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To: BNSF Industrial Products Customers
06/03/2016

Network Update for Friday, June 3, 2016

Operational Performance
This week, the operation generated relatively steady performance while confronting service challenges, primarily from flooding issues, which have impacted parts of the network. After setting new year-to-date highs for both average car velocity and locomotive velocity in the prior week, we experienced slight declines in velocity for cars, trains and locomotives as a result of adverse operating conditions in key locations. In addition, the number of total trains held more than doubled this week, however, it remains nearly half the average level recorded during the month of May last year.

Heavy rainfall in parts of the central and southern Plains during the past week caused some disruptions to train flows, particularly in Texas. Last weekend, three subdivisions in the Houston area were forced out of service due to washouts in several locations. While the Conroe Subdivision north of Houston re-opened within 24 hours on Saturday, parts of the Galveston and Houston Subdivisions remained closed until earlier this week. All subdivisions in the area have returned to full service, however, trains on the Galveston Subdivision southwest of Houston may experience delays today due to high water. With more rain expected, flash flood watches are currently in effect throughout much of central and eastern Texas. BNSF crews continue to monitor and evaluate affected areas for any track issues.

We are also monitoring the extreme heat currently impacting the desert Southwest. Record triple-digit temperatures nearing 120 degrees in parts of southeastern California may require temporary speed restrictions on our Southern Transcon through the area. Additional support crews have been scheduled into the weekend to address any track issues along our Needles Subdivision between Barstow, California and the Arizona state line.

On June 1, BNSF completed a reorganization of our Operations, which includes the Transportation, Engineering and Mechanical departments, to better align network resources with the freight needs of both current and future customers. The new structure consolidates three operating regions into two (North and South) and reduces the number of divisions from 12 to 10, which are split evenly between the two regions. With our strong network efficiency thanks, in part, to the large capital investments that we have made over the past few years, as well as other technological enhancements, the timing was right for this reorganization in order to address the challenges posed by the current business environment. Customers should not notice any differences in terms of how their shipments are managed by the railroad. This reorganized operational structure will continue to drive performance improvements as well as effectively position BNSF for future growth opportunities.

Reminder on New Inspection Checklist Available for Heavy Duty Customers
As part of providing customers with the best service possible, BNSF is focused on ensuring that only safe, high quality cars are loaded and billed for movement. In this ongoing effort, BNSF recently distributed a new, easy-to-read pre-loading inspection checklist for shippers utilizing QTTX and KRL heavy duty railcars. This checklist can help avoid shipment delays as well as prevent loaded cars from being "bad ordered" due to defects.

Prior to loading, customers should inspect their railcars utilizing the checklist, ensuring there are no missing, broken, or leaking parts. By being proactive and checking for defects in advance, customers can avoid dealing with the expense of transloading, which can take multiple days and thousands of dollars depending on the size and weight of their shipment.

If any questions arise during the inspection process, please do not continue with loading. If the railcar is defective and requires replacement, please contact the BNSF Equipment Team (FlatsandGonds@bnsf.com). If there are any issues encountered during the inspection process, please contact the BNSF Open Top Loads Team (OpenTopLoads@bnsf.com) for clarification. As always, you can contact your BNSF marketing representative with any questions.

Service Expectations for the Week Ahead
The risk for additional washouts in parts of Texas due to heavy rain and flooding will remain high going into the upcoming week. We continue to monitor conditions closely and will implement procedures, including additional track inspections and re-routing trains, in response to any impacted areas. Much drier weather is expected for Texas and the Gulf Coast by the middle of next week as well as slightly cooler temperatures in the desert Southwest.

Below is a look at the key operational performance categories for the week ending May 31:

Total trains held for the week increased by more than 117 percent to an average of 45.6 trains held versus 21.0 trains during the prior week.

    Versus the May 2015 average: better by 43.4%

Total trains on the system was up by more than two percent with an average of 1,221 trains on the system versus 1,194 trains during the prior week.

Locomotive velocity, measured in miles per day (MPD), was 304.1, which is down by nearly two percent from the 309.7 MPD recorded the prior week.
    Versus the May 2015 average: better by 11.1%

Car velocity was down by nearly three percent at 229.5 MPD versus 235.6 MPD recorded the prior week.
    Versus the May 2015 average: better by 6.4%

Train velocity, measured in miles per hour (MPH), was down by more than three percent at 22.0 MPH versus the 22.7 MPH recorded the prior week.
    Versus the May 2015 average: better by 22.2%

Total volume was up by more than two percent with 185,439 units moved in Week 21 (ending May 28) versus 181,500 units in Week 20 (ending May 21).

Terminal dwell increased by more than six percent at 23.6 hours versus 22.2 hours recorded the prior week.
    Versus the May 2015 average: better by 2.5%

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.

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