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 S e p T e m B e R / o C T o B e R 2 0 0 6

‘Game-Changing’ InitiativesMerchandise car velocity

has been steadily improving, thanks in part to the efforts

of the Service Design & Performance group. Read how

one division benefited from the department’s help.

Page 4

The ABCs of RetirementRetirement is on the horizon for many BNSF people, and while

many employees have been building their financial savings

for years, a successful retirement demands mental and emotional

considerations as well.Page 6

Also InsideEnsuring Safety

In recent months, there has been a sharp decline in safety performance across the railroad, reversing a

trend of safety improvements. Mark Schulze, vice president, Safety, Training and Operations Support, addresses the issue in a letter to all employees. Page 2

Trip Rates on Through-Freight Runs Streamline Pay Process

Trip rates on all of BNSF’s 360 through-freight runs have now been implemented. With this new system,

several pay components are figured into a single-rate pay for conductors and engineers,

simplifying the pay process. Page 8

RAIlwAy STAFFVP, Corporate Relations Richard Russack

editor: Susan Green

Contributing photographers: Jeff Buehner, Lara Hartley and Clarke Sutphin

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.

� RAIlwAy I SEPTEMBER/OCTOBER 2006

oN The CoVeRA BNSF grain train heads west of Forsyth, Mont. Photo by Clarke Sutphin.

To all BNSF employees:

Recent BNSF injury and accident results show that we need to renew our focus on safety.

Through September of this year, we had three fatalities and nearly 450 injuries to members

of the BNSF family. Additionally, we had nearly 400 rail-related accidents, many with

significant consequences.

Despite making record-breaking improvements in safety during the first two months of 2006,

we’ve seen a sharp decline in our safety performance in recent months. This trend is especially

concerning because it reverses the trend of steady safety improvements we had been making.

This is the first time in several years that we’ve seen such a dramatic reversal in our safety

performance. Each of our major functional areas is falling short of our safety targets for the year.

I wish we could say that we’ve pinpointed a single cause or a set of causes for our current

injury experience, but we haven’t. We’re looking at our safety data from every conceivable angle

to identify meaningful interventions – from work activity, to years of service, to time of day, to

weather conditions at the time of injury, to body part injured. We will create safety programs

to address patterns that are found, and we will communicate these programs through System

Safety Briefings and other means.

It’s clear that there’s no shortcut or “magic bullet” that will instantly solve our safety issues.

What we do know is that each and every one of these incidents was preventable. With this in

mind, I do believe every one of us can help reverse the current injury trends. Here are some of

my core beliefs about safety:

Our safety vision that each and every accident or injury is preventable remains valid and attainable. The fact that we have so many individuals and teams that work many

years without an injury just underscores this truth.

Everybody owns safety. Everybody can have an impact. We are wrong if we think that

safety is the responsibility of our supervisor, our general manager or our safety manager.

Every one of us is responsible for identifying and preventing risk, working safely and

looking out for our co-workers. Every single day, we must each renew our personal

commitment to working safely.

Our greatest power to improve safety is through our local employees and site safety teams. Our System Safety team can provide tools and guidance to support local safety

efforts, but ultimately each location and work team knows better than anyone the safety

risks and challenges unique to their area and responsibilities.

We never have to compromise safety to achieve other important initiatives. As we’ve

seen many times, initiatives that truly improve efficiency and velocity will enhance, not

impede, safety. Our experience bears out that our best-performing organizations also tend

to be our safest.

Our level of safety preparedness should not vary based on condition or place. We must

practice safety preparedness in all situations. We must never let down our guard,

regardless of our craft, job task, work location, familiarity with the job, or the weather

conditions. The fact that we see many types of injuries in a wide variety of circumstances

reinforces the need for vigilance at all times and in all work activities.

We are clearly at a crossroads. If you have any safety concerns or if you see opportunities to

reduce risk and prevent injuries, take action. Each of us has the ability to change the direction of

this trend and help return to a culture where we are making meaningful safety improvements.

It’s up to each of us, whether we’re a division safety coordinator, a purchasing manager, a track

inspector, a locomotive engineer, a shop supervisor or any other one of BNSF’s 40,000 family

members. We must each renew our commitment to ensuring we have an injury-free and accident-

free workplace.

ensuring Safetya message from mark Schulze, Vice president, Safety, Training & operations Support

RAIlwAy I SEPTEMBER/OCTOBER 2006 3

By Suann lundsberg

An important development in improving America’s freight rail capacity happened on July 26, 2006, when Senators Trent lott (R-Miss.) and Kent Conrad (D-N.D.) introduced S.3742, the Freight Rail Infrastructure Capacity expansion Act. This legislation would provide a 25-percent tax credit for

investment in: new freight rail infrastructure; adding new track to existing right-of-way, such as a second main line; adding new or

extending sidings on existing right-of-way; constructing new intermodal or transload facilities; new, technology-based expansion, such as signaling dark

territory; and new locomotives that increase the horsepower capacity of a railroad’s fleet.

Railroad Capacity legislation Introduced in the Senate

BNSF was honored in September by the national committee for Employer Support of the Guard and Reserve (ESGR) as the recipient of the 2006 Secretary of Defense Employer Support Freedom Award. BNSF joined an elite group of 15 companies selected from more than 5,000 nominations honored for their exceptional support of the National Guard and Reserves.

“We value our employees who choose to serve and are honored that our personnel policies have been recognized for that support,” said John Lanigan, BNSF executive vice president and chief marketing officer, who accepted the award at a ceremony held Sept. 21 in Washington, D.C.

During the nomination process, BNSF had more than 195 employees serving on active duty in support of the War on Terrorism, and more than 400 BNSF employees have been called up to serve since September 11, 2001. BNSF provides differential pay and continues all benefits for the entire length of employees’ deployments.

“BNSF recognizes the commitment and talent associated with U.S. military service and recognizes the values and sacrifices by those employees called to active duty,” said Lanigan, who retired in 1997 from the U.S. Coast Guard Reserve with more than 20 years’ active duty and reserve service.

ESGR is a Department of Defense agency established in 1972. Its mission is to gain and maintain active support from all public and private employers for the men and women of the National Guard and Reserve.

BNSF honored with eSGR’s 2006 Freedom Award

compound annual growth rate. This would mean a total of 865 million trucks operating in 2020, 60 percent more than today.

Rail is forecasted to grow at a 1.94-percent compound annual growth rate. This would mean a total of 48 million railcars in operation in 2020, a 55-percent increase over today. And finally, water or barge traffic is projected to grow at a .68-percent compound annual growth rate. This would mean one million barges in operation in 2020, a 30-percent increase over today.

This legislation has been endorsed by diverse organizations and BNSF customers including: American Association of Port Authorities Alliance to Save Energy Waterfront Coalition (includes businesses such as The Home Depot, Target, Nike, Retail Industry Leaders Association, JC Penney, Mattel and Office Depot) American Council for an Energy-Efficient Economy Arch Coal National Mining Association Intermodal Association of North America Maersk Evergreen American Short Line and Regional Railroad Association Railway Supply Institute

“S.3742 is one good way to ensure the U.S. supply chain has the capacity it needs to ensure our nation remains competitive globally,” Rose says.

The U.S. House of Representatives is expected to introduce a similar bill in the near future.

In addition, the Act would permit a tax deduction for rail infrastructure investments in the year they are made (“expensing”) instead of depreciating the asset over time.

“This legislation will help BNSF expand capacity more quickly, improve velocity and play a key role in helping alleviate nationwide transportation congestion,” says Matt Rose, BNSF chairman, president and chief executive officer. “This proposal is an example of public policy that will incent continued investments for capacity expansion by our industry, and will allow good projects to come on-line in time to meet capacity demands.”

Other Senate co-sponsors of S.3742 include Ben Nelson (D-Neb.), Chuck Hagel (R-Neb.), Mike Crapo (R-Idaho), Johnny Isakson (R-Ga.), Gordon Smith (R-Ore.), Daniel Inouye (D-Hawaii), Lindsey Graham (R-S.C.) and Bill Nelson (D-Fla.).

This legislation comes at a crucial time as concerns grow about freight transportation demand outstripping available capacity, even though the rail industry has been investing significantly. In 2005, the rail industry invested more than $9 billion. This year, that amount is expected to be $10 billion. BNSF alone invested $2.2 billion in 2005 and plans to invest $2.6 billion this year.

However, these investments may not be enough. The U.S. Department of Transportation projects a 67-percent growth in total freight traffic expected between 2000 and 2020.

In addition, the American Association of State Highway and Transportation Officials (AASHTO) forecasts U.S. domestic freight ton-mileage to grow at a 2.05-percent compound annual growth rate from 2005-2020. AASHTO forecasts truck traffic to grow at a 2.32-percent

From left to right: John Lanigan; Troy Campbell, conductor, Barstow, Calif.; Aaron Rossiter, management trainee, Belen, N.M.; Shawn Chrystal, safety manager, Stockton, Calif.; and Michelle Parrack, supervisor, Industrial Products, Fort Worth.

4 RAIlwAy I SEPTEMBER/OCTOBER 2006

Try as they might to return to normal operations, even after track was back in service, the Northwest Division was plagued by a virtual traffic jam, both in the yards and on-line. By April, the merchandise car inventory on the division hovered in the range of more than 18,000 cars a day; normally the division handles about 14,000 merchandise cars daily. Taking intermodal and grain traffic into account, the division was well above the 22,000 daily “red line” operations level.

“We asked Service Design & Performance (SD&P) to assist us in evaluating our Transportation Service Plan (TSP) schedules for our base merchandise plan,” says Doug Jones, the then newly promoted division general manager. “We focused on a variety of activities, but in particular blocking [cars] in our terminals and reduced work events on our critical subdivisions.”

“Our first job was to help unsnarl the ‘freeway,’ and then make sure it wouldn’t happen again,” says Bill Osborn, director, Performance Measures, SD&P. And just as one would tackle a backed-up highway, car by car,

the department – working hand in hand with the division – began the task of restoring the traffic flow and improving velocity by putting new processes in place.

Months of detailed analysis of the division’s merchandise car flow would be required. Customers were contacted to review their activities and, where feasible, make changes. For example, a paper customer is now pre-blocking cars on-dock according to SD&P’s blocking plan, meaning that when the cars come to BNSF’s local yard, they are train-ready, bypassing single-car switching into blocks that always results in car delay.

In addition, the 20 shortline railroads that serve the division and Canadian National, a major carload interchanger, were included in the analysis. In some cases, the shortlines were not pre-blocking any cars at all for BNSF.

The focus was intense, but fruitful. By June, the division’s daily inventory began dropping, and now is closing in on average levels. “While we continue to modify transportation plans, based on changes in our business environment, our focus on velocity and the dedication of our employees enabled the division to improve car velocity,” says Jones.

At the end of March, prior to the redesign and at the tail end of the weather issues, the division’s merchandise velocity averaged 82 miles a day. In September, the monthly average was 106.3 miles per day against the third-quarter division goal of 106.0 miles per day.

A side benefit of the process is that SD&P gained insight from the experience that can be applied to other divisions to increase carload velocity.

“What happened on the Northwest Division can happen anywhere and at any time, but the congestion there just happened to occur at the same time our department was organizing to measure and identify cycles – the peaks and valleys – of our merchandise traffic,” says John Orrison, assistant vice president, Service Design. “It was a great systemic opportunity for us. We can now take the same processes we applied

there, prototype, test and vet them elsewhere – all with a goal of increasing velocity that will result in improved service and car availability for our customers.”

“Game-Changing” InitiativesBetween 2000 and 2004, BNSF’s

merchandise car velocity was beginning to move down a path of improvement. But that road was more difficult to travel last year, when demand for BNSF’s services began catching up with capacity in both locomotive availability and merchandise terminal fluidity. Then came Hurricane Rita, which crippled parts of the Texas Gulf Coast, a primary route for BNSF’s merchandise traffic. By early 2006, recovery had begun, thanks to a renewed focus on velocity.

The 2006 velocity goal for merchandise cars is based on achieving quarterly car-miles-per-day goals. These are based on a 5-percent improvement over 2005 quarterly levels. Though the goals for the first and second quarters were not met, the third-quarter goal of 118.2 merchandise car miles per day was achieved.

Attaining and maintaining the goal requires “game-changing” initiatives not unlike those tested on the Northwest Division. To start turning the numbers around requires a basic understanding of what causes merchandise cars to “have the brakes on,” says Orrison.

“We found that in the cycle of a merchandise car, between the time a new cycle begins [when the empty car is released] to the time it moves to final destination and it is released [end cycle], that car is only moving on a train 18 percent of the time.”

Of the 82 percent of the time a car is in “dwell” status, it is under BNSF’s control about 55 percent of the time, either in a gathering and distribution yard or an intermediate yard. The remaining non-movement time it is under the customer’s control.

“Clearly, our focus is on improving the movement of a car ‘in train’ and on reducing car dwell time, both when BNSF and the customer

other Nature

frequently tests the mettle

of railroaders, and time and

again, we rise to the challenge.

Such was the case in the

Pacific Northwest in the first

quarter this year following one

of the worst winters in the

last 10 years. Above-average

snow and torrential rains

battered BNSF with mudslides

and flooding that caused main

track outages.

By Susan green

‘Game-Changing’ Initiatives Aimed at Velocity Improvements

Yard congestion severely impedes BNSF’s merchandise car velocity and overall service. Initiatives such as pre-blocking cars, among others Service Design & Performance recommends, help unsnarl the traffic.

RAIlwAy I SEPTEMBER/OCTOBER 2006 5

are in possession,” says Orrison. “That means we have to push every lever that affects a car, from making sure it has a waybill, to being reported correctly, to ensuring cars are blocked appropriately, among multiple other activities.”

But with an average of 118,000-plus merchandise and non-unit grain cars on-line each day, and some 38,000 origination/destination pairs, where to start?

What the group consistently found in its merchandise traffic flow analysis of those cars in the “bottom 20 percent” were common themes. Generally, the cars have a short haul – usually less than 196 miles – compared with the top 80 percent, which have an average 961-mile length of haul.

Orrison explains: “Most short-haul traffic must still be sorted en route. This sorting adds time that is not spread across high-mileage moves.”

The analysis also found the “bottom 20 percent” offenders tend toward intra-divisional flows with either multiple hand-offs internally or with interchange carriers, especially shortlines.

Changes, one Step at a Time“Turning the ship,” as Orrison refers to

merchandise car velocity, requires pushing multiple levers and involves multiple departments. To identify opportunities for improving velocity, a “four-legged stool” committee including SD&P, Customer Support, Equipment and Demurrage representatives meets bi-weekly.

The committee has identified the four “buckets” of a car cycle: transportation time, equipment time, customer time and offline time. Of these, BNSF can directly affect

transportation and equipment time, and influence customer time.

The transportation time bucket includes bad order time, origination yard time, destination yard time, train time and intermediate yard time. Equipment time includes cleaning and conditioning track time, pre-trip time, destination yard without further instructions, storage and equipment waiting for disposition.

The customer time bucket includes a car held for billing, held on lease track, constructively placed and actual placement.

“What we find is that some cars come to us without a waybill or proper billing information,” says Orrison. “We may need to talk to the customer about the issue, and Customer Support makes sure this information is properly communicated. Process glitches like these are being noticed, and correcting them is helping velocity.”

Other strategies that SD&P routinely suggests include: Redesign less-than-daily operations into daily operations to increase outlet frequency, as well as looking for opportunities to balance locomotives and crews Implement pre-blocking arrangements with shortlines and major customers to streamline switching Work with division Transportation supervisors to identify the root causes of terminal congestion Apply new technology such as blocking models to develop trip plans that reduce the number of times a car is switched and tools to assess Transportation Service Plan integrity

Of course, communicating and working with division personnel is key to making velocity improvements. “We went to visit the Operations people at Denver – the general managers, superintendents and trainmasters – to look at the velocity challenges there. They could point to the problems and recommend solutions; a long-term solution for a particular problem they were having is to add new track to support the growth of a local customer’s business, but that won’t happen overnight,” explains Orrison. “In the meantime, we have to figure out how to solve the problem.”

The solution was to work with the local customer that routinely released empty cars without a waybill. “The cars would sit in the Denver Yard, miss outbound train connections and plug up the yard. Now the customer has changed their billing process and released cars make quick connections. Inbound empty cars that used to queue in much-needed switching tracks at Denver are also being diverted to a shortline switching company,” says Orrison. “It was a matter of showing the customer their operations were erratic and harmful to BNSF’s ability to provide quick, consistent service to them and all the Denver-area customers. The bottom line is that they needed to work hand in hand with us to improve the situation.”

Among the “bigger picture” velocity opportunities SD&P is undertaking is adopting a uniform design standard of minimum 20 mph scheduled train velocity between origin and destination, including en route work. A review of Service Design schedules is also under way. For example, the team is looking at trains operating over a circuitous route, where too much scheduled train work results in re-crewing the train and where cars are stranded with long intermediate dwell time between train connections, among others.

“BNSF has honed its skills and can react tactically,” says Orrison, who joined BNSF last December and brings experience from eastern railroads. “Sometimes when you’re busy reacting, you miss the opportunity to revamp or redesign.”

According to Jones, SD&P’s efforts paid off. “The improvement in our velocity has significantly reduced customer issues, was the result of teamwork across all crafts in the field and the Network Operations Center in Fort Worth, and demonstrated the importance of a sound TSP design from the service design group.”

The real test, says Orrison, will be when winter and potential floods return to the Pacific Northwest.

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SD&P is working closely with the divisions to identify the root causes of terminal congestion.

6 RAIlwAy I SEPTEMBER/OCTOBER 2006

Retiring from BNSFMany employees have been building their

financial savings for years, but a successful retirement demands mental and emotional considerations as well. One of the best ways to avoid a stressful end to a career is to make sure all loose ends are tied up before walking out the door.

Before filling out any forms in anticipation of “pulling the pin,” the first thing to do is to talk with your supervisor.

“Developing and transitioning our workforce is a key strategy for BNSF. In anticipation of upcoming retirements, we are already hiring for future vacancies in critical roles. We are asking employees to share their exit plans with their supervisor so we can effectively transition and plan for retirements,” says Jeanne Michalski, vice president, Human Resources & Medical. “All employees can play a role in this by sharing their tremendous knowledge and experience with the workforce of tomorrow.”

Although retirement planning will vary by person, there are several things that all BNSF people must do: Notify your supervisor within 60 to 90 days of the date of your intended retirement. Notify the Railroad Retirement Board (RRB) and gather appropriate paperwork (birth certificate, marriage license, divorce records, proof of military service). Salaried employees should request a pension calculation. Decide about 401(k) options.

“The biggest anxiety is getting all of that paperwork done properly. There is a panic, but it is not as bad as everyone thinks it is,” says Carol Broome, general clerk, Tulsa, Okla.

For years, Broome has been helping employees retire. She says the most common concern among scheduled employees is finding documents like birth certificates and marriage licenses to send to the RRB. However, with proper planning, this can be taken care of months in advance.

Broome says that many employees fail to research the best way to convert their medical insurance upon retirement. For scheduled employees, health insurance will continue for one month following the last month of compensated service. For example, if an employee’s last day was Sept. 1, his or her last day of company insurance coverage would be Oct. 31.

Although health insurance is provided for scheduled retirees who are age 60 with 30 years of service, the basic plan is less comprehensive than for active employees. There are other options, so Broome advises every employee to review a variety of medical insurance options before deciding on one.

Medical insurance for salaried employees continues until the end of the month in which they retire. Employees eligible for salaried retiree medical coverage have the same options as active employees, but enrollment through the Benefits Administrator is required.

Get a hobby After all of the paperwork is signed, how

should today’s retirees mentally approach the years ahead?

“You are certainly going to be able to relax more and rest more, but there is a whole new set of issues that comes with retirement,” says Amy Pool, manager, Employee Assistance Program (EAP). “A lot of people think about retirement and their financial portfolio, but

they need to think about their psychological portfolio, too.”

For many BNSF employees, retirement comes at the end of 30 or 40 years of service. Leaving the workplace after this length of time is an adjustment that can be unexpectedly overwhelming.

“I don’t know that I’ve ever talked to anyone getting ready for retirement that didn’t have a lot of emotion associated with it,” says Doris Zwadyk, manager of scheduled benefit plans, Labor Relations, Kansas City, Kan. “Many say ‘I can’t believe I’ve worked all this time and have to leave this place. I didn’t think I’d feel this way.’”

For those who greet retirement with a bit of anxiety, EAP’s Pool has one word of advice: Prepare. “A career is a big part of your identity. If you don’t have anything to replace it with, there can be a sense of loss, kind of like a grieving process,” says Pool.

For retiree John Berryhill, a 31-year veteran switchman in Tulsa, the replacement came in the form of his 20-acre farm and dinner parties. The projects he had put off while working now keep him busy all day, though he admits to sneaking in a nap now and then. In addition, every month Berryhill reunites with his former co-workers to swap stories over dinner.

By Katie Scarlett o’hara

of RetirementTheABCs

Golf outings, european vacations, afternoons with family and friends – retirement is generally known as a time of leisure. Preparing for it, however, requires a lot of work. without planning, new retirees may face a range of unknowns, from how to fill up their days to how to fill out paperwork.

Questions every retiree should ask:

• Am I comfortable leaving the workplace and starting my new career?• What do I love doing?• What do I want to accomplish?• What do I want to avoid?• Who do I want to spend time with?• Where do I want to travel or live?• How much can I spend each year?• Do I want to leave a mark, financially or otherwise?

RAIlwAy I SEPTEMBER/OCTOBER 2006 7

Pool recommends a social support network similar to Berryhill’s, with a focus on quality over quantity. A few close friends can make all the difference in determining if a retiree will enjoy or loathe retirement.

This same mindset should apply to hobbies. Although some may choose to travel the world, Berryhill emphasizes that just a little something to do each day can make it fulfilling without being exhausting. He, like Pool, recommends planning these hobbies long before the last day worked.

“Don’t wait until the last day before you say, ‘Yes, this is what I’m going to do.’ Do what you have always loved ... something you can do to keep your mind busy. Don’t think you’re just going to go fishing all the time. That gets old,” says Berryhill.

Popular retirement activities include starting a small business, going back to school, volunteering at a local service agency or picking up a hobby like quilt-making or rebuilding old cars. These activities keep both the mind and social network active and growing.

Another option available to some retirees is to see the nation via Amtrak. Employees hired prior to April 26, 1981, may be eligible for reduced-rate transportation on Amtrak. In some cases, employees hired prior to April 30, 1971, may be eligible for free and/or reduced rates. To find out your eligibility status and level of benefits, contact the Amtrak Pass Bureau at 817-352-4982 (company line). You can leave a message with your questions, and someone will contact you.

Getting in the MindsetPool says that whatever retirees choose

to do, whether it is relaxing at home with grandchildren or roaming the world, their mindset going into retirement will often reflect their mindset during their golden years.

“If you were not prepared for retirement, if you weren’t really planning for it, you are going to be at risk,” says Pool. “If you were somebody who was isolated and depressed before retirement, you may have a tendency to be isolated and depressed after. Retirement is not going to make all of that go away.”

Employees approaching retirement should set goals and ask questions like: Where do I want to be and by what time? What actions do I have to take to get there? Almost as important as setting goals is constantly re-evaluating them.

Sandy Stubblefield, director of Leadership Training, Fort Worth, plans to retire at the end of the year. She hopes to learn how to golf, finish the photo albums she has been putting off, transfer all her recipes to the computer, learn quilting and maybe even start a consulting firm on the side. However, she is content if her long list of projects dwindles to simply spending quality time with her husband at home.

“You just have to have some things lined up. When you turn loose of those emotional ties at work, you have to be open and ready for new ones,” says Stubblefield.

Pool says the best advice is to consider retirement as a career change and the job’s main responsibility is to take care of one’s self, especially if the retiree has not had time to do this before.

“When you are busy and caught up in your career, it’s easy to say ‘I don’t have time to do the things I love or to take care of myself,’” says Pool. “But it’s never too late to start.”

For people not used to exercising, Pool says retirement is the perfect time to start. She advises retirees to use their extra time and form a walking group, join a tennis club or enroll in a class at the local YMCA. Not only do these activities promote physical health, they introduce the retiree to a new group of friends.

Although planning may seem like a job in itself, Zwadyk says she witnesses few people who do not love their retirement days.

“People have worked here all their life. They’ve earned the retirement, and they go out there and take advantage of it,” Zwadyk says. “Most can’t believe they ever had time to work.”

Retiree Checklist:

Salaried Notify supervisor and Human Resources

Request pension calculation (Retirement

Team at 877-451-2363)

Review/exercise stock options

Decide about 401(k) as you will need to

determine if you keep funds in BNSF Plan

(must be distributed by age 65); roll funds

to an IRA or other qualified plan; or take

distribution of funds

Send copies of proof of birth, marriage,

divorce or military service to RRB

and Retirement Team

Contact the benefits administrator to set

up retiree medical elections (if eligible) and

convert life insurance, if desired

If relocating, submit new address to BNSF

Scheduled Notify supervisor

Notify union

Request pension calculation from RRB

Convert medical insurance

Decide about 401(k) – Vanguard or

T. Rowe Price

Take originals of proof of birth, marriage,

divorce, military service or death to RRB

Fill out employment termination form and

give to Personnel Records in Topeka

If relocating, submit new address to BNSF

helpful Retirement numbers:

BNSF RailroadPersonnel Records Topeka 785-676-3602 Topeka 785-676-3610Payroll Hotline Topeka 785-274-3345 800-274-6739Benefits Information https://eol.bnsf.comEmployee Assistance Program 800-383-2327

Health Insurance (Scheduled Employees) Coastlines Hospital Assoc. Los Angeles, Calif. 626-967-3550

United Health Care P.O. Box 30985Salt Lake City, Utah www.myuhc.com 800-842-9905

Health Insurance (Salaried Employees) Some BNSF exempt employees have grandfathered eligibility for retiree medical benefits; contact BNSF’s benefits administrator at 1-877-451-2363.

Life Insurance/Investments/401(k)Met Life Insurance 800-310-7770T. Rowe Price 800-922-9945Vanguard 800-523-1188

Railroad Retirement BoardHelp Line 800-808-0772 www.rrb.gov

� RAIlwAy I SEPTEMBER/OCTOBER 2006

The considerable task of implementing trip rates on all of BNSF’s 360 through-freight runs wrapped up July 1. With this new system – first conceived by BNSF in the round of national labor negotiations that led to the 2002 United Transportation Union (UTU) and the 2003 Brotherhood of Locomotive Engineers and Trainmen (BLET) agreements – several pay components are figured into a single-rate pay for conductors and engineers employed by Class I railroads such as BNSF, which was the first to implement a trip rate.

Trip rates help simplify the pay process, and a less complex pay process helps everyone focus on the important job of working safely as we serve our customers.

The process of implementing a similar pay process for crew members assigned to locals and road switchers is just getting under way.

The evolution of Trip RatesPrior to the implementation of through-

freight trip rates, conductors and engineers were paid separately not only for their time on duty but for additional services performed. For example, if an employee experienced a delay at the beginning or end of a through run, the employee had to submit a claim for additional compensation called “initial terminal delay” or “final terminal delay.”

Under the previous system, employees were paid differently for some things depending on when they began employment with the company. Deadheading was a prime example. When BNSF needs an extra through-freight crew at an away-from-home terminal, crew members are deadheaded (transported) via train or taxi to the away-from-home terminal. Employees hired prior to 1985 were paid a full-day’s pay for being deadheaded, whereas employees hired after 1985 were paid only the actual time consumed by the hour in this process.

“It was a very complicated pay system,” says BNSF Assistant Vice President, Labor Relations Milton Siegele. In a sense, it was not unlike the U.S. tax code. Over the years, complex and extensive negotiations between labor and management had made the pay structure for train crews more, not less, complicated.

According to Mark Banton, vice chairman of the BLET, “No two trips are ever the same – there’s always a variable.” The individual claims-submission process was how crew members were compensated for those variables: bad weather, mechanical problems and other incidents that kept them on the job longer than they were scheduled for, explains Banton. Essentially, the multiple-claim system allowed the pay to be “tailored” to a particular trip,

depending upon its unique set of circumstances.

Still, disincentives and inequities sometimes resulted. “If it took longer to get out of the initial terminal or into the final terminal, employees could often make more money,” says Siegele. “That kind of pay system wasn’t likely to improve velocity on the railroad, which we badly need today.” In addition, many “post-85” employees were declining assignments on deadhead routes because for them, the pay for this activity was relatively low. The problem had become particularly chronic along BNSF’s busy Southern California routes. Of course, as more post-85 employees continued to be hired, the situation was becoming worse.

Then came the national agreements with the UTU and the BLET of 2002 and 2003, respectively, which provided that several specifically identified elements of pay be rolled into a single payment, or “trip rate,” for through-freight runs. Some of the mandatory pay elements that were included in trip rates were initial terminal delay, final terminal delay, terminal switching and deadheading. To arrive at each trip rate, the railroads and unions looked at each through-freight run and calculated the average amount of money earned by pre-1985-hired crew members for all of the trip-rate elements. Today, that rate (calculated separately for each job) is now paid to everyone.

Benefits to employees “The result has been greater clarity about

how much each employee should be paid,” says Siegele. “It has put to rest the controversy surrounding the fact that different employees were being paid different amounts for doing the same work.” Other benefits include less time spent tying up at the end of each trip. After a 12- to 14-hour shift, it wasn’t much fun sticking around the terminal to tie up. Trip rates have also made it easier for conductors and engineers to estimate what they will make on a monthly basis.

The 44 BNSF compensation specialists in Topeka, Kan., who are responsible for handling all of the claims made by the company’s Train, Yard & Engine employees, have also benefited. For these employees, trip rates have been a

By amy Ray

Trip Rates on Through-freight Runs Streamline pay process

“godsend,” says Director Maggie Prellwitz, who manages the group. “It has helped us meet our pay-period closings and make more timely and accurate payments to our employees.”

On average, the compensation team received 250,000 records a month, and prior to the implementation of trip rates, 85 percent of through-freight pay claims had to be looked at manually by at least one specialist, says Prellwitz. Today, the number is down to just 40 percent, with the balance being automated.

Prellwitz says she’s proud of the fact that BNSF came up with the idea of trip rates in the first place, was the first railroad in the nation to implement a trip rate and has since led the way in terms of implementing all through-freight trip rates in a timely fashion. The union agreements in 2002 and 2003 allowed for the rates to be phased in over a two-and-a-half-year period.

Prellwitz is also pleased with the day-to-day implementation of trip rates has gone. “It’s provided an outlet for continuing positive communication with our employees and unions,” she says. “They know exactly what was captured in the trip rate calculated for each through-freight run.”

Trip rates are just one part of an ongoing compensation evolution – one that will continue to make it easier for BNSF employees to get paid and take more of the confusion out of the pay process, Prellwitz believes. “We’re also working to implement the railroad industry’s first ‘EZ Pay’ system, which will further streamline the pay process for our train and engine service employees,” she says.

Trip rates will make it easier for train crews to estimate what they will earn

each month as well as limit their time spent tying up at the end of each trip.

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BNSF Units handledYear-to-date through Sept. 30, 2006, and Sept. 30, 2005 2006 2005

2006 BNSF Velocity PerformanceYear-to-date through Sept. 30, 2006 3rd Qtr Goal Actual QTD

Locomotive miles per day 303.0 290.4

Agricultural car miles per day 168.4 177.7

Merchandise car miles per day 118.2 118.4

Coal cycle index 125.0 140.8

Intermodal stack transit days 5.2 5.1

Intermodal trailer transit days 2.6 2.7

Coal 1,822,087 1,661,143Agricultural Products 725,855 683,136Industrial 1,214,741 1,183,122Consumer 4,197,747 3,929,754System 7,960,430 7,457,155

BNSF Performance Measures

BNSF Stock12-month through Sept 29, 2006 S&P 500 Index BNSF

BNSF Reportable InjuriesYear-to-date through Sept. 28, 2006

443

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)

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RAIlwAy I SEPTEMBER/OCTOBER 2006 9

Passing the TestNo one likes taking tests, but braking system

tests are critical to the safe operation of the railroad. BNSF is one of the first adopters of new electronic testing technology that ensures that single-car air-brake tests are consistent from one car to another and from one tester to another. Although transition to the new technology is still in progress, it is already improving both safety and velocity for BNSF.

According to the Federal Railroad Administration (FRA), the single-car air-brake test – so-called because each test is done on a single car and not done in-train with cars coupled to many other cars – “has become the sole method by which air brake equipment on freight cars is periodically tested to identify potential problems before they result in the brakes becoming inoperative. The single-car air-brake test is critical to ensuring the safe and proper operation of the brake equipment on the nation’s fleet of freight cars.”

Single-car air-brake tests are required by federal regulations after certain components of a car’s brake system are repaired or replaced. Testing follows set procedures established by the Association of American Railroads and agreed to by the FRA. Defects identified as a result of the tests must be repaired on the spot, and the car’s owner is billed for the repairs if they are made by someone other than the owner.

BNSF carmen do an average of almost 300 single-car air-brake tests a day. With previous methods of manual testing, there was a chance that every one of those tests might differ slightly, based on the knowledge and experience of the person doing the testing.

And there was an understandable temptation to take shortcuts to save time.

“Electronic single-car air-brake testing technology ensures that the tests are done consistently every time,” says Dana Maryott, director, Locomotive and Air Brake Systems, Fort Worth. “The technology also ensures that new employees can conduct the tests in the same way as more experienced workers.”

Using the technology, workers perform all required tests, automatically, in exactly the same sequence. If the brake system fails a portion of the test, the technology tells the carman exactly what to fix and how to fix it, and the test cannot be completed until the failure is repaired. All test results are stored, and the data can be used to develop predictive maintenance techniques.

The consistency of testing has helped improve the velocity of the freight car fleet moving on BNSF track by reducing the number of brake system failures that occur after a car has been tested. For the first seven months of this year, the rate of failures after manual testing was 6.3 percent; for electronic testing, the rate was 4.9 percent. Every failure means that a car has to be taken out of service and repaired.

According to Kevin Allin, a Mechanical relief supervisor and carman in Argentine (Kansas City, Kan.), the technology is making single-car testing more thorough. “We’re repairing at a higher rate, which makes a better product in the long run.”

Maryott says electronic single-car testing also helps reduce billing disputes with other freight car owners, since the testing system provides a consistent written record of tests performed, defects discovered and repairs made.

Car owners have agreed to accept the electronic testing system’s records as evidence that a repair has been made.

The first prototype electronic testing devices were delivered to BNSF in 2004, and production models began arriving in 2005. All car shops should be equipped with the devices by the end of 2006, and mechanical road trucks should have the devices by the middle of 2007, completing BNSF’s conversion to electronic technology for all single-car air-brake testing. All railroads are expected to adopt the technology.

“Of all the railroads, BNSF is farthest along the curve toward implementation,” says Maryott. “We worked with carmen and our supplier to reduce keystrokes and address some other human-machine interface issues with the early models so that we could make the technology more user-friendly, and now long-time carmen tell us this is one of their most important tools.”

Allin says that while there are some hurdles to overcoming the newness of the technology, once the carmen get use to it, they’re on board. “I was skeptical at first, too, but now I see how valuable it is and like it,” he says.

By patrick hiatteTrip Rates on Through-freight Runs Streamline pay process

Trip rates will make it easier for train crews to estimate what they will earn

each month as well as limit their time spent tying up at the end of each trip.

Kevin Allin, Mechanical relief supervisor and carman, is a proponent of the single-car air-brake testing technology, which provides a consistent written record of tests performed.

10 RAIlwAy I SEPTEMBER/OCTOBER 2006

The scorecard includes the following

categories:

Derailments (related to train handling

or rules compliance issues)

Train separations

Decertification events

Exceptions based on event recorder

results, operations testing and

skills observations

Fuel-burn train-handling events

(power braking, stretch braking)

Fuel-burn rate (gross ton miles/gallon)

Results of bi- and tri-annual rules tests

Whistle compliance

BnSf wants to identify and recognize locomotive engineers who are meeting and exceeding the requirements of the job. So, earlier this year, BnSf rolled out a measurement tool – the locomotive engineer Scorecard – that outlines expectations for locomotive engineers and measures individual performance in meeting those expectations.

“We have many locomotive engineers out there who are doing an exceptional job,” explains Bob Repola, director, Operating Practices. “But we’ve never had an objective, consistent way to identify who they are and specifically what they’re doing to be so successful. The scorecard enables supervisors to recognize those engineers who consistently perform well.

“By setting clear standards and enabling supervisors to identify and recognize those engineers who do an outstanding job, the scorecard will help elevate the overall performance of BNSF engineers and, in turn, will result in a safer and more efficient operation,” Repola adds.

On the scorecard, each engineer begins with a total of 100 possible points. Points are subtracted from his or her score depending on the exceptions recorded within a 12-month rolling average. These categories include: Derailments (related to train handling or

rules compliance issues)

Train separations

Decertification events

Exceptions based on event recorder results,

operations testing and skills observations

Fuel-burn train-handling events

(power braking, stretch braking)

Fuel-burn rate (gross ton miles/gallon)

Results of bi- and tri-annual rules tests

Whistle compliance

Measurement criteria have been identified for each of these categories. For instance, one fuel-efficiency measurement includes the number of power-braking and stretch-braking events; both of these train-handling practices involve operating the brake and the accelerator at the same time and can negatively impact a train’s fuel efficiency.

As part of BNSF’s fuel conservation program, BNSF engineers have significantly reduced the number of power-braking and stretch-braking events. Now the scorecard enables road foremen of engines to recognize each locomotive engineer who has contributed to this success.

“In the past, when an engineer would ask me, ‘How am I doing?’ I’d typically rely on event recorder downloads to review their performance,” explains Steve Matzdorff, road foreman of engines, Vancouver, Wash. “Even though downloads are a valuable tool, they’re only a part of the picture, and they tend to show only the problems or exceptions. The scorecard gives a more comprehensive view of the engineer’s performance and touches on a lot of areas, including fuel efficiency and whistle compliance. Instead of telling an engineer that I don’t see any exceptions on the autoscan, I can say, ‘You’re doing an excellent job and achieved a rating of 96. Here’s the one thing you can work on improving...’ That’s more meaningful feedback.”

Because road foremen can view reports by territory as well as by individual, they can identify trends and best practices. “Say that 90 percent of the engineers on a territory can operate without using stretch braking,” explains Matzdorff, “that tells me I have a training opportunity for the 10 percent that are still using stretch braking. This will be an excellent learning tool and an opportunity to recognize those who excel.”

“The scorecard helps us tie an individual engineer’s performance back into our major strategies and goals for Operations,” Repola adds. “Locomotive engineers can know exactly what’s expected and can be recognized for helping us meet those goals.”

locomotive

By Kristen Rabe

The Locomotive Engineer Scorecard pulls together in one place information from several existing databases, including NetSimulator results, event recorder measurements, the operations testing database and fuel burn data. It does not require supervisors to input any additional or new information.

The scorecard will be a part of the annual division Employee Review Process (ERP). During this ERP discussion, supervisors will advise each locomotive engineer of his/her score and how that score was determined. This interview gives the employee the opportunity to ask questions, recognize successes and discuss any opportunities for improvement.

“I see the scorecard as a tremendous tool to manage and reward the locomotive engineers on my territory,” says Tyrone Fitzgerald, manager, Operating Rules, who was formerly road foreman of engines, Lubbock, Texas. “I’ve already used the scorecard to help identify the

top performers on my territory to lead some training. I’ve always felt that a performance-based measurement tool would be a good thing, and I’m really glad we have something that will help us recognize our very best engineers.”

Setting a Course for Successengineer Scorecard:

The Locomotive Engineer Scorecard outlines expectations for engineers, measures individual performance in meeting those expectations and gives road foremen a more comprehensive view.

RAIlwAy I SEPTEMBER/OCTOBER 2006 11

By Dr. Thomas Pace, Chief Medical Officer and Assistant Vice President, Medical and Environmental Health

a Tale of Two pandemics: What you need to Know about “Bird flu”

Information about avian flu, often referred

to as “bird flu,” is migrating through

television, newspapers and the Internet.

Unfortunately, the information – and in

some cases misinformation – about avian

flu has contributed to some confusion and

misunderstanding about this disease.

engineer Scorecard:

a fowl Disease: avian influenza poses little present Risk for humans

The avian flu virus – also called “H5N1 virus” – occurs mainly in birds. It is highly contagious among birds and can be deadly to them. This particular strain has existed in bird populations for many years and periodically erupts into more serious outbreaks.

Concentrated in wild bird populations such as ducks and geese, the disease can be transmitted from wild birds to domestic chickens, turkeys and ducks. The disease organism is spread from infected to non-infected birds through contact with body secretions, and bird droppings appear to be the main route for the disease’s transmission.

The bird flu virus first appeared in Asia, then Europe and Africa. Recently, a subtype of the virus was detected in wild mallards in Pennsylvania and Maryland. Testing ruled out the possibility of the virus being the highly pathogenic H5N1 strain that has spread elsewhere in the world. While the ducks were found to be positive with the low pathogenic avian influenza, which poses no threat to human health, no signs of disease were noticed in the birds.

The most important thing to know about the avian flu is that, even where the virus is epidemic in birds, human illness from it is rare. Avian influenza viruses, including more than 100 identified subtypes, normally only infect birds and, in rare instances, pigs, which have receptors for avian viruses. Equally important is that the virus currently cannot spread easily from human to human.

What about pigeons and mosquitoes?Railroaders concerned that the avian flu might

come from pigeons, which are commonly found on railroad property, should not worry. Various studies have determined that pigeons are resistant or minimally susceptible to infection by avian influenza. Mosquitoes, too, do not pose a threat.

human Cases While rare, sometimes animal-transmitted viruses

can “cross over” and cause illness in another species of animal. Such is the case with the avian flu. The first documented human infection with H5N1 avian influenza occurred in 1997 in Hong Kong. Since then, fewer than 200 people worldwide have been infected by the disease, and almost all are believed to have caught the bird flu from domestic chickens or their droppings.

Cases of human infection with the avian flu have been documented in 10 countries: China, Indonesia, Cambodia, Thailand, Viet Nam, Azerbaizan, Iraq, Turkey, Egypt and Dijoubti. Almost all human cases have occurred in rural areas of Asia where households keep small poultry flocks. The birds roam freely, often entering homes or sharing outdoor areas where children play.

The number of documented cases of humans catching avian flu from infected birds is extremely small compared with the huge number of birds affected. Presently, it is not understood why some people, and not others, become infected following similar exposures.

implications for TravelersTravelers to areas affected by the bird flu are not

considered to be at elevated risk of infection. The World Health Organization (WHO) recommends that travelers to affected areas avoid contact with

live animal markets and poultry farms, and any free-ranging or caged poultry. In areas experiencing outbreaks, poultry and poultry products can be safely consumed if these items are properly cooked and properly handled during food preparation.

Diagnosis and Treatments

While the virus currently is not easily transmitted from human to human, there have been a few cases of human-to-human transmission of avian flu in the world – a situation WHO is investigating.

Avian influenza cannot be diagnosed by symptoms alone, so a laboratory test is required. Avian influenza is usually diagnosed by collecting a swab from the nose or throat during the first few days of illness. Laboratory testing of the swab will either be through a molecular test for avian influenza virus or trying to grow the virus.

There is currently no vaccine for the human flu that could develop from H5N1; a vaccine cannot be developed for a new human-to-human flu strain until it exists. Some anti-viral medications already on the market have been used with limited success.

Although unpredictable, if the current avian flu strain were to biologically change and become more easily transmitted from person to person, the strength of the virus would most likely weaken and the effects of the disease would be milder.

pandemic planning – Just in CaseAt the International/Governmental Level:

Although unpredictable, an avian flu pandemic involving the present strain of H5N1 virus is presently considered to be highly unlikely. Even so, health officials advise that planning ahead is the best option.

Wild bird populations are being monitored continuously for the presence of infected birds. Federal, state and local governments are addressing public health preparedness, research, vaccine development and production, antiviral drug stockpiling and surveillance.

WHO, working with 115 National Influenza Centers in 84 countries, continuously monitors influenza activity and isolates influenza viruses worldwide. These centers will report the emergence of any “unusual” influenza viruses immediately to WHO.

WHO is also convening meetings with international partners to plan and coordinate preparedness activity. An Influenza Pandemic Preparedness Plan defines the responsibilities of WHO and national authorities in the event of a pandemic.

Last year, the Centers for Disease Control (CDC) joined the National Influenza Pandemic Preparedness

Task Force organized by the U.S. Secretary of Health and Human Services. This task force is working with international, state, local and private organizational partners to help ensure the most effective response possible when the next influenza pandemic occurs. CDC provided U.S. public health departments with recommendations for enhanced surveillance of H5N1 influenza in the country.

At BNSF:BNSF is committed to the health and safety of our

employees. To address health and business concerns related to a potential avian flu pandemic, a corporate strategic response plan has been developed. The plan looks at the implications of a pandemic for our employees and their families, and BNSF’s role in providing vital infrastructure to the nation. The company has also formed a cross-departmental leadership team to focus on the issue.

A key part of the response plan is providing employees timely and accurate information. The Medical Department continuously evaluates the risk to employees by monitoring the international status of the virus as part of the strategic response plan. We will continue to provide timely information through several communication channels, including a Web site that contains updated information on avian flu. There are links to the site through BNSF’s Intranet at http://bnsfweb.bnsf.com/departments/hr/medical/Avian_Flu/Avian%20Flu.pdf and the BNSF Labor Relations Web site at http://bnsfweb.bnsf.com/departments/laborrelations/html/avian_flu_faq.html

We want our employees and their families to be informed and not be misled by the misinformation surrounding the “bird flu” issue.

While current influenza vaccines used to ward off seasonal flu will not protect you from the avian flu, it is still flu season (October to December), so it’s time to get your flu shot.

The flu vaccine can help protect most people from the seasonal virus. In fact, 85 percent of those who get the shot are protected for about six months. The vaccine is especially recommended for the following groups of people:

• Everyone age 50 and older• Anyone with lung disease• Anyone with heart disease• Anyone with chronic kidney disease• Anyone with diabetes• Anyone with severe anemia• Anyone with HIVYour doctor should have the vaccine. But if

not, contact your local, county or state health department or a local pharmacy. All vaccines should be the same. Just be sure to go while supplies last.

Time for Seasonal Flu Shots

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2 0 0 6Team BNSF – At our best when needed most.

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It’s that time of year again – when BNSF employees and UPS pull together to achieve a damage-free, on-time holiday shipping season! Thanks to you, we’ve had seven perfect UPS peak seasons since 1995, with back-to-back Perfect Peaks in 2002, 2003 and 2004. And we can do it again in 2006! BNSF is proud to partner with UPS. This season, that will mean working together to ingate, load and expedite more than 36,000 loads in the 29 short days between November 25 and December 23. It also means going above and beyond to provide the “good saves” that ensure top-quality service to tens of thousands of UPS customers. In the past, our good saves have included unplanned detours without lost time, proactive identification and rerouting of misbilled shipments, speedy derailment recoveries, spur-of-the-moment repairs or transloading, preventive safety measures and more. So roll up your sleeves. Polish up your holiday spirit. Give it your all. And report this year’s good saves by e-mailing goodsaves@bnsf.com. UPS needs all of us for a Perfect Peak – because we’re the team that’s at our best when needed most!