BNSF Logistics
Springdale, Arkansas USA
December 1, 2004
By
Evan Armstrong

Key Personnel:
Eric Wolfe, Vice President & General Manager
Andy Cordischi, Director of Technology & Engineering
Lynda Norris, Director of Business Development
Mica Jordon, Director of TES
Robert Sutton, Director of Supply Chain Services
Todd Hoyt, Director of Marketing

Founded in 2002, rapidly growing BNSF Logistics is on track to generate $190 million in revenue by the end of 2005, according to its Vice President & General Manager Eric Wolfe. Acquisitions make up a large chunk of Wolfe’s plan, but organic growth will contribute to half of the expansion. BNSF Logistics has four successful acquisitions under its belt (it acquired parts in Clicklogistics in 2002, MRS Companies in 2003, and Sumark Services and RiteChoice in 2004) and is looking to make additional acquisitions in 2005 to help drive scale and increase its breadth of services.
Much of BNSF’s organic growth comes from its ability to manage rail in addition to intermodal and truck transportation. This multi-modal competency coupled with value-added services and strong information technology provides BNSF Logistics with a competitive advantage awarding it entree into large accounts with rail and truck transportation needs. Value-added services include: cross-docking, transloading, expedited truck/rail service, pool distribution, and supply chain network analysis and re-design. Frito Lay, Wal-Mart de Mexico, U.S. Borax, and the Home Depot are current BNSF Logistics customers.
For Frito Lay, BNSF Logistics is managing intermodal moves of bulk potatoes. This service involves loading TOFC refrigerated trailers near the border of Minnesota and providing intermodal rail transportation to Chicago. The trailers are offloaded in Chicago and travel by highway to the processing plant in Frankfort, IN.

BNSF Logistics provides a different rail/truck service for Wal-Mart de Mexico in addition to providing trucking capacity into Wal-Mart’s Laredo DC. Rail boxcar movements of dry dog food are made from Texas to Mexico City and other major destinations where they are transloaded to trucks for delivery throughout Mexico. BNSF controls these movements from origin to destination.

The U.S. Borax operation manages outbound rail and truck transportation from Borax’s facility in Boron, CA and outbound bulk rail moves from its facility in Wilmington, CA to the port of Long Beach. As a value-added service, BNSF is also managing U.S. Borax’s fleet of 750 covered hopper railcars.

For the Home Depot, BNSF Logistics is managing intermodal and truck transportation of ceramic products to Home Depot international distribution centers strategically located in the U.S. In addition, BNSF delivers truck capacity to Home Depot for seasonal surge movements of lawn mowers and other products. Home Depot uses BNSF Logistics to deliver store racks and other fixtures requiring flatbed service.

To support the operations, BNSF Logistics has deployed version 6.1.5 of i2’s transportation management software suite. i2’s “Transportation Manager” is being used to support the transportation management operations of three major accounts. It’s primarily function is to consolidate less-than-truckload (LTL) shipments into rail, intermodal, and truckload shipments. It then automatically tenders loads to carriers and provides supply chain visibility. i2 has been integrated with BNSF Logistics proprietary operations system to share information with BNSF Logistics’ Transportation Execution Services group (TES).
TES is the operational backbone for BNSF Logistics and performs multi-modal transportation management, freight brokerage, value-added transportation services, and transportation exception handling services. TES incorporates the acquired operations of the various acquisitions and operates out of 15 U.S. offices. According to Wolfe, it will account for approximately 95% of BNSF Logistics revenues in 2004.

Managing BNSF Logistics rapidly expanding operations is a strong operations team. Wolfe assembled most of the team while at J.B. Hunt Logistics and Cardinal Logistics. This close knit group is long on logistics operating and engineering experience. Key people have been added through acquisitions and from the railway further strengthening the organization.

Wolfe and his team have generated strong revenues and solid margins over the past two years. Under their management, we expect BNSF Logistics to stay on track and become a top North American 3PL.

Sources: A&A Primary Research, http://www.bnsflogistics.com/