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2/25/2003



Rail News: Rail Industry Trends

BNSF LOGs more than $250 million in revenue from guaranteed empty-equipment program



Since launching its Loading Origin Guarantees (LOGs) program in 1999, Burlington Northern Santa Fe has pre-sold more than 100,000 cars representing more than $250 million in revenue and increased the program's customer base from 15 to 48.


LOGs enables shippers to secure blocks of BNSF-controlled empty equipment in advance through a blind auction on the railroad's Web site; BNSF then guarantees it'll supply equipment in a specified timeframe, ranging from four to 26 weeks.


"The program was implemented following a customer-satisfaction survey, where customers expressed concern regarding equipment availability and demand," said Denis Smith, BNSF vice president of marketing, industrial products, in a prepared statement, adding that LOGs has enabled BNSF and its customers to plan shipments more efficiently.


The railroad is meeting equipment demand more than 99.9 percent of the time because of operational weaks and advance traffic-flow forecasts.


Currently, BNSF offers LOGs to metal, pulp-board, perishable and steel-product shippers, and requires a five-car-per-week minimum. The railroad plans to expand LOGs to other commodities and equipment types.


The program has enabled Idaho Veneer Co. to smooth its pulp-board shipping process and better manage its inventory, said Sales Manager Rick Palmiter.


"In the lumber business, we have tight shipping schedules that are critical to meet customer demand [and] this option has given us a standardized way to be sure we can keep up with those demands," he said.


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