Burlington Northern Santa Fe (BNSF) Railway last night announced major changes to its marketing and business development structure as John Lanigan, who has run BNSF's sales, marketing, and business development for a decade, announced his retirement. He will be succeeded by Steve Bobb, currently in charge of the commercial functions of the railroad's coal business group.
Lanigan will retire on Jan. 15, leaving almost 10 years to the day that he joined Fort Worth, Texas-based BNSF.
Lanigan joined BNSF after the company he ran, Logistics.com, was acquired by Manhattan Associates. He was arguably the railroad's most important non-operations executive, heading its sales, marketing, customer service, economic development, and business unit activities.
Lanigan's tenure at BNSF has been marked by a rail industry resurgence that effectively began in 2004 and continues to this day. Carl Ice, BNSF's president and chief operating officer, said in a statement that BNSF's annual revenue more than doubled during Lanigan's tenure, with the company on track to hit $20 billion in 2012. "[Lanigan has been] instrumental in helping grow BNSF into the leading transportation company we see today," Ice said.
But the highlight of his time there was the 2009 takeover of BNSF by Berkshire Hathaway Inc., the conglomerate controlled by billionaire Warren E. Buffett. Berkshire spent $26 billion to buy the 78 percent of BNSF it that didn't already own. The purchase, which took the railroad private, was the biggest deal in Berkshire's history and one of the most important transactions of the past 10 years.
In an interview with DC Velocity earlier this year for the annual July "Rainmakers" issue, Lanigan said the railroad hasn't changed its way of doing business since going private. He added that none of BNSF's four main operating units would in 2013 return to the peak traffic levels of 2005–2006 because of the slow and protracted U.S. economic recovery.
In the interview, Lanigan said the rail industry's biggest challenge will be synchronizing data flows between all the nodes of increasingly globalized and complex supply chains. "In a growing global economy, the use of multiple transportation modes has become the norm. When you think about how many touch points there can be on a single shipment, one miscue can result in an unsatisfied customer," he said.
CHANGES IN THE COAL BUSINESS
Lanigan's replacement, Bobb, will leave his current job at BNSF's coal business group as the rail industry struggles through its most difficult period for coal transportation in decades. Slowing macro demand, unseasonably warm winter weather, and increased competition from low-cost natural gas have hammered coal volumes at all the railroads. In spite of these trends, coal still remains by far the industry's biggest commodity in terms of carloadings.
Through the end of October, coal carloadings were down 10.2 percent from the same period a year ago, according to data released yesterday by the trade group the Association of American Railroads. (AAR). In the week ending Oct. 27, coal loadings were down 15.2 percent from the year-earlier period, AAR said.
Bobb, in turn, will be replaced by Steve Branscum, who as head of BNSF's consumer products division has run the commercial activities of the intermodal and automotive businesses. Branscum, who has held his current post since 1999, will be succeeded by Katie Farmer, who has been vice president, domestic intermodal, since 2010.
Branscum will tackle the tough coal business after riding the railroad's strong growth in intermodal volumes, as we as a recovery in the auto industry that benefits car-haulers like BNSF.
Branscum has been a key player in BNSF's aggressive push to convert millions of truckloads moving west of the Mississippi to intermodal. Like other railroads, BNSF is trying to sell the marketplace on the benefits of intermodal transportation over truckload services. BNSF argues that intermodal is less costly and more fuel-efficient than truckload even for relatively shorter hauls. "We have an opportunity, and the opportunity is huge," Branscum told DC Velocity in an interview last June.