T h e e m p l o y e e m a g a z i n e o f T e a m B n S f J a n U a R y / f e B R U a R y 2 0 0 7

Fuel by RailBy leveraging BNSF’s

expansive rail system, the Industrial Products Business Group has established a fuel distribution network that is experiencing huge demand.

Page 8

Velocity ValidatedThanks to BNSF people

everywhere rallying around the six velocity

measures introduced early in 2006, BNSF was able to

handle the growing volumes of business.

Page 4

Also Inside5 Strategic Focus Areas

A Q&A with Chairman, President and CEO Matt Rose focus-es on BNSF’s Pyramid for Success, looking at progress in

the five Strategic Focus Areas last year. Page 2

2007 Safety Plan to Increase Focus on Critical Work Practices

Last year, BNSF had an injury-frequency ratio that was higher than the 2005 ratio. This year, new safety initiatives

are being put in place and focus on critical work practices. Page 6

RAIlwAy StAff

Vp, Corporate Relations Mary Jo Keating

editor: Susan Green

Contributing photographers: Chuck Gierhart, James Motes-Con-ners, Jennifer Strunk, Clarke Sutphin and Brent Thomas.

Got A StoRy IdeA? Send story ideas to BNSF Railway Editor, via Outlook to: Communications, Corporate, or send by Internet to: susan.green@bnsf.com or marietta.collins@bnsf.com.Or mail to:BNSF Corporate RelationsP.O. Box 961057Fort Worth, Texas 76161-0057

AddReSS ChAnGeS employees: To review your address, call company line 435-3345 or dial 1-800-274-6739 or review and change your address online via BNSF ‘s Intranet site at employee.bnsf.com. Go to the My Self page, Life Events and click on Change of Address. Or you may complete and return a Personal Information Change Form (#12796) to the administrative office; mail it to Human Resources Information Systems, P.O. Box 961055, Fort Worth, Texas 76161-0055; or fax it to 817-352-7109.

Retirees: Send address changes and requests to receive Railway after you retire to BNSF Corporate Relations, P.O. Box 961057, Fort Worth, Texas 76161-0057. Please include your Social Security number.

our vision is to realize the

tremendous potential of BnSf

Railway Company by providing

transportation services

that consistently meet our

customers’ expectations.

2 RAIlwAy I JANUARY/FEBRUARY 2007

on the CoVeRAt the Belen, N.M., fueling pad, three trains line up for movement west. Photo by Clarke Sutphin.

overall, how are we doing with initiatives in each of the five areas? We continued to enjoy tremendous success from a financial perspective, which is a direct result of our

Franchise Strategic Focus Area. We made progress in Service, but still are not meeting all our customer expectations, plus we need to continue to take costs out of the business.

All in all, 2006 was an outstanding year. Just consider the fact that in our coal business we hauled 10.8 percent more tons than in 2005, thanks to the ability of our people, who went above and beyond to keep the coal network fluid.

Overall, we enjoyed 6-percent volume growth. This is particularly impressive when you look at the last three years of year-over-year record volumes, and the challenges we had in regard to people and assets. In fact, our unit volume has grown by 30 percent since 2002, making us the fastest-growing railroad in North America over the last five years. We were able to sustain the growth last year because of our strategies for Franchise, Service and People.

On the People side, our safety performance for 2006 was a disappointment. We lost three members of our team last year, and our reportable injuries were above 2005’s by 11 percent, meaning 61 more people – 601 total – were injured while at work. Also, our overall injury-frequency ratio was 7 percent higher than in 2005. This year, we need to reverse these trends, and each of us must renew our commitment to have an injury-free workplace.

There was some good news in safety as we made significant strides in reducing the system-wide injury severity ratio last year; it was 20 percent below the 2005 level and 7 percent below the 2006 goal. In addition, several work groups achieved our injury-frequency ratio goal of 1.15, including the Nebraska, Chicago and Twin Cities divisions; the entire Signal Department; and the Mechanical facilities at Glendive, Havre, Northtown, Galesburg, Argentine, Havelock and Topeka.

Also on the People side, I’m pleased with the progress we’ve made on our succession planning and transitioning the workforce, which has put us in a much better position to handle this continued growth.

On the Return side, we’ve also made good progress and, for the second year in a row, our level of investments is warranted by the results we’re seeing.

Under our Community Strategic Focus Area, we have made progress in lowering our risk of hazardous material incidents, thanks to better protection of our assets and new tank car standards. I also appreciate the attentiveness of our train crews when it comes to grade crossings and train whistle compliance.

one reason the Pyramid for Success was developed was to help employees better understand the strategies and their individual roles. do you think employees have a clearer picture of how they contribute to BnSf’s success?

I see a lot of employees talking about the strategies and initiatives, and thinking about how they can make an impact. I think our decision-making is better aligned and there’s more communication, particularly two-way communication. We have more technical assistance, such as the new News Network [a digital news center that is being installed across the system this year], which will become a reliable news source, especially for our employees in the field.

Velocity was a major strategy for two of the Strategic focus Areas (Service and Return). Are you satisfied with the progress we made in 2006?

During the first half of the year, progress was slow, but during the second half, we really started seeing the results of our efforts, and our numbers improved. I truly believe without our focus on improving velocity, we wouldn’t have been able to handle the increased volumes.

In 2007, we will continue to maintain our focus on velocity due to its numerous benefits, including creating additional capacity, improving service, lowering costs, etc. Velocity is similar to safety and will always be critical to our success. Our people are taking it seriously and working very hard to accomplish the mission. We’ve set stretch, but attainable velocity goals for 2007, and I’m confident we can continue to improve.

Achieving alignment with our front-line workforce is another key strategy. did we make progress in this area last year? what do we need to do in 2007 to make more improvement?

While we are not yet where we want or need to be, we have made progress and several initiatives are moving this strategy forward. For example, about 12,000 union-represented employees now participate in our profit-sharing program. We also introduced Total Rewards last year, and it provides employees a look at their total compensation package – such as healthcare benefits, retirement, paid time off, a 401(k)

5 Strategic focus Areas: A Q&A with Matt Rose

Last year, BNSF introduced its Pyramid for Success that identified five Strategic Focus Areas – Franchise, Service, Return, People and Community – to ensure the railway is prepared and positioned for continued growth and effectiveness. In this interview with Matt Rose, BNSF chairman, president and CEO, we look at progress in those five areas.

RAIlwAy I JANUARY/FEBRUARY 2007 �

BnSf Strategicfocus Areas

Pyramid for Success

franchise > Balanceresourcesto promotegrowthandsupport stableproductsandservices > Developnewproductsand services > Enterintorelationships, partnerships,alliancesand mergersthatimproveour company

Service > Meetcustomerexpectations (damage-free,ease,service, etc.) > Maximizevelocitytoincrease capacityandimprove customerservice

Return > Investintherightassetatthe righttimetokeepcorenetwork strongandtoincreasecapacity > Achievesustainablereturns bybusinessunitthatexceed thecostofcapitaltojustify investment > Leadtherailindustryin efficiency > Utilizeourresourcesto maximizevelocity > Promotesoundregulatory andpublicpolicy

people > Achievethesafetyvisionof eliminatingaccidentsand injuries > Winthroughleadership > Achievealignmentwithfront- lineworkforce > Championprogramsthat attract,retainandmotivate (compensation,diversity, work/lifebalance,etc.) > Developandtransitionthe workforce

Community > Leadinpublicsafetyperfor- manceandenvironmental stewardshipinsurface transportation > Proactivelyparticipateinand supportcommunitieswhere weoperate

knowledge transfer, succession planning and development plans.

We are looking at the total hiring process from recruiting, pre-hiring, on-boarding, training and then ongoing development to make sure we are building the best workforce for the future. The advancements in technology also help in the transition, because the current pool of candidates better understands and is more comfortable with technology’s increasing role in our business.

what are some of the key regulatory and public policy issues BnSf and the rail industry will face in 2007?

There are several key issues we are facing as an industry. Terrorism is one, so we are actively working with the Department of Transportation, Homeland Security and the Federal Railroad Administration (FRA) in regard to new procedures for rail transportation, including moving hazardous materials, tank car qualifications, technology used along dark territory and switch detection.

Regulatory reform is another critical area. The welfare of our employees is closely tied to the welfare of our industry and company, so we will continue to communicate with all employees about the importance of a regulatory structure that will allow the railroad to afford the capital it requires. You can look at other industries where financial conditions caused great harm to the employee base, and we must work to prevent that. Therefore, we will be asking our employees for their assistance.

what are some other significant achievements we made in 2006 on our initiatives?

We made significant strides in ETMS, which will help improve safety and service reliability. Early this year, the FRA approved BNSF’s Product Safety Plan to allow BNSF to begin implementing ETMS on portions of our network. The ETMS pilot project that we have operated on our Beardstown subdivision in Illinois since October 2004 was instrumental in proving the value and safety of this technology, and I want to thank all those employees involved. This technology will be good for our employees, our communities and our customers.

If you look at the 12 years since the BNSF merger and consider our competitive vitality – new people, new markets, new technology, new locomotives, new facilities, new trackage – you can get a glimpse of how promising our future looks.

what are some of the major challenges we still face for 2007 and beyond?

2007 will be another year of growth, although at a slightly slower pace than we’ve seen the last three years. Sustaining that growth over the long term is still a major challenge. It is imperative that we continue to grow. To do this, it comes back to our vision: To realize the tremendous potential of BNSF by providing transportation services that consistently meet our customers’ expectations.

While we have handled tremendous volumes compared with other railroads, we are still not at the level of service our customers expect, nor at a level that we are satisfied to deliver. So, for

plan and profit-sharing – in one centralized, online location. Pay is a key element for alignment, and we want our employees to enjoy the financial returns when we achieve our operational goals.

Opening up the lines of communication is another way we’re trying to improve alignment, and our Labor Relations Web site is helping make inroads here. It provides a lot of useful, timely information about our labor agreements, benefits, compensation and other news affecting our union-represented employees.

Workforce alignment is a work in progress, and we’re trying hard to better understand what we need to do differently.

Achieving alignment also is affected by the current bargaining round, which has been difficult. Here’s some background and a quick overview of the current situation. We joined “national handling,” and in early 2005 began the round in earnest. Initially, the industry focused on technology-driven productivity, led by a proposal for ETMS-based (Electronic Train Management System) one-person crews coupled with unprecedented employee protection. However, there was bitter push-back from union leaders and an uncertain regulatory reception, and the industry withdrew the one-person crew proposal in mid-2006.

Now, the issues center around compensation, healthcare and other productivity measures. As I mentioned before, we would like to see our people share more in the company’s recent financial achievements and we have about 12,000 participants in our profit-sharing program. But, just as with our non-union employees, higher upside in these times has to come with more risk-sharing and participation in productivity growth. BNSF’s profit-sharing concept helps to strike a good balance. We will continue to work hard to settle all the issues, and I am hopeful the round will be concluded sooner than later this year.

Another important initiative is improving work/life balance, especially for our front-line supervisors. have we made progress on this initiative? will other employees begin to see the benefits from work/life balance initiatives?

We have a steering committee from the various disciplines, and they are looking at a variety of initiatives that can help improve work/life balance, including vacation relief and days’ off schedules. Even though railroading is a 365-days-a-year business, we are committed to finding solutions to better work/life balance as well as more predictable work schedules for our workforce.

what have we accomplished in regard to transitioning the workforce since many employees are eligible to retire in the next several years?

Transitioning the workforce is another important strategy under our People focus area. While we hired nearly 4,600 people last year, which could be an annual record for BNSF, it’s not all about the numbers. We are addressing many issues, such as recruiting and hiring,

2007 and beyond, restoring that level of service is critical. That’s where our Strategic Focus Areas are so important – they will help make us a better franchise so customers will want to use our services.

Finally, as I mentioned previously, we need to re-double our efforts on safety. We all realize that having an injury-free workplace is still the most important issue for BNSF.

� RAIlwAy I JANUARY/FEBRUARY 2007

Services, Marketing, Human Resources and others – took an active role in velocity improvements, the Operations team identified several initiatives at the beginning of last year to increase the velocity of BNSF locomotives and railcars.

Every element of operations was scrutinized – from loading and unloading processes with shippers, to the scheduling of track and signal maintenance, to the impact of train makeup on intermediate switching and terminal handling. Results were slow to come, but within six months, it became clear the initiatives put in place were working.

“By mid-year, we felt very confident and good that we had picked the right initiatives,” says Ice. “Most of all, we felt great when everybody rallied around velocity. We then started to see plans come together and improvements followed in the second half of the year.”

For example, Transportation focused especially on making terminal dwell-time improvements. On average, dwell time improved across the BNSF system from 27 hours in 2005 to 24 hours in 2006. “Three hours may not sound like much but it’s huge when you consider we have between 40,000 and 50,000 cars in active inventory at any given time,” says Dave Dealy, vice president, Transportation.

The Mechanical Department’s strategic initiatives contributed to improving train throughput by making BNSF’s locomotive and car assets more available. While the Locomotive MPD goal was not achieved by year’s end, there was steady progress. “With the focused effort of thousands of BNSF people across our network, locomotive velocity did improve – by more than 2 percent in the fourth quarter of 2006, measured in average miles per day, compared with the same 2005 period,” says Craig Hill, vice president, Mechanical and Value Engineering. “This improved efficiency was the equivalent of adding 124 locomotives to our fleet.”

each of the measures had quarterly thresholds, targets and goals. A quick look at where BNSF was at the beginning of 2006 and at the end shows the successes made throughout the year:

Locomotive miles per day (mpd) – Fourth- quarter 291.5 mpd compared with 284.3 mpd for the first quarter.

Ag car miles per day – Fourth-quarter 175.6 mpd compared with first-quarter 164.7 mpd.

Merchandise car miles per day – Fourth- quarter 122.4 mpd compared with first quarter 109.6 mpd.

Coal cycle index* – Fourth-quarter of 142.3 percent compared with 141.4 percent in first quarter.

Intermodal container transit days* – Fourth- quarter 5.1 compared with first-quarter 5.3.

Intermodal trailer transit days* – Fourth- quarter 2.7, same as first quarter. * In these measures, the lower the number, the better.

A RecommitmentThe primary focus of velocity is to improve

cycle times and increase car and locomotive miles per day. Velocity takes into account how every piece of the service puzzle fits into place to make sure operations move quickly and smoothly to get customers’ goods where and when they need to be.

While velocity is not new to BNSF, the need to focus and recommit to it last year became clear following several years of back-to-back volume growth. That growth was pushing the limits of BNSF’s physical franchise.

“In 2006, we came off of three years of tremendous volume growth,” says Carl Ice, chief operations officer. Then consider that last year alone, BNSF moved 45 percent of all unit growth of the seven Class 1 carriers, meaning the other six split the remaining 55-percent growth.

“Last year was very challenging, but we were able to handle the growth, thanks to efforts of Team BNSF to improve velocity and through our capital expansion program. If we hadn’t improved velocity, we wouldn’t have been able to manage the volumes,” says Ice.

The first half of 2006 was a launching period for velocity. While every department – Technology

Engineering’s Maintenance Excellence program also netted velocity results by decreasing the daily slow-order hours, which enhanced throughput. “With 10 of the 13 divisions experiencing the planning and scheduling benefits of Maintenance Excellence, there was a 6-percent decrease last year in slow-order hours per day,” says Greg Fox, vice president, Engineering. “Also, Engineering people were instrumental in helping BNSF realize the benefits of the 2006 capital improvements, ensuring track and facility expansions were timed to meet the increasing demands on BNSF’s physical plant.”

With the focused effort of thousands of BNSF people across the network, overall railcar velocity improved in the fourth quarter of 2006 (compared with the 2005 fourth quarter) by nearly 9 percent, measured in car miles per day – the equivalent of adding 7,600 railcars to our car supply. Here are just some of the steps undertaken last year to eliminate inefficiencies and gain more productive use of track, terminals and equipment...and drive the velocity measures toward goal.

Meeting the GoalsOne of the biggest velocity improvements last

year was in the Merchandise Car Miles Per Day measure, and achieving this goal was the result of multiple departments and people working together; much of the initial focus began with the Service Design & Performance (SD&P) team.

SD&P looked at ways to improve the velocity of merchandise cars “in train” and on reducing car dwell time, both when BNSF and the customer are in possession of the equipment. In some cases, Transportation Service Plans (TSP) were modified and the frequency of train operations increased. In other cases, merchandise trains were made longer so there were fewer work events and departures.

In BNSF yards across the system, a major velocity focus was on improving dwell time. On average, termi-nal dwell time improved from 27 hours in 2005 to 24 hours in 2006.

Velocity ValidatedBy Susan green

2006VolumesManaged,ThankstoRallyingAroundMeasures

Velocity took center stage at BnSf last year, with the adoption of six corporate-wide measures aimed at reducing the time that freight is stationary as well as the number of times that it is handled.

RAIlwAy I JANUARY/FEBRUARY 2007 5

For 2007, the following velocity goals have been established. One change is how intermodal (transit days) are grouped. In 2006, transit days were based on what type of train the van/con-tainer rode on; for 2007, grouping is by car kind instead of train.

2007 Measures and Quarterly Goals 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Locomotive miles per day/active road fleet 296.3 302.4 302.4 303.5

Agricultural car miles per day/active car fleet 175.6 178.8 183.0 183.0

Merchandise car miles per day/active car fleet 118.0 122.4 122.5 126.7

Coal cycle index 134.5 131.7 134.0 135.4

Intermodal – container transit days 4.92 4.85 4.73 4.78

Intermodal – trailer transit days 2.34 2.28 2.26 2.29

• Ag and Merch active car cycle data is measured as miles per day on the BNSF system.

• Locomotive data is measured as miles per day.

• Coal cycle time starts with the time the loaded train is released from the mine, followed by transportation time to the utility, and stops when the train arrives to spot at utility. The cycle time starts again with the time the train is released from utility, followed by transportation time of the empty train back to the mine.

• Intermodal is based on average time between cut-off and deramp or interchange delivery. Includes units in business segments 3 0 (International Intermodal) or 3 2 (Domestic Intermodal) and that traveled on train symbols M, P, Q, S, or Z and that have car kind K or V. Container service includes units with equipment type K (containers); trailer service includes units with equipment type V (vans).

Also, the SD&P group worked side by side with divisions that experienced velocity “hiccups” in their merchandise traffic. For example, early last year, weather-related train delays on the Pacific Northwest Division led to congestion in multiple yards. Once the division recovered, SD&P spent months analyzing the division’s merchandise car flow. Customers were contacted to review their activities and, where feasible, make changes to switching and blocking patterns. The efforts are paying off today as the PNW continues experiencing one of the wettest winters on record – and merchandise trains are making schedules.

On the Gulf and Texas divisions, where plastics business originates in covered hoppers, SD&P hosted a symposium with these customers to help them better understand how and when they could release cars from storage to reduce the amount of time the cars were held in BNSF’s local terminals. Also, to keep eastern gateways for this business flowing, BNSF took corrective actions, revamping the yard at Dayton, Texas.

As part of BNSF’s carload reshape initiative, AIM (Assess. Improve. Maximize.) also plays a role in improving velocity. One of its objectives is to optimize local operations to use capacity more efficiently. Every customer’s needs, operations and physical plants are unique; after a thorough assessment of each through the AIM process, BNSF is able to introduce operational standards to improve efficiency, reduce carload equipment cycle times and improve pipeline control between shippers and receivers.

working togetherOrganizational alignment between

Agricultural Commodities’ commercial and operations teams and Transportation last year improved communication and accountability that contributed to gains in Ag Car Miles Per Day – 175.6 mpd by the fourth quarter compared with 164.7 mpd in the first quarter – as well as on-time performance (OTP) by year’s end.

With the alignment, both groups were better able to understand the economic and operational issues challenging BNSF’s Ag business and its customers; this enhanced understanding facilitated decision-making and process changes designed to improve velocity.

Among the joint actions taken were rewriting trip plans to speed up empty and loaded grain trains and implementing new shuttle rules that reduced the amount of “free time” for customers, which in turn provided them economic incentives for faster turns of equipment at origin and destination. BNSF shared in the rule changes by committing to pay penalties to PNW export facilities for each failure to original trip plan.

BNSF’s shuttle destination markets were also diversified to encourage shuttle flow to five major destination markets, which led to fleet speed and turns improvements.

Non-shuttle grain car performance also improved as these cars were incorporated into the “H” and “M” merchandise train schedules. What used to take about seven days – the time to accumulate and “match” enough carloads from non-unit shippers to move as a unit train – was reduced to about three days’ dwell time by the end of 2006, representing a reduction in dwell time at origin by 50 percent and an 11-percent transportation reduction.

The combined efforts, along with a refining of measurement tools and input from customers, resulted in Ag OTP performance improvements. OTP for unit trains was 87 percent for December last year compared with 63 percent for the same 2005 period; OTP in non-unit grain (moving in merchandise service) ended the year at 69.9 percent, up from 55.5 percent for the same 2005 period.

BNSF was able to handle record intermodal volumes last year as a result of several Intermodal velocity initiatives to reduce Trailer and Container Transit Days. These included increasing train length and units per train to reduce the amount of trains required to handle BNSF’s growing intermodal volumes. In 2006 BNSF was able to handle a 6-percent increase in intermodal units while reducing intermodal trains by 4 percent – which improved network fluidity in support of BNSF’s velocity goals.

On-dock operations in Southern California successfully simplified train blocking to reduce en route work events. This required loading

either solid-north or solid-south blocked trains with a minimum length requirement of 7,500 feet. In 2006, this effort contributed to on-dock volume growing 31 percent, and the daily average of eastbound-originated on-dock trains increasing by 27 percent over 2005.

Because on-dock terminals were able to support the majority of the growth demands in Southern California, the Hobart Yard in Los Angeles was able to remain fluid and to improve the velocity of units through the terminal from check-point to train departure.

Across the BNSF system, intermodal terminals made a significant contribution to improved velocity by reducing the throughput times at origin and destination. The TSP for several major intermodal terminals was redesigned in 2006 to reduce multi-block trains in an effort to simplify train operations and improve the velocity of units moving across the network.

There was also enhanced focus to optimize car utilization by improving the segregation of the railcar fleet for trailers and containers, utilizing 40- and 48-foot wells for international loadings and 53-foot wells for domestic container loadings. Additionally, BNSF discontinued loading containers flat on the deck of TOFC cars. Combined, the initiatives to use the right equipment to better utilize well space and to operate longer trains significantly contributed to train productivity.

Automotive also made an impact to the overall network fluidity as BNSF worked with car manufacturers to establish specific release days for certain destinations. This enabled automotive loads to come to BNSF in bigger blocks, resulting in fewer time-consuming work events.

Clearly, the focus on velocity helped make 2006 a banner year, especially considering the growth BNSF continued to experience. For 2007, that growth is expected to again present opportunities as well as challenges. “We must stay focused on our velocity initiatives if we want to continue to lead the industry,” says Ice.

Both the container transit days and trailer transit days velocity measures were achieved last year, allowing BNSF to handle a 6-percent increase in intermodal units.

2006VolumesManaged,ThankstoRallyingAroundMeasures

6 RAIlwAy I JANUARY/FEBRUARY 2007

2007 Safety Plan to Increase focus on Critical work PracticesBy Kristen Rabe

BnSf ended 2006 with an injury frequency ratio of 1.�1, which was higher than the 2005 ratio and reverses the improvement trend that BnSf has made over the years. the ratio measures the number of injuries reportable to the federal Railroad Administration per 200,000 work hours.

“We are deeply concerned about our safety performance in 2006,” says Mark Schulze, vice president, Safety, Training and Operations Support. “Although we believe our safety programs are set on a strong foundation to proactively identify and reduce risk, we clearly need to increase the focus on certain critical work practices in our 2007 safety program.”

BNSF did have some safety successes in 2006, including a 20-percent decrease in the injury severity ratio and a large number of injury-free work groups. However, as Carl Ice, executive vice president and chief operations officer, explained, “Although we had some successes in safety, if overall our frequency ratio has gone up, we can’t be successful in safety. And if we can’t be successful in safety, we can’t be successful at all. So we’ve got to turn that around in 2007.”

One of the most important safety improvement initiatives for 2007 is a revised template for the Safety Action Plans. Each division, shop, zone and major work team develops an annual Safety Action Plan as the foundation for its safety efforts. The simplified template for 2007 ensures a focus on six essential elements: Safety Leadership – Communicating

and working with labor leaders to ensure a positive and cooperative safety approach. Employee Review Process – Training,

coaching and encouraging employees to apply best practices to work injury-free. Site Safety Teams – Providing resources and

assistance to help site safety teams identify and reduce risk. Management Oversight Process – Ensuring

that a proactive process of risk identification and reduction is in place. Accident/Incident Review – Taking care of

employees who have been injured, and carefully reviewing all incidents and injuries to prevent similar incidents.

Safety Issue Resolution Database – Using a database tool to track reported risk and resolution.

“The key to a successful Safety Action Plan is simple yet challenging – consistently identify and eliminate at-risk work practices and environmental hazards,” Schulze says.

In addition to ensuring a clear focus for the Safety Action Plans, BNSF’s System Safety team analyzed recent injury trends and worked with safety leaders in Transportation, Engineering and Mechanical to target the most critical work behaviors. The team identified the following Safety Focus Topics for each quarter in 2007 [see the matrix on page 7].

The first quarter’s focus topic is “Fouling Track” for Engineering, Mechanical and Transportation. This topic was chosen because it is a behavior that can have extremely serious consequences. Employees

can put themselves at risk of severe, even fatal, injury while fouling track.

“During this first quarter, we will increase the frequency of briefings related to working foul of track,” Schulze says. “Our supervisors also have specific behavioral checklists to use when reviewing this work event. We will gauge our progress throughout the quarter, with the goal of identifying and eliminating at-risk behaviors related to fouling track.”

Posters and other materials on each quarterly Safety Focus Topic will be distributed to the field. BNSF will also use the News Network and other company and division publications to reinforce key safety messages.

In addition, a safety e-newsletter will be distributed twice a month as a central resource for safety news and information. This newsletter

RAIlwAy I JANUARY/FEBRUARY 2007 7

will include briefing topics, safety recognition and safety measurements.

Throughout 2007, employees will also hear more about the personal importance of safety. The theme for this year, “Safety for Us,” is meant to literally drive home the importance of safety.

“When we go home at the end of the day injury-free, not only do we benefit, but our family, friends, co-workers, and communities also benefit. I challenge every employee to reflect on all the lives you touch each day, and to think about how your personal safety at work and at home impacts the lives of those around you,” Schulze says.

“Through this focused attention, we will prevent injuries AND save lives. Everyone shares responsibility for maintaining a safe workplace. I ask you for your personal commitment as we work toward our goal of creating an injury-free and accident-free workplace,” Schulze explains.

Transportation: Maintaining awareness is essential when fouling track during switch-ing operations. Employees must ensure they stay focused and communicate with their crew when working ahead, preparing cars in other tracks by lacing up air, or turning angle cocks for upcoming switching moves. Severe injuries can result if employees rely on their sense of timing and their switch list instead of communicating with their crew that they are in between cars on an adjacent track.

Employees must always communicate with the engineer and other crew members about what track they will be working on and confirm with the engineer that no cars will be switched into that track. Employees must watch for and expect car movement in any direction at any time.

first Quarter Safety focus topic: fouling trackBeing “foul of track” is a critical work practice that can result in serious or even fatal

injury. even though BnSf doesn’t experience a high frequency of injuries due to this cause, when injuries do occur they are usually severe or life-ending. By focusing on “foul of track” throughout the first quarter of 2007, BnSf is working to raise awareness of this critical behavior and ensure compliance with all applicable safety rules.

employees are considered “foul of track” whenever they are in a location on or near the track where they could potentially be struck by moving equipment, including locomotives, railcars or track equipment.

TRANSPORTATION ENGINEERING MEChANICAL

1Q

2Q

3Q

4Q

Foul of Track

Slip, Trip, Fall Slip, Trip, Fall Slip, Trip, Fall

Securement ofEquipment Hand/Power Tools Hand/Power Tools

Handling CarsAhead of Engines

Material/Equipment Handling

Material/Equipment Handling

Foul of Track Foul of Track

Engineering: Whenever possible, Engineer-ing employees must perform their work from the field side rather than the track side whenever they are working on a track adjacent to a track subject to on-track equip-ment movements. When using a lookout for protection, the lookout must never become involved in the work being performed.

Mechanical: Mechanical employees must ensure that they always follow applicable rules for blue flag protection. When working around live track and out of the jurisdiction of blue flag protection, they must continu-ally watch for car movement in any direc-tion at any time. When using vehicles for maintenance and inspection, always ensure sufficient clearance from the track.

When standing, walking or work-ing while foul of track, employees place themselves at potential risk. employees must avoid fouling track unnecessarily, and whenever they are foul of track they must be alert for movement on any track at any time.

� RAIlwAy I JANUARY/FEBRUARY 2007� RAIlwAy I JANUARY/FEBRUARY 2007

the premise for Fuel by Rail is to offer those transporting fuel products an alternative to their current supply stream, primarily trucks and pipeline. The results have been positive, as Fuel by Rail has been “pumping” up BNSF’s fuel distribution business with a 27-percent volume improvement in 2006 over 2005.

Here’s how the program works: The value of Fuel by Rail increases as demand outpaces supply between key sourcing and consumption points. The supply/demand gaps in the marketplace can be influenced by numerous market drivers. For example, a destination market may be constrained as a result of limited pipeline access or capacity.

“The petroleum industry has learned that BNSF can aid them in getting the right product to the right market at the right time,” says Todd Strever, director of Industrial Products. “We have the network and the capability to bridge the distance between source and consumption, resulting in value for our customers.”

Key Market driversIt’s no mistake that the Fuel by Rail program

was created specifically for this point in time. In 2006 the Environmental Protection Agency (EPA) required that diesel fuel be produced,

distributed and sold at much lower sulfur levels (15 parts per million). This new fuel specification, ultra-low sulfur diesel (ULSD), requires major changes in how diesel is produced and distributed throughout North America. For instance, a major concern is keeping ULSD “on spec” as it is transported through the pipeline and interfaces with other fuel types that share the same pipe. The result has been that certain fuel products have come out of the pipeline delivery system and are seeking alternative modes such as rail. As volatility and complexity are added to the petroleum industry, the need for new transportation solutions, like Fuel by Rail, is more evident, says Strever.

laying the GroundworkOf course, the Fuel by Rail network didn’t

happen overnight. It necessitated working with numerous customers to create the required infrastructure to load and unload fuel products. The expansion of such facilities began in 2003 and has steadily increased to date.

Today, BNSF has access to a significant number of loading and unloading locations across the system, providing shippers flexibility in shipping to/from various markets. Additional expansion will occur in 2007 as Fuel by Rail continues to seek both increased capacity and increased loading/unloading locations.

There are many factors BNSF considers before serving any market. For example, the overall size of the market, the potential gap in supply and demand, seasonality, the types of fuel in demand, environmental issues, and whether or not the location strategically complements BNSF’s operations as a whole.

Based on these considerations, each destination market can look very different and therefore require a customized approach to establishing how the rail fuel facility needs to look. For example, some markets might

not demand huge volumes of rail and simply require a rail spur where a rail-to-truck transfer can take place. Other destination markets may require unit-train infrastructure, fixed assets and on-site storage tanks. “Customers provide their own tank cars, and we work closely with those interested in developing facilities to ensure they fit the needs of the market and the railroad,” says BNSF’s Wes Mailhos, manager, Business Development, who assists Industrial Products on site needs.

Positive future outlookThrough the identification of key market

drivers that opened the door for Fuel by Rail, BNSF is positioned well for the future. Establishing a strategic network has taken careful consideration and time; however, the value that it provides has been recognized by the petroleum industry and validated by the increase in rail volume.

“Moving forward, I do expect that BNSF will continue to see growth,” says Mailhos. “In fact, the approach used for Fuel by Rail has led us to new avenues of growth that we might have not otherwise considered.”

‘Fuel by Rail’ Pumping Up BNSF’s BusinessBy amy Ray

one of the hot commodities fueling BnSf’s recent growth is literally that: fuel. By leveraging BnSf’s expansive rail system, the industrial products Business group has been able to establish a fuel distribution network known as “fuel by Rail.”

Above and far left, new EPA requirements have led to changes in how diesel is produced and distributed, which has led to new transportation solutions such as Fuel by Rail.

RAIlwAy I JANUARY/FEBRUARY 2007 �

By marietta CollinsHow do you access important department

information that you frequently use for your job at BNSF? Do you have a list of links to specific reports and applications? Do you have your contacts on a piece of paper, or do you just use People Search? When you need to access your work group’s safety procedures, where do you find that information?

The My Job tab on employee.bnsf.com has a lot of good information that can help you make the most of your days (or nights, depending on your work schedule). On it, there are important reports, tools and applications you use for your specific job, plus other information like department news and contacts. This way you don’t have to go from Web page to Web page to find what you need. Most of the material you use daily is already right there.

Most BNSF departments have already created their My Job tab, and others are in the works. And it’s been made just for you – depending on your department, your job and other particulars about your role.

three tabs, one Useful Site

Employee.bnsf.com is a great tool for accessing important company, department and employee information. The site was built specifically for employees, featuring many of the day-to-day tools you use for your job, department and life events.

You can access employee.bnsf.com either from your home computer or a network computer. Just use your mainframe or windows ID and password – either one will work. (You do not need to log on to the Mainframe to access employee.bnsf.com – simply use your user ID and password when prompted.)

After logging onto employee.bnsf.com and clicking on the Accept link, you will see three tabs. Each tab provides different types of information. My BNSF has the latest company and industry news, employee communications, Labor Relations, BNSF stock, Home Mail, People Search, recent retirees, recognition programs, a list of departments, safety alerts and briefings, community programs, the BNSF Store and more.

For instance, you can learn about other employees and their contributions to the company and their community by selecting BNSF All Stars under BNSF Communications, Employee Communications.

Be sure to check out the Employee Tools channel (upper left column) so you can quickly access a host of frequently used applications. Plus, every page has a direct link to Employee Online and other important sites such as Policies, Software Download, TSOC Help Desk and Careers. And if you can’t find what you are looking for, use the Search field right at the top under the three tabs.

My Job is the second tab, and My Self is the third. This tab features information related to you as an employee, such as healthcare and benefits, wellness programs, training, retirement, tuition refund program, life events, vacation and holiday policies, and much more.

Just the way you like ItHave you ever wanted to change the layout

of a Web page to make it easier for you to use? Well, just like popular Web sites such as Yahoo!, MSN Hotmail or America Online, you can do just that with employee.bnsf.com.

Look in the upper right corner of all of these tabs and you’ll see two links: Content and Layout. You can use these tools to customize your tab pages.

For example, if there are some channels you hardly ever use, you can hide that information. You also can add information and other links found in BNSF’s intranet.

When you click on Content, you get a list of all the goodies that can be acquired for that

page. Mark the boxes of the items you want viewable, and clear the boxes for the items you don’t want to see. For instance, you might want Labor Relations available on your My BNSF tab, but not the weather. After selecting the items you want to see, just click on the Finish button.

The next thing you may want to do is click on Layout. You can move around the content – or channels – from left to right and vice versa. Or you can change the order of what you see from the top of the page, down. Once you have things set the way you want, hit the Finish button.

Once you have all the tabs with the content and layout set the way you want, you can personalize the tabs even further. On the My BNSF and My Self tabs, you can add your favorite links under the Bookmarks channel. Click on the pencil box in the upper right corner of the Bookmarks channel. Type in the name you want to use for your bookmark, and type or copy in your url address. Now select the action you want to happen when you click on the bookmark, and hit the Finish button. Repeat these steps until you have all of your bookmarks set. Now, wherever you go, you can log into employee.bnsf.com, and you will have all of your bookmarks available.

The best way to learn more about employee.bnsf.com is to see it for yourself, so log on today! On the My BNSF tab, there’s a Welcome channel at the top that describes the important features and includes a short video that highlights the site’s functions and benefits – just click on Learn More. And on the right side, check out the Portal User Tips and How Do I? channels.

Remember, the site is accessible from any computer with a browser, 24 hours a day. After typing in employee.bnsf.com, you can log on by using your mainframe or windows ID and password when prompted. If you do not currently have a BNSF computer user account, your supervisor should submit User Registration Request Form, ISS28294, to set up an account. If you’re logging in from a network computer, you won’t have to sign on again.

‘My Job’ helps you Get your Job done

You can add your favorite Bookmarks so they are easily accessible at all times.

Employee Tools offers quick links to FastTrack, Safety and Rules, Employee Online and Train Tracking, to name a few.

You can change some elements of the page design by selecting Layout and moving the content around.

To add more information, click on Content and you’ll see a list of items available to you.

10 RAIlwAy I JANUARY/FEBRUARY 2007

In January, the Federal Railroad Administration (FRA) and BNSF announced FRA’s approval of BNSF’s Product Safety Plan (PSP) to allow BNSF to begin implementing the Electronic Train Management System (ETMS) on portions of its network.

ETMS works as a safety overlay, through a train control program that passes critical train movement information, such as movement authorities, speed restrictions and switch position, to a digital communications network that displays the information on a computer screen inside the locomotive cab. The onboard computer, with location information provided via the Global Positioning System (GPS), will warn and then automatically initiate braking action if the crew fails to respond appropriately to the warnings. ETMS operates with existing train control signal systems and operating rules as the primary means of maintaining train separation.

In commenting on the PSP approval, FRA Administrator Joseph Boardman said, “This is a major achievement that marks the beginning of a new era of rail safety.”

“This is a significant safety milestone for the rail industry,” said Matt Rose, BNSF chairman, president and chief executive officer. “ETMS is the first approved automatic control system that prevents train collisions and over-speed accidents, meeting the criteria of one of the National Transportation Safety Board’s most-wanted list.

fRA Approves BnSf’s Product Safety Plan to Implement etMS

“The ETMS pilot project that we have operated on our Beardstown subdivision in Illinois since October 2004, in full cooperation with FRA, was instrumental in proving the value and safety of this technology,” added Rose.

In 2003, FRA granted a waiver allowing BNSF and Wabtec Corporation to move forward with a pilot project to operate ETMS-equipped test trains between Beardstown and Centralia, Ill. Wabtec installed and tested ETMS on 50 BNSF locomotives that operated along the 135-mile corridor. Since October 2004, more than 2,000 revenue service train trips have been operated with these ETMS-equipped locomotives. During this pilot testing, ETMS passed every test.

Last May, BNSF received permission from FRA to test ETMS on a 300-mile corridor between Arkansas City, Kan., and Fort Worth. In addition to BNSF trains, Union Pacific Railroad freight and Amtrak passenger trains operate over parts of that route. Implementation is scheduled to begin in the second quarter of 2007.

FRA’s approval of BNSF’s PSP came with some conditions, primarily related to record keeping, operations testing and reporting. Once these conditions are met, BNSF will be in position to begin implementation of ETMS to other areas of its network.

The Product Safety Plan for ETMS, which features an onboard computer that provides location infor-mation that will warn and then automatically initiate train-braking action, was recently approved by the Federal Railroad Administration.

winter Blasts BnSf

InearlyJanuary,winterhitBNSFwithavengeance,dumpingsnowandiceacrosstheMidwestandlowerhalfofthesystem,andheavyrainscausedmudslidesintheNorthwest.Thenthestormskeptcoming,oneafteranother.

IntheSoutheast,trainsdestinedtoororiginatingfromthisregionwerestageduntiltheextremeweathersubsided.TheLosAngelesandSanBernardino,Calif.,hubswereaskedtonotloadtrafficdestinedtotheregionforashortperiodoftime.

Coloradowasalsoblasted,andtheDenverterminal’strafficflowwasnegativelyimpactedasice,snowandcoldtemperaturesslowedtrainmovementsandswitchingoperations.

Somecoaltrainswereparkedforsafetyreasons,andotherswerereroutedduringtheworstoftheblizzards.Thestormsnotonlyaffectedtrainmovements,bututilities’abilitytounloadtrainsaswell.

Winteroperatingplanswereputintomotionassnowblowerswereusedtofightdriftsandheatersemployedtounclogswitches.BNSFpeople,manyofwhomhadahardtimeevengettingtowork,didanoutstandingjobkeepingtrainsrollingandreroutingtraffictominimizedelays.

In Colorado, snow is common, but the drifts this winter really tested BNSF operations.

In the Pacific Northwest, heavy rains lead to mudslides and slipouts such as this in Skykomish, Wash.

RAIlwAy I JANUARY/FEBRUARY 2007 11

100

95

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85

80

75

70

65

60

55

50JUN 06 OCT 06 NOV 06MAY 06APR 06 AUG 06 SEP 06JAN 06 FEB 06 MAR 06 JUL 06 DEC 06 JAN 07

BnSf Units handledYear-to-Date through Feb. 3, 2007, and Feb. 2, 2006. 2007 2006

2007 BnSf Velocity PerformanceQuarter-to-date through Feb. 8, 2007 1st Qtr. Goal Actual QTD

Locomotive miles per day 296.3 288.1

Agricultural car miles per day 175.6 173.9

Merchandise car miles per day 118.0 119.7

Coal cycle index 134.5 142.9

Intermodal stack transit days 4.92 4.65

Intermodal trailer transit days 2.34 2.28

Coal 231,409 229,679Agricultural Products 96,566 94,675Industrial 148,574 151,041Consumer 483,610 506,086System 960,159 981,481

BnSf Performance Measures

BnSf Stock12-month through Feb. 8, 2007 S&P 500 Index BNSF

BnSf Reportable InjuriesYear-to-date through Feb. 8, 2007

79

Locomotive Velocity = Total locomotive miles on 3,000+ HP/ Total locomotive count (average miles per day per locomotive)

Agricultural and Merchandise Car Velocity = Car miles / active cycle days

Coal cycle index percentage = Actual total cycle time / Plan cycle time (starts with the time the cars are placed for loading, followed by transportation time to the utility, unloading and transportation of the empty cars back to mine); excludes foreign road delay and utility outage delay

Intermodal Service average transit days = Average time between cutoff and deramp or interchange delivery (transit time starts at cutoff or first train departure if cutoff is after first train departure)

2007

2006 37

Processing trains through a yard is a little like designing a new fly for trout fishing. It involves precision, patience, tools and knowledge. Once properly designed, it can be gracefully cast, seamlessly “landing” at its final destination. Lincoln officials were the first to test the YDS waters, so to speak.

“Lincoln had an old database that we used as a shareware program to be able to manage our train traffic before,” says Mark Athey, terminal superintendent, Lincoln. “It was an archaic system. It crashed often, so we were looking for a better system that was connected to TSS [Transportation Support System].”

What Lincoln, with the support of Technology Services (TS), came up with is YDS to collect and share information.

“I think YDS is a very good example of what can happen when TS works directly with our field locations,” says Janet Galassi, director, Transportation Support System. “They helped us to understand what it is that they needed.”

With YDS, employees don’t have to dart between five or

six computer screens to find information or use Excel or Word. And because much of a terminal’s daily plan spreadsheet is covered by YDS, front-line supervisors don’t have to enter information into multiple spreadsheets.

YDS also improves communication between departments because the terminal plan will be readily accessible to everyone at BNSF. Anyone who needs information about a terminal can simply look in TSS to see a terminal’s current plan. YDS also provides data that can be analyzed to improve terminal throughput.

“Each department puts information into YDS of the status of the train they’re working on at that particular time,” says Athey. “And then everybody is able to look at each individual train or look at all of the trains in our yard and see the current status of those trains to be able to manage our operation better.”

Apparently, good news travels fast. Out in Belen, leaders heard of the more efficient YDS system and requested that it be implemented on their territory.

“The prospect of this new program was very appealing to us

YDS: Consolidating Reports, Saving TimeBy Denise ovalle

Employees in the yards at Belen, N.M., and Lincoln, Neb., may not know each other, but they are sharing the benefits of a technological advancement. Both locations, as well as others across the system, are using the YarD Status System (YDS) and are enjoying im-proved efficiency, which translate into a little less stress for those employees.

winter Blasts BnSf

because we were going to be able to consolidate all of these reports and eliminate a lot of reports with YDS,” says Bob Gomez, terminal superintendent, Belen.

“The positive results from seeing the system in place, especially for our lead people, was immediate because there was nothing more that they wanted than to get rid of all of the spreadsheets that we had,” says Joe Casey Pena, field superintendent, Belen.

Says Galassi: “YDS was an evolution. It started out to be very much like what Lincoln needed, but it evolved after we went to different types of terminals to include much, much more functionality.”

At Belen, the positive results were quickly realized.

“We were struggling to get 70 trains a day through Belen. And when that number jumped up to 75, close to 80 trains, it was a struggle to get them through here. After YDS was implemented, we started to see that number go up and the problems that were associated with processing trains through the terminal actually decrease,” says Gomez.

One of the best things about YDS is its simplicity to the user. A person needs only basic computer knowledge. “Once you learn it, it’s a very easy tool to teach, to learn, to be able to manipulate the information,” says Athey.

Progress continues as this year TS is taking YDS to the next level. A group of representatives from each region, from both the field and the Network Operations Center, are working closely with TS to design TSS Xpress, which will standardize, simplify and streamline TSS to shorten the time to become proficient in BNSF’s transportation tool kit.

At Belen, N.M., YDS is having a posi-tive impact on train processing.

For more information, contact your TSS Xpress representative:

North: Dale Trepanier and Jeff LedererCentral: Brandon ArchambeauSouth: Phillip Hoskins, Missy Flanery, Scott Meyer, Bob Kremer and Tom Albanese

PRSRT STDU.S. POSTAGE

P A I DFORT WORTH, TXPERMIT NO. 2528

Burlington Northern Santa Fe CorporationP.O. Box 961057Fort Worth, Texas 76161-0057

PRSRT STDU.S. POSTAGE

P A I DFORT WORTH, TXPERMIT NO. 2528

T h e e m p l o y e e m a g a z i n e o f T e a m B n S f J a n U a R y / f e B R U a R y 2 0 0 7

To access employee.bnsf.com, just use your mainframe or Windows user ID and password (either one will work). You do not need to log on to the mainframe to access – simply use your user ID and password when prompted. If you do not currently have a BNSF computer user account, your supervisor should submit User Registration Request Form, ISS28294, to set up an account.

Employee DiscountsTake advantage of the buying power of Team BnSf! as a BnSf employee, you can receive big discounts on merchandise and services from our partner companies. Stay up-to-date on all your discounts on the employee Discounts page on employee.bnsf.com. employee Discounts will be listed in the inside BnSf channel, from the My BNSF page.

Cellular Services• Cellular Accessories for Less • Cingular Wireless• Nextel • Sprint • Verizon

entertainment• TicketsAtWork.com

Computers• CDW (Home & Office Accessories) • Dell Computers• Gateway • Microsoft Home Use Program • Microsoft Employee Discount Program• Toshiba

Vehicles• Audi • DaimlerChrysler • Ford• GM • Hyundai • Mitsubishi• Nissan • Subaru • Volkswagen

home & office• 1-800-Flowers.com • Battery Zone • Bank of America Mortgage Program • Bank of America Work Program• OfficeMax• Equity Residential Properties• General Electric • Mobility Home Loans • Wells Fargo Mortgage Program