Kansas City Intermodal Project Standing Committee on Rail Transportation Annual Meeting
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Kansas City Intermodal Project
Standing Committee on Rail Transportation Annual Meeting September 21, 2010
BNSF Overview
One of the largest North American railroads
32,000 route miles, 28 states and two Canadian provinces Agricultural Products
Haul enough fertilizer in one year to fertilize a field the size of Kansas Coal
Haul the coal that powers one out of every 10 homes in the nation Consumer Products
3.9 million intermodal units traveled on BNSF versus our nation’s highways in 2009 Industrial Products
Haul enough asphalt in one year to lay a single lane road 4 times around the equator
Enough paper to print one billion Sunday papers
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BNSF Network
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BNSF CP Volume – 2009 Full Year
Total units and % of total Ag 945 11% Coal 2,390 28% Consumer Products 3,911 47% Thousands International Intermodal 1,954 50% (of CP Volume) Industrial Products 1,172 14% 2009 Total BNSF Volume 8,418
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Auto 98 2% (of CP Volume) Domestic Intermodal 1,859 48% (of CP Volume)
BNSF CP Volume – 2nd Quarter 2010
Total units and % change from 2009 Thousands Coal 590 +0.2% Ag 244 +15.1% Industrial Products 368 +30.5% Consumer Products 1,046 +9.2% 2010 Q2 Total BNSF Volume 2,248 +10.1%
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International Intermodal 542 +14.3% Auto 31 +29.2% Domestic Intermodal 473 +2.8%
BNSF CP Volume – 1st Half 2010
Total units and % change from 2009 Thousands Coal 1,159 -4.7% Ag 513 +16.9% Industrial Products 674 +16.2% Consumer Products 2,001 +3.5% 2010 1 st Half Total BNSF Volume 4,347 +4.3%
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International Intermodal 1,035 +6.6% Auto 58 +28.9% Domestic Intermodal 908 -1.1%
Industrial Production
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World Trade Flows 1 2 3
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China-US: Twin Engines of the World
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Population: US: 298 million China: 1,307 million (1/5 World) The number of Chinese children in elementary school is equivalent to the total US population.
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Motor Carrier Challenges
Fuel Prices
Driver Issues
Shortage – Recruitment – declining demographic Retention – Quality of Life
Rising Pay
Legislative
Hours of Service Rules Impact
Environmental
New Emission Engines (Capital, Fuel Efficiency, Maintenance)
Competitive Environment
Market Fragmentation – Further consolidations/acquisitions
Capacity Growth
14.9% in ’90’s - averaging less than 3% in 2000s Class 8 Tractor Sales – 48% increase – mostly replacement
Rising Insurance Costs - $2mm deductible per occurrence
Historic Pricing Environment - 8-10% opportunity. Highest since deregulation
Reduce Capital Cost – Tractors/Trailers
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What is driving rail demand?
Coal Production Driver Shortage Agricultural Trade Growth Capacity Investments Growth Highway Congestion Fuel Transpacific Trade
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BNSF Intermodal Traffic Flows
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BNSF’s Intermodal Facility Network
Seattle Stockton Oakland Los Angeles San Bernardino Chicago (Cicero) Chicago (Corwith) Chicago (Willow Springs) Logistics Park - Chicago Kansas City Memphis Alliance Fairburn
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Capacity Driving Growth
3 rd new logistics park in 5 years – located 25 miles outside Kansas City
SIG Los Angeles KC LPC Logistics Park Kansas City – Edgerton, Kansas Targeted for 2013 Design includes
Eight 8,000’ strip tracks under wide-span cranes
Associated stacking area
Initial capacity of 500,000 lifts
Warehousing on adjacent parcels by TAG KC.
Memphis
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What is a Logistics Park?
Business Park with Logistics Focus
Efficient Handling of Rail Shipments
Trailers/Containers
Truck to Rail/Rail to Truck
Multimodal Facility
Rail Served Distribution
Non-Rail Served Distribution Logistics Park - Chicago
Wide Range of Options of Shipping Public It is NOT…
A Typical Rail Switching Yard
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Alliance
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Alliance
Logistics Park-Chicago
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Chicago
Logistics Park Chicago and CenterPoint Intermodal Ctr., Elwood, IL Major Customers Wal-Mart 3,400,000 SF Sanyo Logistics/ Partners Whse 600,000 SF Potlatch, Inc. 624,000 SF DSC Logistics 1,022,000 SF Georgia-Pacific 1,001,200 SF Calif. Cartage 215,000 SF Intermodal Facilities 700+ acres 1.1 million unit capacity in 2006 1.4 million unit capacity by 2009 Auto unloading facility Future Development 219 developable acres 660 MW coal-fired power plant
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Example Intermodal Facilities
Intermodal Facility (Container/Trailer Unloading)
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Logistics Park - Chicago
Regional Site Location
ARGENTINE INTERMODAL FACILITY
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GARDNER INTERMODAL FACILITY & LOGISTICS PARK
Argentine Intermodal Facility
371,529 Lifts in 2007
17% Year over Year Increase
Second Fastest Growing Intermodal Facility
Exceeded Only By Logistics Park-Chicago
727,322 Lifts in 2006; up 60 %
10,000,000 BNSF Overall Lifts in 2006
5% Increase
Argentine Intermodal Facility Sits on 45 Acres
No Room for Expansion
No Sites for Customer Co-Location
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BNSF Railway
Gardner Intermodal Project Franklin County Board of Realtors March 7, 2007
Why Site In Edgerton?
Proximity to Kansas City Metroplex
Adjacent BNSF Transcontinental Mainline
Near Interstate 35
Available Land in Configuration for Intermodal Facility
Available Land for Economic Development
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Project Area
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Intermodal Facility
Logistics Site 183rd Logistics Site 191st Gardner 35 199th Edgerton
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Kansas City Intermodal Facility
New facility targeted for 2013 Located 25 miles outside K.C.
Warehousing developed on adjacent parcels Design includes Eight 8,000’ strip tracks under wide-span cranes Associated stacking area Initial capacity of 500,000 lifts 25
Intermodal Facilities
Intermodal Facility (Container/Trailer Unloading)
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Wide-Span Crane Facility under Construction
Environmental Clearance-404 Permit
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Infrastructure Considerations
Initial Improvements Potential Future Improvements 56 x x x x x x 183rd x x x x x x x x 199th Either/Or 191st 35
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Summary of Economic Impacts
Total Fiscal Impacts by Jurisdiction (2007-2026)
$1.7 Billion to State of Kansas
$87.5 Million Annual Average to State of Kansas
$1.4 Billion to Johnson County (82% of total)
$72.2 Million Annual Average to Johnson County
$69.2 Million to City of Edgerton
$3.46 Million Annual Average
Employment Impacts (2007-2026)
13,230 (Total Direct/Indirect) New Jobs in State of Kansas
12,180 New Jobs in Johnson County
7,471 Direct New Jobs in City of Edgerton
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Summary of Economic Impacts
Wage Impacts (2007-2026)
$173 Million in City of Edgerton
$8.7 Million Annual Average
$6.6 Billion in Johnson County
$7.7 Billion in State of Kansas
Sales Impacts (2007-2026)
$30.2 Billion in State of Kansas
$1.5 Billion Annual Average
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The Legislation
Tax Bill
Adds $35MM to Highway Fund
Allows KDOT to transfer funds from Highway Fund
Created Intermodal Facility District
Intercepts State portion of Utility Taxes to Highway Fund Transportation Bill
Allows KDOT to apply Rail funds to Intermodal Facility District Final Passage late Tuesday afternoon, May 11 $35MM
Repaid by State portion of Utility Sales Taxes Grant funds available 3Q ‘10 Notice to Proceed by 12/31/10
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KC-IMF Project Status
Civil Construction Bid Released-7/21/10
Bids Received-9/3/10
Contractor Interviews Completed-9/10/10
Civil Contractor Recommendation-10/1/10
Notice To Proceed Anticipated Late 4Q ’10
Anticipate 33-36 Month Construction Schedule
KDOT Proceeding with New I-35 Interchange
Homestead Lane
Anticipated Similar Construction Schedule
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Benefits of State Approach
Provides $35MM to Incent Project
Obviates Need for Scarce Federal Funding
Competitive-Award probability/amount uncertain
Permitting issues
Provides flexible/phased construction schedule
Complements KDOT’s T-Works Strategy
Positions State/Region for Future Market Growth
Further Strengthens Partnership of BNSF/Kansas
Provides National Example of Public Private Partnership
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Intermodal Facility Planning
Regardless of the Port of Call we would always prefer on-dock capacity to near-dock.
In the absence of adequate on-dock we always look for a near dock option
We believe that once KCIMF is built we will be well positioned in the near term for inland ports
As trucking costs lead to increased economic benefits of shorter haul rail smaller inland ports will develop.
Wide span cranes provide the ability to significantly increase the density of a footprint whether they be small footprints or big.
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Facility Opportunities Group
Cross-functional Team within BNSF
Marketing, transportation, economic development Coordinates New Multi-customer Facility Requests Classification of Type of Service
Intermodal, Transload, Auto, Carload Logistics Details New Facility Opportunities Provide Service to a Market not Currently Served with Existing Facilities Can the Lane be Served Through Intermodal Service Consistent with Core BNSF Network Weekly Minimum Volume to Maintain Trainload Economics and Inbound and Outbound Balance Sustainable Growth over Long Term Period
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