Coal Network Update for Friday, March 4, 2022

Mar 4, 2022

Operational Performance
Rail operations remain challenged in some areas as BNSF teams work to restore and increase network productivity. We experienced a derailment yesterday evening in California, approximately 25 miles southeast of Bakersfield. The single main line track at the incident location is currently out of service, which is impacting traffic designated to move on this key route linking northern and southern California.

Multiple teams are onsite and engaged in track repair work. The affected main line is expected to reopen later today. Customers with shipments moving through the area should expect delays until service is fully restored.

As we move into March, the frequent extreme weather that we have reported on during the past two months significantly impacted our ability to effectively align resources with freight volumes. While each BNSF operating division has a robust Winter Action Plan to address severe weather, the frequency and duration of these harsh conditions, particularly across our North Region, resulted in slower train speeds, elevated car dwell and reduced productivity. In addition to this historically challenging winter, ongoing global supply chain disruptions due to impacts from the COVID-19 pandemic have strained resource availability in multiple locations.

Our key service metrics continue to reflect some of these operational inefficiencies. Overall car velocity was down by about 3% versus the prior week, while average terminal dwell increased by 5%. Our local service compliance measure was essentially unchanged from last week and up slightly versus the prior month.

BNSF operating teams have begun implementing an aggressive program to restore service performance to the level you expect from us. The actions being taken include increasing our active locomotive fleet as well as available train crew personnel. Some resources will also be re-allocated to areas experiencing more critical service challenges.

At the same time, we are also taking steps to temporarily reduce the active car inventory on the network. While the reduction in the number of sets and cars may cause additional service issues in the immediate term, the benefits to a quicker network recovery and improved performance significantly outweigh the adverse effects.

These actions are necessary to create the capacity needed to drive increased velocity and fluidity. We expect to generate improved velocity and fluidity as we move through the second quarter of the year. We will provide updates on our progress as well as additional service metric information in the weeks ahead.

Service Expectations for the Week Ahead
An active weather pattern returns across the West during the next several days. Winter storm warnings are in effect for portions of southeastern Wyoming and western Nebraska through tomorrow with several inches of snow expected. Some freezing rain is also possible across the Upper Midwest this weekend. As always, BNSF teams are monitoring forecasts and will respond to any disruptions as quickly as possible.

As always, we thank you for your business and appreciate the opportunity to serve as your transportation service provider. We welcome your feedback and questions.