SOURCE: BNSF Railway Company

BNSF Railway Company

February 26, 2009 20:50 ET

BNSF Disputes Report Issued by Montana Attorney General's Office: Distortion of Facts Based on Out-dated Data

FORT WORTH, TX--(Marketwire - February 26, 2009) - BNSF Railway Company strongly disagrees with the Montana Attorney General's report released today regarding rail transportation.

"Contrary to this report, BNSF is doing great things for Montana producers and is providing best-of-class service at reasonable rates, which enhances Montana producers' ability to compete in world markets," said Kevin Kaufman, group vice president, Agricultural Products. "This report is wrong and inaccurately portrays BNSF rates and service."

Over the past several years, BNSF has been meeting with Montana producers on a regular basis to discuss and resolve rate, service, fuel surcharge and other issues. In addition, BNSF placed an ombudsman in Montana, developed an Ag Rail Business Council, and most recently signed a mediation and arbitration rate dispute agreement with the Montana Grain Growers Association (MGGA) and the Montana Farm Bureau Federation.

"BNSF's relationship with producers is getting better all the time and we're proud of that," Kaufman said. "We wholeheartedly stand by our rates. This is why we have entered into a voluntary arbitration and mediation process that will hold us accountable and bring transparency to the process. If Montana shippers are being charged excessive freight rates for substandard service why would we subject ourselves to this process?"

BNSF believes this study paints a distorted view of BNSF's rail rates by using old 2006 data that is misleading. BNSF tariff rates for Montana have not materially increased since 2005; however, its costs have. Therefore, revenue-to-variable cost ratios reported in this study are obviously inflated.

The study also claims that BNSF's service for Montana shippers is "substandard." BNSF couldn't disagree more.

"You will be hard-pressed to find a Montana shipper who says that our service is substandard," Kaufman said. "The facts are that by any measure, service to Montana shippers has steadily improved since 2005 and has never been better than what it is today. For the past three years, harvest past due orders for rail cars have been virtually nil and readily available."

The study also claims that BNSF has used pricing to encourage 110-car trains (shuttles), forcing many smaller elevators to go out of business. The fact is that the majority of shipments out of Montana are non-shuttle shipments and that we supply more non-shuttle cars than shuttle cars to our non-shuttle customers. Additionally, rates for single-car shipments are cheaper on a revenue-to-variable-cost basis than shuttle rates.

BNSF's commitment to working with Montana producers has led to industry leading changes. For example, in 2006, BNSF changed its fuel surcharge program from a percent of transportation rate to a mileage-based program to be responsive to Montana shipper concerns.

"We couldn't be more honored and pleased that Montana producers have chosen to work with BNSF to create an environment of good will that focuses on market development and a more efficient process to get Montana producer products to market," Kaufman said. "We are also pleased that our efforts actually add value to Montana producers instead of potentially costing them $3 million in research."

About BNSF

A subsidiary of Burlington Northern Santa Fe Corporation (NYSE: BNI), BNSF Railway Company operates one of the largest North American rail networks, with about 32,000 route miles in 28 states and two Canadian provinces. BNSF employs about 2,000 Montanans with a payroll of $120 million.

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