raising the level of your supply chain performance...sources: map –fhwa freight analysis...
TRANSCRIPT
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Raising the Level of Your Supply Chain
Performance
Pat KinneGENERAL DIRECTOR INTERNATIONAL
MARKETING
BNSF Railway Intermodal
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Read GDP GrowthThe U.S. economy in Q1 grew at 1.2% q/q, the weakest growth in 3 years. Slowdown tied to temporary factors likely to give way to a rebound in coming months.
2.1% 1.2%-0.3% -2.8% 2.5% 1.6% 2.2% 1.7% -1.2% 4.0% 5.0% 2.3% 2.0% 2.6% 2.0% 0.9% 0.8% 1.4% 3.5%
-8-7-6-5-4-3-2-101234567
2008 2009 2010 2011 2012 2013 1Q2014
2Q2014
3Q2014
4Q2014
1Q2015
2Q2015
3Q2015
4Q2015
1Q2016
2Q2016
3Q2016
4Q2016
1Q2017
Fixed Investment Government ExpendituresImports ExportsInventories Consumption
Net GDP
Source: U.S. Dept. of Commerce, Bureau of Economic Analysis, May 26, 2017
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120.3
117.9
2030405060708090
100110120130140150160
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CONSUMER CONFIDENCEMay 2017
(Conference Board)Recession
3
Consumer SectorConsumer confidence jumped to highest level in 16 years in March, declining some in April/May, but still relatively high
(The Conference Board Total Index, 1985 SA =100)
Source: Conference Board, May 30, 2017
Recession
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Agricultural SectorBNSF saw record volumes in 2016
75,00085,00095,000
105,000115,000125,000135,000145,000155,000165,000175,000
Q10
8Q
208
Q30
8Q
408
Q10
9Q
209
Q30
9Q
409
Q11
0Q
210
Q31
0Q
410
Q11
1Q
211
Q31
1Q
411
Q11
2Q
212
Q31
2Q
412
Q11
3Q
213
Q31
3Q
413
Q11
4Q
214
Q31
4Q
414
Q11
5Q
215
Q31
5Q
415
Q11
6Q
216
Q31
6Q
416
Q11
7
ALL TIME RECORD
170KBNSF RAILWAY GRAIN SHIPMENTS
(Units, Thru Q1 2017)
Source: AAR
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Big Picture U.S. Class Is
Intermodal/Automotive
53%Industrial Products
25%
Coal 14%
Agricultural Products
8%
2016 UNITS HANDLED BY U.S. CLASS I RAILROADS
Source: AAR CS-54 data
4,945
3,863 3,683
2,758
455
BNSF NS UP CSXT KCS
2016 INTERMODAL VOLUMES HANDLED BY U.S. CLASS I RAILROADS (THOUSANDS)
Source: AAR
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• Population Growth = Increased Demand
• Compensation Challenges
• Stresses of Job• Burden of Meeting
Increasing Regulations
Current Motor Carrier Climate: Driver Shortages
Source: FTR; Copyright 2017 by FTR (www.FTRintel.com)
-350,000
-300,000
-250,000
-200,000
-150,000
-100,000
-50,000
0
2011
.Q4
2012
.Q2
2012
.Q4
2013
.Q2
2011
3.Q
4
2014
.Q2
2014
.Q2
2015
.Q2
2015
.Q4
2016
.Q2
2016
.Q4
2017
.Q2
2017
.Q4
2018
.Q2
2018
.Q4
DRIVER SHORTAGE (-)/ SURPLUS (+)2011.Q4 TO 2018.Q4 – CURRENT QUARTER: 2015.Q4
Driver Shortage/Surplus Forecast#Of Drivers
-Surplus-
-Shortage-
-169,498
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Current Motor Carrier Climate:Highway Congestion
Sources: MAP – FHWA Freight Analysis Framework, version 3.4, October 2013 and INRIX
2011 2040 Projections
By 2030, traffic congestion will rob the U.S. economy of $186B
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Big Picture Import Volume
2016 IMPORT VOLUME
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12%
9%
5%
11%
4%3%
2002-2008 2009-2014 2015-2020P
AVERAGE Y/Y GROWTH IN OCEAN CONTAINER SUPPLY AND DEMAND
Supply
Demand
9
Current Ocean Carrier Climate: Vessel Supply Outpacing Global Container Demand
Sources: Maersk, Danish Shipping Finance, BCG, Alphaliner
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The Intermodal Leader
• Length of Network: 32,500 miles• U.S. States in Network: 28• Canadian Provinces in Network: 3• Ports Served: 40• Intermodal Hubs: 25• Length of Track at Intermodal Hubs: 250 miles• Service Schedules: 450+
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The Fastest Intermodal Service in the Industry
*Source: AAR data through April 30, 2017
BNSF INTERMODAL VELOCITY VS. OTHER U.S. CLASS I RAILROADS
BNSF is 12% faster (MPH) than other U.S. Class I weighted average
25
27
29
31
33
35
37
39
17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
MPH
Week
BNSF Average U.S. Class I Railroad Weighted Avgerage
2016 2017
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International Intermodal Service
Shanghai
Source: ProLogis
Seattle/Tacoma
Oakland
LA/Long Beach Dallas/Fort Worth Savannah
Charleston
Norfolk
New YorkChicago
25
2613
Vancouver
Atlanta
25
Toronto
MemphisKansas City
12
New OrleansHouston
Denver
Transit continues to favor West Coast ports.
Port of Entry
BNSF Intermodal Facility
Consumer Market (250 miles)
Ocean Transit Days
Rail Transit Days (5 days or less)
Rail Transit Days (8 days)
Ocean Transit Days (East Coast)
Ocean Transit Days (West Coast)
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0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2008 2009 2010 2011 2012 2013 2014 2015 2016
US CONTAINERIZED AG EXPORTS
West Coast East Coast Gulf Coast
13
U.S. West Coast Advantage Remains
Source: PIERS DATA
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BNSF’s Match-to-Market Program
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BNSF’s Empty Repositioning Programs
Empty Surplus
Empty Surplus
Empty Surplus
Empty Surplus
Exports
Export Location
Empty Surplus
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$1.9 $2.1 $2.0$2.6
$3.1$3.8
$3.4 $3.4 $3.3$2.7
$3.6 $3.6$4.0
$5.5$5.8
$3.9$3.4
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017P
Replacement Capital Expansion PTC Locomotive Equipment
16
Investing to Serve Our Customers
CAPITAL SPENDING OVER THE YEARSIn Billions
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Southern Transcon Projects
Clovis SubDOUBLE-TRACK
Pecos River Bridge
DOUBLE-TRACKSibley Bridge
DOUBLE-TRACK
Panhandle SubDOUBLE-TRACK
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Enhancing Capacity: Northern CorridorCapital Expansion and Maintenance Investment
Capital Investment 2013-2016
$5B+1,000 miles of CTC
+135 miles of double-track
16 new sidings added
16 sidings extended
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Innovating the Process to Provide Connectivity
ISP / ETN / RAILPASS CONNECT TO IMPROVE YOUR EXPERIENCE
Accurate ETAs
Run Time Tables (BASE)
Manage Exceptions
Communication
ISPBCO Connectivity Future EnhancementsETA / ETNBNSF RailPass BNSF RailPass
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