/resourceprotection/on_guard.html