Industrial Products Network Update for Friday, September 29, 2023

OPERATIONAL PERFORMANCE
BNSF operating teams are focused on maintaining positive performance momentum. As we move into October, our peak season for track maintenance activity is winding down. While projects are still ongoing in multiple locations, trains are efficiently moving crops to market in support of fall harvest, and we remain well-positioned to handle peak holiday shipping season.

As reported on Monday, BNSF terminated an embargo that impacted all transborder traffic destined for interchange with Ferromex (FXE) at our Eagle Pass and El Paso, Texas gateways. Traffic to/from Mexico has since normalized.

Despite this interruption, overall car velocity increased versus the prior week as well as the average level for August. Average terminal dwell was reduced by more than three percent from last month, and our local service compliance measure exceeds 92 percent.

CAPITAL EXPANSION
On our Needles Subdivision, a 180-mile section spanning from Barstow, California to Needles, we’re adding approximately 30 miles of a third main track in a multi-year effort to increase capacity on this busy portion of the Southern Transcon. Last year, 10 miles of triple track were put into service on this subdivision ahead of peak intermodal season, and this week we completed an additional 8-mile segment between Homer, California and Ibis. The final segment is on pace to be completed between West Needles and Ibis by the end of the year.

First BNSF train travels over the new section of triple track on the Needles Subdivision – September 2023

Further east on the Transcon, BNSF engineering teams completed a six-mile segment of second mainline track in south-central Kansas on the Emporia Subdivision, which runs from Kansas City to Wellington. This work is part of a multi-year effort to add several segments of double track to support growth.

A BNSF train heads west on the new segment of double track over Lake El Dorado. Kansas – September 2023

LABOR BARGAINING UPDATE
BNSF is pleased to announce that we have reached paid sick day and work modernization agreements with all twelve labor unions that represent BNSF employees. On September 18, a tentative agreement, subject to ratification, was reached with the Brotherhood of Maintenance of Way Employees Division – International Brotherhood of Teamsters (BMWED), which included sick days.

Yesterday, we also announced that a system-wide agreement was reached with the International Association of Sheet Metal, Air, Rail and Transportation Workers, Transportation Division (SMART-TD) that will significantly benefit ground service employees at BNSF. This breakthrough tentative agreement follows up on the mandatory local bargaining items from last year’s Presidential Emergency Board (PEB) and goes well beyond. It comes after several months of negotiations, and pending ratification by SMART-TD's members at BNSF, it is expected to bring positive changes to both the professional and personal lives of these employees. These enhancements to the agreement will allow for more predictable schedules for our team members and contribute to more consistent and reliable service for our customers. The cooperation between SMART-TD and BNSF marks an important step forward in supporting the well-being and satisfaction of these employees, ensuring a more balanced and efficient work environment. If the agreement is ratified, 100% of BNSF Train, Yard and Engine team members will have work/rest agreements available to them.

SERVICE EXPECTATIONS FOR THE WEEK AHEAD
For much of the BNSF network, favorable weather for early October is anticipated with no major storm systems in the forecast during the next several days. As high temperatures continue to linger in parts of the Southwest, areas like Phoenix have experienced heat-related service impacts. Additional personnel from other locations have been sent to our intermodal facility in Phoenix to assist with manpower to support service recovery and we will continue to monitor weather conditions in the area and deploy countermeasures as needed.

We thank you for your business and appreciate the opportunity to serve as your transportation service provider. We welcome your feedback and questions.