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To: BNSF Consumer Products Customers
05/03/2017

Q2 2017 Message from Katie Farmer

With the first quarter now complete, I wanted to give you an update on what we are focused on for 2017 as we look to continue to create supply chain efficiencies while ensuring capacity is in place to meet future growth trends.

Last year, we moved over 1.2 million intermodal units more than our next closest competitor. The record capital expenditures we made over the past few years have allowed us to expand our network to meet your growing needs while keeping it well-maintained to ensure we are able to run a safe, fluid operation.

In 2017, BNSF is dedicating 70 percent of its $3.4 billion capital plan spend to maintenance. That means nearly 3 million ties and nearly 600 miles of rail will be replaced. Additionally, 20,000 miles of track will be re-surfaced and its ballast cleaned or undercut. We are also focused on bridge upgrades across our network like the Mississippi River Bridge at Memphis. Crews recently completed the third of four planned maintenance windows that involves rebuilding more than 50 percent of the 125-year-old steel bridge. In all, we are replacing 51 spans and adding new concrete piers with project completion planned later this summer.



Annual maintenance contributes more to reliability and consistency in BNSF's service than any other single factor.

Mexico Service Update
Late last year, BNSF and Kansas City Southern announced new joint intermodal service connecting Chicago and Dallas/ Fort Worth with some of the fastest growing consumer and industrial markets in Mexico. The new service provides joint domestic intermodal service five days a week to and from Monterrey, San Luis Potosi or Toluca, Mexico to and from Dallas/Fort Worth or Chicago, with additional southbound service to Laredo, Texas. Customers can also connect to other regions along BNSF's 32,500 mile network including service to/from the West Coast and to/from the Pacific Northwest.

The new BNSF-KCS joint service compliments the Ferromex (FXE) and BNSF existing joint service between Chicago and Silao. Both service offerings provide streamlined customs processing helping customers to avoid long waits at the border. Specific joint schedules as well additional service information can be found here.

Reducing Volatility in the Supply Chain
To ensure a more consistent and reliable delivery experience, BNSF is working closely with customers to understand their "must have by" or shipment need dates. As consumers evolve their purchase habits and e-commerce continues to grow, market requirements are creating tighter delivery expectations. This is driving different requirements for those of us that are a part of the supply chain. In response to these changing conditions, we are piloting a new way we sequence freight in our hubs based on the customer's need date. This initiative involves prioritizing freight at origin to support destination delivery requirements, minimizing left behind units at origin and more closely aligning BNSF service to meet customer delivery needs. We will have an update on initial results of this pilot in my next update.

RailPASS Mobile Application Supporting CARB Compliance in Calif.
More than 20,000 truck drivers have downloaded our RailPASS mobile application, which uses technology to improve productivity for drivers who move shipments in and out of BNSF's 25 Intermodal facilities.

To support the upcoming California Air Resources Board (CARB) compliance initiative, truck drivers are now able to store valid VINs (Vehicle Identification Numbers) in their RailPASS profiles to support expedited gate transactions at our Los Angeles (Hobart and Commerce), Oakland, San Bernardino and Stockton hubs. The new app feature provides an easy way for both drivers and BNSF to validate compliance with the state's Drayage Truck Rule prior to arriving at a BNSF intermodal hub.

Trucking Partners who have a smartphone can download RailPASS from the Google Play Store and the App Store. Following a simple registration process, drivers can view step-by-step tutorials directly through the app. In 2016, drivers saved nearly 8 million minutes using RailPASS.

We remain committed to providing the best intermodal rail service in the industry. Please know your business is important to us and we look forward to continuing to grow with you as your business grows during 2017 and beyond.

Thank you for choosing BNSF Railway as your transportation service provider.

With gratitude,

Katie Farmer
BNSF Railway
Group Vice President, Consumer Products

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