5/20/ Managing Shortline Equipment Demand/Dwell ACACSO November 2012 Ken Jacobs, BNSF Railway

5/20/ Managing Shortline Equipment Demand/Dwell Agenda BNSF’s Shortline Profile BNSF – Shortline Community Partnership Shortline Demand Management / Velocity / Dwell Focus Areas Best Practices Dwell Methodology Benefits

3 BNSF’s Network BNSF 32K Miles BNSF’s Connecting Shortlines 19K Miles BNSF Handling Carriers Other Shortlines Total Miles

Shortline Activity at BNSF 5

6 Four Expectations Take care of customers – excellent service Pursue business opportunities – growth Focus on velocity/efficiency – world class supply chain Invest – for safety, efficiency and growth

BNSF System Cars – Time Distribution 7

5/20/ BNSF – Shortline Dwell Focus Areas - Service consistency - Want date performance - Focus on asset utility - Enforce demurrage - Equipment Request Management - Loading flexibility Efficiency Velocity Capacity Fluidity BNSF Shortline Customer

5/20/ Ease of Doing Business – Best Practices Equipment Request Management BNSF allows customer or shortline to submit equipment requests Shortline provides valuable link with management of equipment requests Policy / major inputs Place accurate requests at least 7 days in advance Want Date – anticipated delivery date to shortline (not placement to customer) Modify or cancel Equipment Requests as business levels change Equipment Dwell Management Utilize BNSF Shortline Velocity Tool to measure / manage / minimize dwell

5/20/ RER – EDO Interface

5/20/ Weekly summarized-view of all Orders

5/20/ Select specific Equipment

5/20/ Opens Calendar

5/20/

5/20/ Utilization and Capacity Improvements Benefits of Dwell Management Creates additional capacity without capital investment Reduced car hire liability to Shortline / BNSF Increased order-fill Improved profitability More fluid operations Increased customer satisfaction

5/20/ Shortline Dwell Measurement Measuring Dwell Match up DD to RR System / Foreign / TTX / Rail Controlled Pvt only Exclude Offline Storage in Dwell Capture and Exclude Early Dwell Box and Whisker chart Box is middle 50% of distribution; line across box is the median. Black diamond is the mean. Blue line (right axis) is total car days.

5/20/ Shortline Dwell Measurement All Shortlines Connecting with BNSF

5/20/ Dwell Accountability I/C DD = Want date AP/CP Customer time = 2 days RL I/C RR 6 days Suboptimal Preferred Want date I/C DD AP/CP RL I/C RR Customer time = 5 days 10 days BNSF Shortline Customer Key:

Dwell Improvement requires three party partnership Benefits of Dwell Improvement Capacity Car Hire Profitability Customer Satisfaction Road-specific details can be developed upon request Shortline Dwell – Summary 19