Category Archives: BNSF

BNSF Puts Battery-Electric Locomotives Into Service

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BNSF Railway and Wabtec’s development of potential of battery-electric locomotives has reached another significant milestone this week as they begin testing the technology in revenue service between Barstow and Stockton, California.

As BNSF seeks ways to further reduce its environmental impact, the advancement of battery technology offers some possible solutions.

“We’ve got everything in place and we’re ready to see how this next-generation locomotive performs in revenue service,” said John Lovenburg, BNSF vice president, Environmental. “BNSF is focused on continuing to reduce our environmental impact, and we’re committed to doing our part to test and assess the commercial viability of emerging technologies that reduce emissions.”

The pilot test will run from January until the end of March. If the initial pilot proves successful, BNSF will look to expand testing to other locations and operating conditions on its system.

The battery-powered locomotive will be situated in a consist between two Tier 4 locomotives, creating a battery-electric hybrid consist. When running on the mainline, both the battery-electric and diesel locomotives will power the train. The battery-electric locomotive is expected to reduce the environmental impact from emissions along the route in an efficient manner, while improving the fuel economy for the entire consist by at least 10 percent.

This initiative builds on BNSF’s existing investments in sustainable technologies including idle control, electric wide-span cranes, battery-electric hostlers, automated gates at its intermodal facilities, and Tier 4 locomotives. BNSF partnered with Wabtec on the development of the battery-electric locomotive, which features an overall energy-management system, including onboard energy storage that, when coupled with advanced system-optimization controls, will improve consist and train performance.

“The FLXdrive is the world’s first 100-percent, heavy-haul battery-electric locomotive that optimizes the total energy utilization of the entire locomotive consist,” said Alan Hamilton, Wabtec vice president, Engineering. “This technology works in a manner very similar to how electric vehicles use regenerative braking. It’s a significant step forward for the rail industry and will change the course for even cleaner, more energy-efficient transport.”

The battery-electric locomotive pilot program is part of a $22.6 million grant awarded to BNSF and the San Joaquin Valley Air Pollution Control District from the Zero- and Near Zero-Emission Freight Facilities (ZANZEFF) project by the California Air Resource Board to pilot several emissions-reducing technologies in and around railyards. The ZANZEFF project is part of California Climate Investments, a statewide initiative that puts billions of Cap-and-Trade dollars to work reducing greenhouse gas emissions, strengthening the economy and improving public health and the environment — particularly in disadvantaged communities.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Awards Three Newly-Designated Certified Sites

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BNSF Railway has awarded three new locations its Certified Sites designation. All three new sites will bring their respective state’s total count to two in Kansas, Missouri and Texas.

In order to be considered for the designation, sites must undergo a thorough analysis which includes an evaluation of environmental and geotechnical standards, available utilities, site availability and existing and projected infrastructure. All Certified Sites offer the convenience of direct rail service.

The newly-designated Certified Sites feature hundreds of acres ready for industrial development:

• New Century AirCenter Business Park, New Century, Kansas – Adjacent to Interstate 35 and with quick access to many of the other Kansas City region interstates, New Century AirCenter Business Park consists of 667 available acres located in unincorporated Johnson County, Kansas.
• Wildwood Ranch, Joplin, Missouri – Conveniently located southeast of U.S. Highway 66, Wildwood Ranch comprises 503 acres divided into two main areas that extend into both Jasper and Newton counties.
• Gateway Industrial Park, Gainesville, Texas – Located in northwest Gainesville and near Interstate 35, Gateway Industrial Park has 126 acres ready for rapid development of rail-served industrial sites.

Certified Sites are a part of BNSF’s Premier Parks, Sites and Transload program. The program is a strategic approach that addresses the increasing demand for customer site locations by developing various types of facilities across BNSF’s network. Businesses looking to locate at any of these properties could save six to nine months of construction time as a result of this analysis. BNSF Certified Sites are reviewed by an industry expert in order to ensure accurate, reliable data.

The goal of the program is to provide an inventory of rail-served sites that are available for immediate development.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Intermodal Business Up Dramatically

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BNSF Railway has been having a tough year, with overall carloads and intermodal down 8.38 percent from 2019 levels, but there is some very good news. Intermodal shipments, which is one of BNSF strengths, are up a whopping 12.3 percent in the fourth quarter as compared to 2019.

Rail intermodal, which moves shipping containers and truck trailers by rail, has been reaching record levels, and BNSF is the largest intermodal railroad, transporting over a million more intermodal loads annually than its competitors.

Back in July, BNSF noted that the rise in intermodal volume was primarily driven by e-commerce business.

A single train can take upwards of 400 tractor trailers off of highways, saving energy and reducing traffic congestion.

This video shows the scale of BNSF’s intermodal trains.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Appoints New CEO

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BNSF has announced that Executive Vice President Operations, Kathryn M. Farmer, will become President and Chief Executive Officer on Jan. 1, 2021. As CEO, she will assume leadership of BNSF’s Board of Directors.

Carl R. Ice, current President and Chief Executive Officer, will retire at the end of 2020 and remain on BNSF’s Board of Directors as well.

Farmer has been with BNSF for 28 years, most recently serving as Executive Vice President, Operations since September 2018. In 1992, Farmer joined Burlington Northern as a management trainee and has held leadership positions in every major function of the company including operations, marketing and finance. Prior to her operations role, Farmer led BNSF’s largest business unit as Group Vice President, Consumer Products.

Ice has been with BNSF for 42 years. In 1995, he led a team that orchestrated the merger and subsequent integration of Burlington Northern Railroad and Santa Fe Railway. Since then, he has helped lead the company and culture into what has become the largest Class I railroad in North America. Ice has been integral to the development of the company’s operating and marketing plans.

“I want to thank all of the men and women of BNSF. I am proud of having worked with you and all of the things that we have accomplished together. One of the most important roles of a CEO is to ensure a strong succession plan is in place,” said Ice. “Katie and I have been working toward this plan for a long time. Katie has held many different roles at BNSF with an ever-increasing impact with each new role as she has built trust and confidence throughout BNSF. I am pleased for Katie and the organization knowing BNSF’s future is in good hands. Katie is a shining example of BNSF’s leadership model and BNSF will continue to build upon its legacy.”

As a long-time member of BNSF’s leadership team, Farmer said, “I am humbled and honored to be asked to lead this incredible company and its dedicated employees—men and women that I have worked alongside for almost 30 years. We are well-positioned in our approach to safety and meeting our customers’ expectations while having the necessary capacity to grow with our customers. BNSF has long been a cost leader and we will ensure that continues into the future. I look forward to continuing BNSF’s success.”

“Carl has had a huge impact on this company and this industry having served on BNSF’s leadership team for the entire 25 years of the company’s existence. I have great respect for him and he leaves BNSF well-prepared for the next 25 years,” said Greg Abel, Vice Chairman, Non-Insurance Operations, Berkshire Hathaway. “Katie has had a long career with multiple roles at BNSF which fits well with our efforts to develop our people. Katie’s proven leadership and passion and commitment make her perfect for the role. We’re thrilled that Katie is taking over the role and have the utmost confidence in both her and BNSF’s future success.”

Berkshire Hathaway Chairman and CEO Warren Buffett said, “BNSF is an iconic company and this is a historic day. Carl has been critical to BNSF’s success for a very long time. I thank him for his leadership and his accomplishments. We look forward to Katie’s leadership and more success. She possesses all of the qualities that make us excited about the future.”

© 2020 David Mazor


Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathawa, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Special Report: BNSF and Wabtec Testing Lithium-Ion Locomotive

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Wabtec and BNSF Railway Company are testing a lithium-ion battery-powered locomotive, which will be paired with diesel locomotives in a “consist” (railroad jargon for a sequence of connected locomotives) to eventually power a freight train along a stretch of rail in California’s Central Valley between Stockton and Barstow.

Wabtec has begun testing a prototype 4,400 lithium-ion battery-powered locomotive at its Erie, Pennsylvania, plant.

If successful, the fuel savings could have a big impact on BNSF and other railroads. And the environmental benefits could also help BNSF advance one of its major capacity-building projects. Adding even one battery-powered locomotive to the train could reduce the consist’s total fuel consumption by up to 15 percent.

BNSF and Wabtec (formerly GE Transportation) began the pilot program in 2018.

Currently, Wabtec builds new diesel locomotives up to 5,400 horsepower. In addition to locomotives, Wabtec also produces freight cars, passenger transit vehicles and power generation equipment, for both original equipment and aftermarket applications.

BNSF previously looked at liquefied natural gas as a possible alternative to diesel fuel, but ended the project, and has since moved on to battery power.

The leap to battery power is not as big of one as it may at first seem. Diesel-electric locomotives like the machines Wabtec builds are already essentially power plants on wheels. They use a powerful diesel engine to generate the electricity that drives the electric motors that spin the wheels.

Wabtec believes that a battery-powered locomotive is the perfect complement to its diesel-electric brethren. The battery will hold 2,400 kilowatt-hours of energy, meaning it’s able to maintain full horsepower for roughly 30 minutes on a given charge. Then the operator can decide how to use that power.

For example, the operator could slash emissions from the diesel-powered locomotives by drawing heavily on the battery to start up the train. This would be especially desirable if the train were pulling out of a city rail yard, close to populated areas.

Using the battery power also cuts down on noise. The train operator may also choose to “graze” on battery power — or even recharge the battery — when the train is cruising through open landscape, saving hundreds of gallons of diesel.

Each battery locomotive also has a brain, in the form of an onboard supervisory control system. The rail operator can input data about the train’s journey into the system — such as how much weight it’s hauling, the types of locomotives in the consist, and its route — to allow the computer to make decisions about the best way to use the battery before the train even pulls away.

Imagine a battery-enhanced train making a 500-mile trip across sparsely populated terrain — meaning fuel economy is the name of the game. Software will calculate the optimum ratio of battery power to diesel usage for such a journey and decide on the most favorable balance for the hybrid locomotive consist. The software can then pinpoint the exact moments to draw on the battery, thus sparing diesel.

The new locomotive will use a battery cell similar to what you might find under the hood of an electric car. It is a lithium-ion energy storage unit with cells that contain a combination of nickel, manganese and cobalt only far larger.

A standard electric-car battery usually holds a few hundred storage cells — each around the size of a mini tablet computer. But the prototype of the new locomotive will have a battery with approximately 20,000 cells, and future versions may have as many as 50,000 cells. The cells also must be able to weather the heavy-going environment of a locomotive, with all its jolts and shocks.

To build the demonstration model, workers stripped out the engine and cooling systems from a diesel locomotive to make way for the battery under the hood. But from the outside, the battery-powered locomotive doesn’t look much different from its diesel counterparts.

The impact on BNSF could be huge, not only in fuel cost-savings, but if it could use battery-powered locomotives in urban areas, such as the Port of Long Beach, it might be able to overcome the opposition to its long-stalled Southern California International Gateway plan, which has been held up due to environmental concerns tied to diesel emissions.

“We’re developing and testing the ‘next-generation’ locomotive now to build our advantage over long-haul trucks, remain competitive and reduce our operating costs,” BNSF’s Vice-President, Environmental, John Lovenburg, says.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Adds Direct Intermodal Service Between the Pacific Northwest and The Ohio Valley Region

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With the growth of its direct-rail intermodal service connecting California with the Ohio Valley region, BNSF Railway has launched a new service option between the Pacific Northwest and Northwest Ohio. This new container-only service will initially be offered five days a week for both eastbound and westbound freight originating and terminating at our South Seattle Intermodal Facility.

Customers who originate shipments at BNSF’s South Seattle Intermodal Facility can now access some of the fastest growing industrial and consumer markets in and around northwest Ohio including Toledo, Columbus, Cleveland, Cincinnati, Detroit, Louisville and Pittsburgh.

The new service offering supports greater supply chain efficiency and is made possible as a result of BNSF’s continued focus on providing access to key markets and enhanced service capabilities for our customers.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment adv

BNSF Plans Layoffs

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With declining coal volumes, BNSF Railway has begun layoffs and facilities closures.

Through May 2, year-to-date coal volumes are down 16.4 percent, as compared to 2019. Total carloads including intermodal are down 9.90 percent.

The Class 1 railroad announced that 344 positions were being eliminated. The positions were in the company’s mechanical facilities. Some employees will have the option of accepting positions in other locations and will receive relocation packages and the ability to exercise seniority as per bargaining agreements.

Two BNSF facilities in Wyoming will close permanently this summer with Donkey Creek set to close on June 5 and Guernsey closing July 7.

The company is also closing facilities in Kansas, Montana, Nebraska, and North Dakota.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a stock.

Ninth Circuit Court Sides With Tribe in Dispute With BNSF

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A federal judge’s ruling Wednesday in favor of the Swinomish Indian Tribal Community gave the tribe another victory against BNSF Railway in their ongoing dispute over oil trains crossing tribal land.

The United States Court of Appeals for the Ninth Circuit agreed with a lower court that a federal law didn’t prevent the Swinomish Indian Tribal Community from trying to enforce its rights under its Right-of-Way easement agreement. The decision is a major win for the tribe as it enables it to pursue injunctive relief to enforce its easement agreement.

The Swinomish Indian Tribal Community initially filed their lawsuit in March 2015, suing the railroad for violating the terms of a Right-of-Way easement granted to allow the railroad to cross the reservation.

The Easement Agreement enables BNSF to bring Bakken crude oil to the Tesoro refinery by crossing a portion of the Swinomish Indian Reservation located on Fidalgo Island in Skagit County, Washington.

Under the terms of the 1991 Easement Agreement, BNSF can run one 25-car train per day in each direction. The tribe sued contending that BNSF was running as many as six 100-car “unit trains” per week.

The History of the Dispute

Train travel across the tribe’s land has a long contentious history, with the original track having been laid in the late 1800s without consent from the Swinomish or the U.S government. The tracks cross the northern edge of the reservation, and the Swinomish, as the present day political successor-in-interest to certain of the tribes and bands that signed the 1855 Treaty of Point Elliott, first sued the railroad in 1976, alleging a century of trespassing on tribal land. The resulting settlement led to the 1991 Easement Agreement that allowed only the 25-car train limit without the Tribe’s permission.

The Tribe contend in its lawsuit that “BNSF never notified the Tribe that it intended to exceed the limitation of one train of 25 cars or less, nor did it request permission from the Tribe before it began to do so.”

A Deal is a Deal

“A deal is a deal,” said Swinomish Chairman Brian Cladoosby. “Our signatures were on the agreement with BNSF, so were theirs, and so was the United States. But despite all that, BNSF began running its Bakken oil trains across the Reservation without asking, and without even telling us. This was exactly what they did for decades starting in the 1800s.”

“We told BNSF to stop, again and again,” said Cladoosby. “We also told BNSF: convince us why we should allow these oil trains to cross the Reservation. And we listened for two years, even while the trains kept rolling. But experiences across the country have now shown us all the dangers of Bakken Crude. It’s unacceptable for BNSF to put our people and our way of life at risk without regard to the agreement we established in good faith.”

Under the terms of the Easement Agreement, the Tribe agreed not to “arbitrarily withhold permission” for BNSF’s request to increase the number of trains or cars.

Is it Arbitrary?

The Tribe contends that its refusal to grant permission is not arbitrary and is “Based on the demonstrated hazards of shipping Bakken Crude by rail, paired with the proximity of the Right-of-Way to the Tribe’s critical economic and environmental resources and facilities — and the substantial numbers of people who use those resources and facilities on a daily basis — the Tribe is justifiably and gravely concerned with BNSF’s shipment of Bakken Crude across the Right-of-Way in a manner and in quantities at odds with the explicit terms of the Easement Agreement.”

The Swinomish are concerned that trains carrying Bakken crude oil run over bridges spanning the Tribe’s fishing grounds in the Swinomish Channel and Padilla Bay. They also noted that the track runs across the “heart of the Tribe’s economic development enterprises,” which includes the Tribe’s Swinomish Casino and Lodge, a Chevron station and convenience store, and an RV Park, as well as a Tribal waste treatment plant.

The Tribe noted that these enterprises are the “primary financial source for funding of the Tribe’s essential governmental functions and programs.”
The 1991 Easement Agreement granted the Right-of-Way for an initial 40-year term, along with two 20-year option periods. The current agreement will expire no later than 2071.

The tribe is seeking a “permanent injunction prohibiting BNSF from (1) running more than one train of twenty-five cars or less in each direction over the Right-of-Way per day and (2) shipping Bakken Crude across the Reservation.”

The Swinomish are also seeking monetary damages for the prior trespasses and breach of contract in an amount to be determined at trial.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Railway Releases 2019 Economic Development Results

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BNSF Railway Company (BNSF) has reported investments from customers served by the freight rail provider in 2019 totaled approximately $1.2 billion.

Large investments from customers including Ag Processing Inc., SeaCa Packaging and Hostess Brands, LLC contributed to the sum.

As a result of customer investments, BNSF projects the creation of more than 2,000 new jobs in local communities. This marks the ninth consecutive year that BNSF customers and local economic development organizations have invested more than $1 billion in a calendar year for new or expanded facilities.

“BNSF strives to offer unique supply chain solutions that fit our customers’ logistical needs and help maximize their investments,” said Colby Tanner, assistant vice president, economic development. “The flexibility of our rail development program allows our customers to reach new growing markets while saving time and money.”

In 2019, new developments supported a wide variety of commodities including consumer, agricultural and industrial products in more than 100 communities across the BNSF network. Highlights of supply chain solutions BNSF helped its customers achieve in 2019 include:

• Ag Processing Inc. – A $300 million investment led to the opening of its 10th soybean processing location in Aberdeen, S.D. Ag Processing Inc.’s newest facility is expected to process more than 50 million bushels of soybeans annually and create 60 new jobs.

• Hostess Brands, LLC – Located in Edgerton, Kan., the new distribution center supports 200 new jobs. The $35 million investment strengthens the company’s distribution strategy with a direct connection to the nation’s supply chain through Logistics Park Kansas City.

• SeaCa Packaging – A subsidiary of Seattle-Tacoma Box Company, the plastics manufacturer invested $18 million in opening its first plant location in Surprise, Ariz., creating boxes for agriculture products and gaining access to demand in the Southwest region.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Announces Its Newest Logistics Center

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BNSF Railway Company (BNSF) has announced its newest logistics center, Logistics Center North Houston at Cleveland. Once completed, the rail-served development is designed to help businesses increase their reach and speed to the densely-populated Houston market and surrounding area. As with other BNSF Logistics Centers, customers locating at North Houston can save nine months or more of development time and expense.

“The reality of a BNSF Logistics Center is a game changer for Cleveland’s industrial future,” said Mayor Otis Cohn. “Cleveland is perfectly poised for such a development as it is a vital and important link in our national transportation system. Cleveland lends itself to transportation services, located strategically as it is, but it took a company like BNSF to see and realize that potential.”

Logistics Center North Houston at Cleveland addresses the needs of the ever-growing Houston market. Located next to I-69 and State Highway 105, the site provides unrestricted access to the Greater Houston area. With more than 1,100 total acres, the business park is capable of handling multiple commodities offering a rail-served site that is customizable to fit the needs of customers. The facility features more than 20 new customer sites and has the ability to serve both manifest mixed freight and unit train single commodity customers.

“BNSF’s Economic Development team strategically selects logistics center locations for the convergence of rail and road at underserved, key growing markets,” said Colby Tanner, assistant vice president, economic development. “When our customers utilize the knowledge and expertise of our economic development team, they can expect to save significant time and money when locating their facilities at these prime locations, such as the Greater Houston area.”

BNSF Logistics Centers focus on offering direct rail service in multi-customer, multi-commodity business parks. BNSF invests directly in the development of the facility to create sites in under-served, strategic, end-user markets. These facilities can service carload, unit train customers or both.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.