Intermodal Todd Strever GENERAL DIRECTOR, CONSUMER PRODUCTS - - PowerPoint PPT Presentation

BNSF Intermodal

Todd Strever

GENERAL DIRECTOR, CONSUMER PRODUCTS

OCTOBER 10, 2017

BNSF’s Intermodal Solutions Team

Northeast - South Kevin Ghassemi Todd Strever: General Director David Clark: West Director (Northwest/Southwest/Central/North Central/South Central) Ben Banks: East Director (Northeast North/Northeast South/Ohio Valley/Southeast Northwest Jace Thompson Southwest Alissa Murray Central Chad Schuirmann South Central Bryon Arita Southeast Jenni Bergeland Ohio Valley Riley Simpson Northeast - North Jeremy Young Central Caleb Maki

Growth Between 1990 and 2016

+30% +30% +229% +229%

Source: U.S. Census and AAR

Consumer Products is Half of BNSF’s Volume

2016 INTERMODAL VOLUMES HANDLED BY U.S. CLASS I RAILROADS (THOUSANDS) BNSF VOLUME 2016 9,758 (THOUSANDS)

Consumer Products – 52% Coal – 19% Industrial Products – 18% Ag – 11%

Consumer Products represents 50 percent of BNSF’s business portfolio More intermodal shipments than any Class I railroad

Source: AAR and BNSF Internal Data

BNSF Volume – YTD 2017 through Q2

Total units and % change from 2016 In Thousands

565

Ag +7.8%

912

YTD 2017

TOTAL VOLUME

5,009 +7.6%

2,654

Consumer Products +5.7%

878

Industrial Products +2.3% Coal +19.5%

The Culture of Consumerism is Changing

Retail Leaders – Here’s What They’re Saying

“Companies have to remove the weakest link in their supply chains

…. disruption is necessary in order to innovate”

“Retail is not dead

but mediocre retail experiences are dead”

“1/3 of retail shoppers

would rather wash dishes than physically go to a store”

“FREE SHIPPING

is now the standard”

“FOCUS ON MILLENNIALS

…there are 85 million

• f them”

85M 85M

“Americans have lost 1/3 of their attention span in the last decade. It is now just 8.25 seconds and going down”

Poll Question:

• Value
• Speed
• Consistency
• Transparency

(*choose top 2)

When evaluating opportunities to convert freight from over-the- road to intermodal, which of these factors is the most important to your business...

Poll Results

TOP 2 OTR TO INTERMODAL CONVERSION FACTORS

5% 41% 19% 35%

Transparency Consistency Speed Value

Innovation Around Our Product

Southern Transcon Investments

2,200

mile route

99.8%

double track

$3B

investment

Expansion in the Northern Corridor

+$5B in Maintenance &

Capital Expansion 2014-2017

+1,000 miles of CTC +135 miles of double-track 13 new sidings added 15 sidings extended

New PNW-Texas Service

Seattle Dallas/Fort Worth Portland

5 days per week service

1 day

faster

(PNW to Texas)

New Joint Service with KCS to/from Mexico

5 days

per week service

BNSF KCS Ferromex

Innovation in the Supply Chain

Increasing Supply Chain Efficiency Information Transparency Location

Integrated Service Plan is Improving Consistency

Chicago Pacific Southwest Seattle Denver Dallas/Fort Worth Memphis

90% of

participating loads are meeting our customers’ need date

(between PSW and Chicago)

Better Supply Chain Visibility with ETN

RailPASS Technology Provides Efficiency

>27K users >7K CA users 3x faster gate 5x fewer exceptions

How far along is BNSF with installation?

As of August 18, 2017

Co-Location Cost Savings

EXAMPLE

Site A: Logistics Park BNSF Site B: 20 miles away

Based on a hypothetical scenario with 5,000 annual inbound intermodal shipments:

RESULTS WITH SITE A

By Locating at Logistics Park BNSF You’ll Save:

• $117 in drayage costs per unit
• $585,000 total annually on inbound shipments to your distribution center
• $1.17 in annual rent savings per SF for a 500,000 SF distribution center

facility

Site B BNSF Intermodal Facility Site A

Industry Facing Headwinds

Increased Regulations Crumbling Infrastructure Driver Shortages Permitting Industry Consolidation