Nate Asplund
Director – Public Private Partnerships
September 20, 2009
SCORT 2009
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Panel: Partnering – Freight Service
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Discussion Topics
•BNSF IntroductionBNSF Introduction
•Nation’s NetworkNation’s Network
• InvestmentInvestment
•Successful PartnershipsSuccessful Partnerships
•Project ExamplesProject Examples
•Take AwaysTake Aways
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Serving 13 of the 19 fastest Serving 13 of the 19 fastest growing marketsgrowing markets
Connecting over 179 M Connecting over 179 M consumersconsumers
$30 Billion invested since 1997$30 Billion invested since 1997
Operate 32,000 miles Operate 32,000 miles
Host Amtrak on 7,000 milesHost Amtrak on 7,000 miles
Host commuter operations in Host commuter operations in five Metro areasfive Metro areas
Connecting Communities and Markets
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Sustainable Partnership OptionsHigher capacity, lower cost, lower impact
Fuel Efficiency Up 80% since 1980 Truck – 5.3 to 5.1 mpg
Environment More than 60% less CO2
than long-haul truck
Scalability Leverage chokepoint relief
Constructability Less footprint, cost and
time
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National Network Trends
US Highway and Rail Networks System Miles and Volumes
5060708090
100110120130140150160170180190200210
1980 1985 1990 1995 2000 2005
Highway - VMT Highway - Lane-miles Rail - RTM Rail - Track-miles
Source: National Rail Freight Infrastructure Capacity and Investment Study September 2007 and AAR
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6
0%
5%
10%
15%
20%
Source: Annual State of Logistics Report, Council of Supply Chain Management Professionals
200710.1% of GDP ($1.4 Trillion)
Transportation Costs
Inventory / Admin. Costs
U.S. Logistics Costs as a Percent of GDP
Supply chain costs are increasing
What Drove Logistics Costs Down from 1980 to 2004?
Transportation deregulation Excess capacity Low fuel costs
What Drove Logistics Costs Down from 1980 to 2004?
Transportation deregulation Excess capacity Low fuel costs
What’s Driving Recent Supply Chain Cost Trends? Higher fuel costs
Congestion Aging (legacy) infrastructure
Public policy Increasing U.S. labor costs
What’s Driving Recent Supply Chain Cost Trends? Higher fuel costs
Congestion Aging (legacy) infrastructure
Public policy Increasing U.S. labor costs
$0.9T
$0.5T
Will the investment be enough?
Total Needed Sources of Capital
$135 B
Growth
Productivity
Shortfall
$70 B
$26 B
$39 B
Class 1 capital investments needed to meet 2035 freight volume demand
Source: National Rail Freight Infrastructure Capacity and Investment Study September 2007
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Capital Commitments$30B Invested in the last 12 years
2002-2007: ROIC is restated to reflect the change in methodology for discounting operating leases.
$ M
illi
on
s
Capital Commitments with ROIC
Funding Infrastructure Mobility Impacts Make Freight Rail PPP’s Economically and Politically Viable
Public Impact and ConcernPublic Impact and Concern
CongestionCongestion
Air Quality and COAir Quality and CO22
SafetySafety
Economic DevelopmentEconomic Development
Delays and CostsDelays and Costs
Energy SecurityEnergy Security
Global CompetitivenessGlobal Competitiveness
Cost of Highway InfrastructureCost of Highway Infrastructure
Go-Alone:Go-Alone: Public Investment in Highway Public Investment in Highway
Maintainability of current system Maintainability of current system
Cost of adding thousands of new lane miles Cost of adding thousands of new lane miles by 2020by 2020
Metro area right-of-way constraintsMetro area right-of-way constraints
Funding and Toll-road concernsFunding and Toll-road concerns
Energy, environment & safety impactsEnergy, environment & safety impacts
PartnershipPartnership: Public Investment in Rail: Public Investment in Rail
Energy, environment & safety benefitsEnergy, environment & safety benefits
More economical footprint for freight growthMore economical footprint for freight growth
Lower construction cost per GTMLower construction cost per GTM
System leverage from fixing chokepointsSystem leverage from fixing chokepoints
Private maintenance after constructionPrivate maintenance after construction
Rail PartnerRail Partner
NetworkNetwork
CapacityCapacity
SponsorSponsor
ROICROIC
ResourcesResources
TimingTiming
Public PartnerPublic Partner
MandateMandate
BenefitBenefit
SponsorSponsor
FundingFunding
ProcessProcess
TimingTiming
Successful PartnershipsAligning Public and Private Objectives
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BNSF Project Examples Strong Partnerships Work
Recent Successes Tehachapi Trade Corridor Port of Vancouver USA Expansion Connect Oregon II Burlington Bridge Part I
Active Projects Kansas City Intermodal Facility Tower 55 Hobart Truck Efficiency Project Burlington Bridge Part II
Tehachapi Mountains - California
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Take Aways
Viable Partnership Opportunities
Improve Capacity, Velocity, Feasibility
Chokepoints
Connectors
Intermodal
Carload
PPP’s are Only a Part of Meeting the Investment Requirement
Regulatory Environment for Long-Term Investment also Critical
Passenger and Freight Common Ground
Congestion Relief , Mobility Choices, Sustainability, Environment