Intermodal Network Update for Friday, January 19, 2018

Jan 19, 2018

Operational Performance
The operation is generating improved velocity and good fluidity as weather conditions have moderated across the network. While another strong winter storm earlier this week caused some service challenges, particularly in south Texas and parts of the Gulf Coast that experienced snow, ice and below freezing temperatures, key performance indicators have improved considerably from the levels reported at the beginning of the year. Average overall velocity for both cars and trains was down slightly versus the previous week, but much higher than earlier this month. The number of trains holding is also significantly lower versus the average from the previous January.

While BNSF will release details on our 2018 capital plan soon, this year's network maintenance program is underway as capital gangs have begun their work. Crews were active in several locations this week, including three north Texas subdivisions, with minimal train delays. As always, the program involves track surfacing and replacement projects, such as replacing rails and ties that are due for renewal. The work is critical to supporting the safety and efficiency of our network, and our teams are constantly evaluating all available options to mitigate any potential delays.

Intermodal Update
The extremely cold temperatures in the North and a rare winter storm that impacted the South this week caused some minor disruptions to operations at several BNSF hubs, including our St. Paul and Chicago facilities as well as our Houston (Pearland) and Memphis intermodal facilities. As a result, we experienced a higher than normal number of units waiting to be unloaded and increased inventories due to poor driving conditions on the surrounding roadways. Operating conditions have since returned to normal, but we continue to monitor weather conditions and any adverse impact they may have on both our facilities and our dray partners.

Some drivers may have experienced extended pick-up times at Logistics Park Chicago last week due to chassis shortages, which caused a higher number of units stacked for pick-up than usual. Chassis supplies are starting to normalize and any additional delays to drivers should be minimized in the upcoming week.

We also reported in our last update on the higher than normal inventory levels and significant chassis shortages at our Alliance Intermodal Facility in Fort Worth coming out of the holidays. This week, we saw improvements in both chassis supplies and inventory levels, which returned the facility to normal operating conditions. Reduced off-spot and units stacked for pickup have improved conditions for drivers picking up or dropping off shipments.

We are also experiencing improved operating conditions at our Southern California intermodal facilities this week. Operations remain fluid as we are handling the volume in the new year.

Service Expectations for the Week Ahead
BNSF operating teams are monitoring the next winter storm system, which will move through the central Plains into the upper Midwest early next week. High winds and blizzard conditions are possible in some locations, including the Twin Cities, with this system, but temperatures should remain near normal levels for this time of year. Otherwise, favorable operating conditions are expected throughout much of the network during the next several days.

Maintenance activity will continue on our Ft. Worth, Wichita Falls and Slaton Subdivisions in north Texas as well as our Birmingham Subdivision, which runs between Memphis and Birmingham. Some trains may experience minor delays during scheduled work windows through these areas.

Below is a look at the key operational performance categories for the week ending January 18:

Total trains held for the week increased by more than seven percent with an average of 72.0 trains held versus 67.1 trains held during the prior week.

    Versus the January 2017 average: down by 21.0%

Total trains on the system was up by more than two percent versus the prior week with an average of 1,414 trains on the system.
    Versus the January 2017 average: up by 3.4%

Car velocity was down by more than four percent at 221.4 MPD versus 231.2 MPD recorded the prior week.
    Versus the January 2017 average: up by 5.7%

Train velocity, measured in miles per hour (MPH), was down by two percent versus the prior week at 19.5 MPH.
    Versus the January 2017 average: up by 6.0%

Total volume was up by more than 15 percent from the prior week with 196,786 units moved in Week 2 (ending January 13) versus 170,244 units in Week 1 (ending January 6, which includes the New Year's Day holiday).

Terminal dwell increased by more than 10 percent versus the prior week at 26.2 hours.
    Versus the January 2017 average: down by 8.6%

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.