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To: BNSF Intermodal Customers

Fall 2015 Message from Katie Farmer

Dear BNSF Customer,

As we reach the midpoint of the fall peak season, I wanted to take this opportunity to provide an update regarding improvements to our network and facilities, which have enabled faster and more reliable service. Overall, our intermodal velocity is much improved this year. When we compare last month's average velocity to the previous two years, we are running more than nine percent faster this year than October 2014 and nearly three percent faster than October 2013.

We also evaluate our performance versus the other U.S. Class I railroads. In the third quarter of 2015, BNSF Intermodal widened its lead over the rest of the industry in velocity performance, operating 12.5 percent better than the industry average. That lead compares favorably to the 10.7 percent and 9.5 percent velocity leads we enjoyed in the third quarters of 2014 and 2013, respectively, even with growing volumes on our network each year. Last month, BNSF recorded its highest weekly volume of 2015 at nearly 215,000 units on our network, which is within approximately 4,000 units of the weekly peak volume record for the industry set by BNSF in 2006.

Hub Capital Projects Update
BNSF is actively engaged in several multi-year expansion projects that are adding track, cranes and additional resources to intermodal facilities across our network. Our intermodal network relies on efficient operations at our pick up and drop off points - our hubs - to keep freight flowing. So, a significant amount of capital expansion has been - and will continue to be - devoted to our intermodal facilities. From 2006 through our planned commitments in 2015, we will have invested approximately $1.3 billion in our intermodal hubs to expand capacity and improve velocity and service.

Specifically, crews are completing construction of a new production track at our Alliance Intermodal Facility in Fort Worth, TX, which will give us a total of five production tracks at that location. Production tracks are used for loading and unloading trains. In addition, we have recently doubled production track capabilities at our Phoenix Intermodal Facility.

While only three months old, the recent changes to our storage policy are showing signs of effectiveness, with dwell time improving at key locations across the system. Improved dwell times are resulting in better velocity, throughput and driver efficiency, even amid higher volumes. We look forward to our continued collaboration in reducing dwell so that we can minimize waste in the supply chain and support future growth.

North Line Update
Our recently launched Domestic North Line Service is a great example of how our investments over the last several years are allowing us to offer the fastest and most consistent intermodal service in the industry. New schedules have been in place since mid-September and our expedited service is averaging 90 percent on-time performance for customers moving shipments between Chicago and Seattle.

BNSF engineering crews are making great progress in completing additional capital expansion projects along our northern corridor. The final signal cutover of Centralized Traffic Control (CTC) on our St. Croix Subdivision, which runs between St. Croix, Minnesota and La Crosse, Wisconsin, was completed last month. CTC is a signaling system that allows a central dispatcher to control railroad switches and manage train flows more efficiently. In addition, we placed into service an additional five miles of double-track through La Crosse on our Aurora Subdivision on October 6. Both projects are supporting improved traffic flow and additional capacity along the busy Twin Cities to Chicago corridor.

Southern Transcon Update
We recently completed our final 2015 Southern Transcon double-track project on BNSF's Panhandle Subdivision near Avard, Oklahoma. The last portion of the project was finished in late October, resulting in nearly 10 miles of new double-track now in service. With this section complete and in service, only seven miles of single track remain on our Southern Transcon route. Those last seven miles consist of three major bridge projects, and we have started the initial work earlier than originally planned on a bridge that crosses the Pecos River, near Fort Sumner, N.M. That bridge project is expected to be completed by the end of next year.

We will continue to make the necessary investments to provide the best intermodal rail service in the industry and to earn your business every day. Thank you for choosing BNSF Railway as your intermodal transportation service provider.

With gratitude,

Katie Farmer
BNSF Railway
Group Vice President, Consumer Products

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