(The following article by Katherine Yung was posted on the Dallas Morning News website on April 7.)
DALLAS — Burlington Northern Santa Fe Corp. plans to become the first U.S. railroad to open an office in mainland China.
The Shanghai office, opening this month, symbolizes the growing importance of Chinese exports to freight railroads such as Burlington Northern, which is experiencing unprecedented demand thanks to the surge in trade.
“We think 60 to 70 percent of goods coming in from Asia is coming from China,” said Stephen Branscum, group vice president of consumer products at Fort Worth-based Burlington Northern.
The Shanghai office is expected to help Burlington Northern, the nation’s No. 2 freight railroad, stay in closer contact with its customers, the foreign-owned shipping companies. The railroad currently operates only one office in the region – in Tokyo.
Burlington Northern plans to appoint Michelle Liu to be its China representative, Mr. Branscum said. Ms. Liu speaks Mandarin and has been working out of the railroad’s headquarters for a little more than a year.
“She’s going to be there as a conduit of information as to what BNSF is doing,” he said. “In a lot of ways, I think she’s going to help streamline [traffic] flows.”
Canadians
Burlington Northern won’t be the first foreign railroad to set up an office in China. The two major Canadian railroads already have a presence there.
Canadian National Railway Co. opened one-person offices in Shanghai and Beijing in October 2004 to try to increase shipments between China and North America, said a spokesman for the Montreal-based railroad.
And Canadian Pacific Railway, based in Calgary, was the first foreign railroad to set up an office in China nine years ago. It has three employees at its Beijing office and has invested in a logistics firm in northwest China.
Next step
For Burlington Northern, the opening of an office in China marks another step in the strengthening of its ties with the world’s most populous country.
On Tuesday, the railroad will host a supply chain summit in Shanghai for shipping companies and their brokers and exporters. About 400 people are expected to attend.
Nearly two years ago, Burlington Northern signed a five-year Memorandum of Understanding for Cooperation in Rail Transport with China’s Ministry of Railways.
Under the agreement, both sides pledged to exchange information on their best practices in railway management, operations, logistics and technology.
Since then, several Chinese delegations have visited Burlington Northern’s headquarters and facilities.
As a result, China is now planning to build a network of 18 mega-intermodal terminals modeled after the railroad’s huge logistics parks in Chicago and at Alliance Texas in Fort Worth.
For now, Mr. Branscum said, Burlington Northern has no plans to invest in a Chinese railroad even though the Asian giant is planning to spend $155 billion over the next 10 years to upgrade its rail systems.
Burlington Northern’s hands are full just keeping up with demand at home. Business is so strong in the U.S. that the railroad is focused on expanding its rail network and improving train speeds to handle the flood of imports from China arriving daily at West Coast ports.