Strategic Training and Competitive Advantage

Running head: BNSF SWOT AND BUSINESS STRATEGY Page | 1

BNSF SWOT AND BUSINESS STRATEGY Page | 1

SWOT Table

Internal: Weaknesses

1. BNSF has a debt burden as the railway is privately owned (Team, 2020).

2. BNSF also has a relatively low global presence (Team, 2020).

3. Finding ways to become 100% safety free environment.

4. Employee morale, communication between leadership and workers.

Internal: Strengths

1. BNSF has a diverse portfolio of business with 50,000 plus km of railways (Team, 2020).

2. BNSF has a robust revenue stream and profitability (Team, 2020).

3. Large skilled labor pools (Team, 2020).

4. BNSF also has strong parent company backing means with financial stability (Team, 2020).

External: Threats

1. BNSF has intense competition (specifically with Union Pacific).

2. Rising fuel prices.

3. BNSF currently is having international hardship with the tariffs debate.

4. External environment changes: government, taxes, etc. (Team, 2020).

External: Opportunities

1. BNSF is a growing North American market.

2. Scope in the global market (Team, 2020).

3. Intermodal dept. was growing faster than other services as the economy was booming (before COVID).

4. BNSF is trying to merge with another railway on the East coast to broaden territory.

SWOT and Business Strategy

BNSF can maximize the strengths of the opportunities by continually expanding and improving and meeting customer service needs. BNSF is a leading freight infrastructure that affects the economy and has a value of both the public and private investors in freight-rail capacity (Mangum, 2019). It has the potential to improve private-sector comprehension of potential freight- rail and create opportunities for expanding the infrastructure by identifying efficiencies and weaknesses in the transportation of goods across the United States. Also, when the economy is doing well with transporting goods, it opens thousands of jobs all across the U.S., allowing for less unemployment strain. Below is a map of BNSF railway track rights.

BNSF has threats, but it can certainly use its strengths to help minimize them. An example would be even though Union Pacific is a threat, the BNSF and UP share individual sections of track to connect to other railway lines. In the map above, the red lines represent Union Pacific private lines. For BNSF to travel to specific destinations in a promised deadline, BNSF has to work with UP and have an agreement to cross their tracks. The UP also relies on BNSF for connecting to their destinations as well (it is a shared agreement). Since each railway has the first right to using their lines, BNSF has to wait on the UP and vice versa.

BNSF has a weakness of having a debt burden since it is privately owned, therefore, using the opportunity of the railway expanding in the North American market it will eventually take off some of the financial burdens. Although BNSF has a low global presence, it has drastically risen in the market since 2014. Various countries’ governments across the world want to invest in the expansion of their railroads. Many travelers come from other countries depending on the railways to travel to a local destination, such as in the Asia Pacific and European countries thanks to their cheap fares (Global Industry Report 2018-2025, (n.d.). As for becoming a 100% safety free within BNSF, there are safety briefings for every change of shift before employees go out to work; this applies to every craft in BNSF. Every day of the year, an injury or accident happens on the railways (not only BNSF). To do our part in the intermodal team, our supervisor finds accidents or injuries on the circuit that can relate to our job and talk about what happened. I believe it helps to talk about it as a group and make known what could have been done to prevent the incident.

Minimizing weaknesses to avoid threats can be a significant feat to accomplish, but it can be done. If the BNSF reduced the debts it carries from being privately owned, it could help with the cost of rising gas prices. Another option is to barter or trade with other companies in turn for reduced transportation services. If bad communication with workers can be improved, it could help with a small section of competing with the UP. I have personally known coworkers who have left BNSF because of the environment and got hired right away by the UP. Keeping employees satisfied and being appreciated for their work would help reduce the cost of losing employees. It would benefit from spending an excessive amount on training and prevent employees from going to the competitors.

I would summarize BNSF as a focused differentiator. A perfect example is in my department of intermodal shipping domestically. BNSF offers businesses such as UPS (United Parcel Services), FedEx, and Amazon discounted rates. In 2014 when I was hired on UPS was shipping through the BNSF railway; later that year, UPS left because their promised delivery times were not being met. Intermodal wasn’t BNSFs big moneymaker at the time; it was more so crude oil and agriculture. When intermodal trains were being put on the side rails to let other trains pass, it causes more time and money for UPS than they could have done by shipping via truck. As a result, customers would not get their packages on time from UPS and affecting their credibility. When UPS left FedEx soon followed, UPS got discounted rates since they shipped a majority of the intermodal containers, and they were promised faster delivery times. All other companies liked to piggyback off of what we call high priority trains. J.B. Hunt is a major company using rail transport, Schneider, Roadway, FedEx, and, most recently, Amazon. BNSF gains a lot of business by having these offers. If BNSF does not hold to their agreement, the intermodal department will surely lose UPS as a customer again.

Resources

Mangum, A. (2019, February 06). Maximizing the Freight Economy. Retrieved August 02, 2020, from https://www.esri.com/about/newsroom/arcuser/maximizing-the-freight-economy/

Railroads Market Size, Share, Trend: Global Industry Report 2018-2025. (n.d.). Retrieved August 03, 2020, from https://www.grandviewresearch.com/industry-analysis/railroads-market

Team, M. (2020, April 12). BNSF Railway SWOT Analysis: Top BNSF Railway Competitors, STP & USP: Detailed SWOT Analysis of Brands. Retrieved August 01, 2020, from https://www.mbaskool.com/brandguide/transport-and-logistics/13083-bnsf-railway.html