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To: BNSF Consumer Products Customers

Network Update for Friday, August 12, 2016

Operational Performance
The operation experienced steady performance this week with good fluidity across the network. While relatively unchanged from the prior week, velocity for cars, trains and locomotives continues to run several percentage points better than levels reported from August of last year. Total volume on the network also held steady this week at nearly 197,000 units with total trains on the system climbing to 1,470, the system's highest weekly average since November 2015.

As we have reported, maintenance activity remains high around the network, particularly along our Northern Corridor as well as on our Pikes Peak Subdivision south of Denver. Last week, our crews completed a second round of repairs to a key bridge on our Spokane Subdivision near Sandpoint, Idaho. The repair work caused some significant service disruptions during the past two weeks, but with traffic flows normalized through this location, the average number of total trains held has declined substantially over the past few days.

Last Sunday, a suspected lightning strike caused a wildfire that suspended service on a portion of our Columbia River Subdivision, approximately 85 miles west of Spokane, Washington. Fire crews prevented the blaze from impacting a nearby bridge and, once extinguished, BNSF crews quickly replaced more than 300 damaged rail ties, allowing service to be restored in less than 24 hours. With the ongoing threat for wildfires in the West, we continue to closely monitor high risk areas and will respond swiftly to any incidents.

BNSF Appeals Ruling in Southern California Intermodal Gateway (SCIG) Case
Last week, BNSF, along with the Port of Los Angeles, announced it will appeal a lower court ruling blocking our plan to build a new rail facility near the ports of Long Beach and Los Angeles. On March 30, 2016, the Contra Costa County Superior Court ruled that the SCIG proposal's environmental analysis was insufficient. BNSF's appeal will contend that the ruling is incorrect, as the court applied an inappropriate evidentiary standard and disregarded a comprehensive eight-year environmental review in making its ruling.

With its location on an existing industrial site between the Terminal Island Freeway, Sepulveda Boulevard and Pacific Coast Highway, SCIG would provide direct access to the Alameda Corridor, which would reduce the travel time for containers. Currently, more than one million containers move annually on trucks from the ports to BNSF's Hobart facility, located 24 miles away. If approved and once in operation, SCIG would provide considerable efficiency benefits for customers, as well as improve the region's air quality.

Service Expectations for the Week Ahead
After several days of mostly dry triple-digit heat across the southern Plains and Texas, a pattern shift will bring some cooler temperatures and storm chances to the region this weekend and into next week. Localized heavy rainfall in parts of central and eastern Texas is likely, along with the potential for flash flooding and washouts. Otherwise, most areas of the network will experience favorable operating conditions during the upcoming week with no significant service interruptions due to weather expected.

Below is a look at the key operational performance categories for the week ending August 11:

Total trains held for the week increased by nearly five percent to an average of 53.6 trains held versus 51.1 trains during the prior week.

Versus the August 2015 average: better by 12.8%

Total trains on the system was up by nearly three percent with an average of 1,470 trains on the system versus 1,434 trains during the prior week.

Locomotive velocity, measured in miles per day (MPD), was 297.6, which is essentially unchanged from the 298.6 MPD recorded the prior week.

Versus the August 2015 average: better by 6.0%

Car velocity was down by more than one percent at 224.0 MPD versus 226.8 MPD recorded the prior week.

Versus the August 2015 average: better by 3.2%

Train velocity, measured in miles per hour (MPH), was down by nearly two percent from the prior week at 19.2 MPH.

Versus the August 2015 average: better by 3.9%

Total volume was essentially unchanged with 196,723 units moved in Week 31 (ending August 6) versus 196,238 units in Week 30 (ending July 30).

Terminal dwell increased by nearly one percent at 24.6 hours versus 24.5 hours recorded the prior week.

Versus the August 2015 average: up by 0.3%

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.

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