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To: BNSF Lumber and Panel Customers
12/19/2008

BNSF to Hold Current Rates in February 2009 - Enhancements Made to LOGs Program

In response to continued challenges in the lumber and housing markets, BNSF will not take wholesale rate increases for Lumber and Panel products in February 2009. In addition, BNSF has made enhancements to its Loading Origin Guarantees (LOGs) program to help shippers better react to current market conditions.

Rate Adjustments
In accordance with BNSF’s Industrial Products Price Calendar, BNSF is scheduled to take rate adjustments on February 15, 2009. However, after considering current market conditions, BNSF will hold current rate levels for the majority of its lanes. BNSF will reassess the market conditions in August 2009, as outlined by the BNSF Industrial Products Price Calendar.

A few lanes are still subject to rate adjustments, and rate documents covering these adjustments will be available for viewing on the BNSF Web site at the link below on or before February 15, 2009: http://domino.bnsf.com/website/prices.nsf/ba3?ReadForm.

LOGS Program Enhancements
In addition, BNSF has made enhancements to its LOGS program to help customers better adjust to the current market conditions. These changes will become effective on February 16, 2009.

  • Equalized Discounts – Panel products centerbeam discounts will now match Lumber products centerbeam discounts ($300).
  • More Flexibility for Car Order Variances – In response to the increasing volatility in the current Lumber market, BNSF is adjusting car order variances to be calculated monthly, rather than weekly. We will also be increasing the variance limit for orders over the LOGs commitment. Permit holders will now have the ability to decrease orders by 10% below their commitment monthly, or 25% above their commitment monthly. This change is designed to help shippers more effectively manage unexpected surges or drops in volume.
  • ACH Deposits – Customers who elect to receive their LOGs discount by allowance will receive their payment faster by utilizing ACH deposit (in two days, instead of two weeks). Customers will also receive payment details when their deposit is made.
  • Additional Incentives – In 2009, BNSF plans to reward LOGs permit holders by offering additional incentives or allowances in certain lanes or markets, as warranted by shifts in market conditions, or to take advantage of emerging opportunities.
    o For example, BNSF will be offering LOGs permit holders an additional $300 freight deduction for freight moving from the Seattle, Portland and Eugene rate groups to the Los Angeles and San Diego rate groups in 60’ centerbeams. We’re offering additional allowance dollars to help BNSF shippers better compete with over-the-road and barge traffic moving green lumber into these markets. Therefore, a 13-, 26- or 52-week LOGs permit holder can now receive up to $600 off the freight bill for traffic matching the above descriptions.

Finally, the changes announced in December 2007 will continue to apply, including:
  • Equalized Discounts – Customers who reserve empty centerbeams for 13, 26 or 52 weeks will receive a $300 freight reduction on all BNSF applicable documents. Other equipment will be equalized for 13, 26 or 52 weeks at various discount levels.
  • Lower Penalties – Customers who reserve empties for 52 weeks will benefit from a reduced penalty of $100 for unused car orders.
  • Rollover Commitment – Customers who reserved empties for 52 weeks in 2008 will have the option to roll up to that same commitment into 2009.
If you have any questions regarding these changes, please contact your BNSF Sales Representative at 888-428-2673, or email ViCC@bnsf.com.

Your business is important to us. Thank you for choosing BNSF as your transportation service provider.

If you have any questions, please send an email to Customer.Notifications@bnsf.com