netrashetty
Netra Shetty
The BNSF Railway (reporting mark BNSF), formerly known as the Burlington Northern Santa Fe Railway, is an American freight railroad company headquartered in Fort Worth, Texas; it is one of four remaining transcontinental railroads and one of the largest freight railroad networks in North America. Only the Union Pacific Railroad, its primary competitor for Western U.S. freight, is larger in size. The BNSF Railway moves more intermodal freight traffic than any other rail system in the world.[citation needed]
It was formed December 31, 1996, as the Burlington Northern and Santa Fe Railway when the Atchison, Topeka and Santa Fe Railway was merged into the Burlington Northern Railroad. In 1999 BNSF and the Canadian National Railway announced their intention to merge and form a new corporation entitled the North American Railways to be headquartered in Montreal, Canada. The United States' Surface Transportation Board (STB) placed a 15-month moratorium on all rail mergers, which ended this merger. On January 24, 2005, the railroad's name was officially changed to BNSF Railway.[2]
The BNSF Railway is a wholly owned subsidiary of the Burlington Northern Santa Fe Corporation, the holding company formed by the September 22, 1995, merger of Burlington Northern, Incorporated, and the Santa Fe Pacific Corporation. According to corporate press releases, the BNSF Railway is among the top transporters of intermodal freight in North America. It also hauls enough coal to generate roughly 10% of the electricity produced in the United States. The company's three transcontinental routes provide a high-speed link between the western and eastern United States.
On November 3, 2009, Warren Buffett's Berkshire Hathaway announced that it would acquire the remaining 77.4% of BNSF that it didn't already own for $100 per share in cash and stock - a deal valued at $44 billion. The company is investing an estimated $34 billion in BNSF and acquiring $10 billion in debt.[3][4][5][6][7] On February 12, 2010, shareholders of Burlington Northern Santa Fe Corporation voted in favor of the acquisition
In 2009, BNI was acquired by Berkshire Hathaway (BRK).[1]
Burlington Northern Santa Fe (NYSE: BNI) is the second-largest U.S. railroad company with over 6,300 locomotives and 32,000 route miles. The company ships freight, such as coal and agricultural products, throughout the western two thirds of the United States.
In recent years, Burlington has benefited from rising demand for coal energy in the US. Increasing volumes of imports from China have also increased demand for BNI services. Most imports enter the U.S. through California and have to be shipped through out the U.S. by railroad companies like Burlington.
Business Overview
BNSF primarily serves the Midwestern, Western, and Southern regions and ports of the US. BNSF transports coal and a range of consumer, industrial, and agricultural products.
The following map shows BNSF's primary routes and trackage rights - which allow BNSF to access major cities and ports in the western and southern United States as well as Canadian and Mexican traffic. BNSF also serves many smaller markets by working with over 200 shortline (short regional transportation) partners. BNSF also has an agreement with CSX (CSX), Kansas City Southern (KSU), and Canadian National Railway Company which expands the marketing reach for all 4 companies and their customers.
Trends and Forces
BNI Delivers Low Cost Coal
Contents
1 Business Overview
2 Trends and Forces
2.1 BNI Delivers Low Cost Coal
2.2 Increased demand for Grains and Bio-Fuels
3 Competition
4 References
Demand for coal will play an important role in BNI's growth prospects, as coal accounts for 20% of its revenues. The company mostly transports coal from the Powder River Basin (PRB) of Montana/Wyoming to coal-fired utilities and industrial users. In 2006, PRB coal averaged $1.31/Million British Thermal Units (MMBtu) delivered – easily the lowest priced American coal and substantially below natural gas delivered costs of $5.00/MMBtu or more. Last year, Burlington delivered over 55% of PRB coal. Much of BNI’s coal business is based on legacy contracts that will see significant price adjustments upwards to current market rates. It is estimated that 60% of BNI’s coal contracts will be renegotiated in the next 5 years to BNI’s benefit.
Increased demand for Grains and Bio-Fuels
Agricultural products account for some 16% of BNSF revenues. Growing global food and ethanol demand has resulted in increased production of corn, soybean, wheat, and a whole host of other agricultural commodities. BNSF's rail network is well positioned to serve the grain-producing regions of the Midwest and Great Plains. This could boost this segment's freight revenue.
Competition
BNI's main competition comes from other railroads and the long-haul trucking industry. Union Pacific (UNP) is the primary railroad competitor. Many of their tracks run parallel and they service many of the same ports. UNP is the larger of the two companies and is the only railroad that services all six gateways to Mexico. However, BNI has better operational efficiency, as measured by it average operating ratio (operating expenses/operating revenue) - BNSF's average operating ratio over the past five years is about 4% lower than UNP's. In response, UNP created the Unified Plan in 2005-2006 to lower their operating ratio. It is designed to increase speed, efficiency, and improve asset utilization by changing their transportation system. The plan is new, but its impact could be noticeable over the next few years.
It was formed December 31, 1996, as the Burlington Northern and Santa Fe Railway when the Atchison, Topeka and Santa Fe Railway was merged into the Burlington Northern Railroad. In 1999 BNSF and the Canadian National Railway announced their intention to merge and form a new corporation entitled the North American Railways to be headquartered in Montreal, Canada. The United States' Surface Transportation Board (STB) placed a 15-month moratorium on all rail mergers, which ended this merger. On January 24, 2005, the railroad's name was officially changed to BNSF Railway.[2]
The BNSF Railway is a wholly owned subsidiary of the Burlington Northern Santa Fe Corporation, the holding company formed by the September 22, 1995, merger of Burlington Northern, Incorporated, and the Santa Fe Pacific Corporation. According to corporate press releases, the BNSF Railway is among the top transporters of intermodal freight in North America. It also hauls enough coal to generate roughly 10% of the electricity produced in the United States. The company's three transcontinental routes provide a high-speed link between the western and eastern United States.
On November 3, 2009, Warren Buffett's Berkshire Hathaway announced that it would acquire the remaining 77.4% of BNSF that it didn't already own for $100 per share in cash and stock - a deal valued at $44 billion. The company is investing an estimated $34 billion in BNSF and acquiring $10 billion in debt.[3][4][5][6][7] On February 12, 2010, shareholders of Burlington Northern Santa Fe Corporation voted in favor of the acquisition
In 2009, BNI was acquired by Berkshire Hathaway (BRK).[1]
Burlington Northern Santa Fe (NYSE: BNI) is the second-largest U.S. railroad company with over 6,300 locomotives and 32,000 route miles. The company ships freight, such as coal and agricultural products, throughout the western two thirds of the United States.
In recent years, Burlington has benefited from rising demand for coal energy in the US. Increasing volumes of imports from China have also increased demand for BNI services. Most imports enter the U.S. through California and have to be shipped through out the U.S. by railroad companies like Burlington.
Business Overview
BNSF primarily serves the Midwestern, Western, and Southern regions and ports of the US. BNSF transports coal and a range of consumer, industrial, and agricultural products.
The following map shows BNSF's primary routes and trackage rights - which allow BNSF to access major cities and ports in the western and southern United States as well as Canadian and Mexican traffic. BNSF also serves many smaller markets by working with over 200 shortline (short regional transportation) partners. BNSF also has an agreement with CSX (CSX), Kansas City Southern (KSU), and Canadian National Railway Company which expands the marketing reach for all 4 companies and their customers.
Trends and Forces
BNI Delivers Low Cost Coal
Contents
1 Business Overview
2 Trends and Forces
2.1 BNI Delivers Low Cost Coal
2.2 Increased demand for Grains and Bio-Fuels
3 Competition
4 References
Demand for coal will play an important role in BNI's growth prospects, as coal accounts for 20% of its revenues. The company mostly transports coal from the Powder River Basin (PRB) of Montana/Wyoming to coal-fired utilities and industrial users. In 2006, PRB coal averaged $1.31/Million British Thermal Units (MMBtu) delivered – easily the lowest priced American coal and substantially below natural gas delivered costs of $5.00/MMBtu or more. Last year, Burlington delivered over 55% of PRB coal. Much of BNI’s coal business is based on legacy contracts that will see significant price adjustments upwards to current market rates. It is estimated that 60% of BNI’s coal contracts will be renegotiated in the next 5 years to BNI’s benefit.
Increased demand for Grains and Bio-Fuels
Agricultural products account for some 16% of BNSF revenues. Growing global food and ethanol demand has resulted in increased production of corn, soybean, wheat, and a whole host of other agricultural commodities. BNSF's rail network is well positioned to serve the grain-producing regions of the Midwest and Great Plains. This could boost this segment's freight revenue.
Competition
BNI's main competition comes from other railroads and the long-haul trucking industry. Union Pacific (UNP) is the primary railroad competitor. Many of their tracks run parallel and they service many of the same ports. UNP is the larger of the two companies and is the only railroad that services all six gateways to Mexico. However, BNI has better operational efficiency, as measured by it average operating ratio (operating expenses/operating revenue) - BNSF's average operating ratio over the past five years is about 4% lower than UNP's. In response, UNP created the Unified Plan in 2005-2006 to lower their operating ratio. It is designed to increase speed, efficiency, and improve asset utilization by changing their transportation system. The plan is new, but its impact could be noticeable over the next few years.
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