Rail – The Intermodal Connection
Drew Glassman, AVP Intermodal Marketing
CSX Transportation
1
Holistic focus on controlling supply chain costs
 Near-sourcing of manufacturing sites due to rising
costs in Asia
 Simplification and rebalancing of supply chain network
design
 Optimization software to improve efficiencies and
streamline processes
 Use of alternate transportation modes, including
intermodal
2
Truck capacity is imminent concern for future
Truck Capacity Utilization to Increase,
Resulting in a Shortage

Driver shortages are a threat
with economic recovery
—
—

Driver supply impacted by
many macro-factors
—
2012
—
—
Surplus/(Shortage)
Source: FTR
3
Capacity Utilization
U.S. Bureau of Labor Statistics
reports driver supply is 185,000
below 2007 levels
Turnover for Q1 2012 was 90%,
the highest since 2008
CSA, HOS and other proposed
regulations
Aging driver base
Recovery of housing market
Intermodal provides scalable capacity

Coast-to-coast intermodal
network with global reach
—
—
—
You Can Go Here
with Intermodal

Access to a large, growing
container fleet
—

Rail and carrier-owned assets
Intermodal scales to meet
supply chain needs efficiently
—
4
14 million loads moved in 2011
Access to key markets,
population centers
Connectivity to major U.S. ports
One train can move the load of
280 trucks
Intermodal industry volume has steadily grown
U.S. Intermodal Volume
Units in Millions
Volume has increased more than four-fold
14.1M
3.1M
1980
1985
1990
Source: Intermodal Association of North America
5
1995
2000
2005
2010
Intermodal offers sustainable savings
 Fuel efficiency and freight density drive cost savings
— Railroads are three times more fuel efficient than trucks
— One train can move the load of 280 trucks
 Higher fuel efficiency means lower greenhouse
emissions
— Intermodal reduces carbon footprint
— Moving freight by rail, instead of truck, reduces emissions by 75%
If 10% of long haul highway freight converted to rail…
Annual fuel consumption would decrease by 12 billion gallons, and
Annual greenhouse emissions would decrease by 12 million tons
Source: AAR
6
Intermodal conversion opportunity is substantial
Eastern Freight Market
(units in millions)
5.5
9.3
 Highway-to-rail conversion still
in early stages
 Over 9 million loads in east
have conversion potential
 Intermodal conversion results
in additional capacity and cost
savings for shippers
Intermodal
Opportunity
Freight length of haul > 550 miles
Sources: AAR CS-54 and Global Insight’s Transearch data
7
Shippers achieve the value of intermodal with CSX
Company Overview

America’s first railroad
Intermodal at CSX

— Founded 1827, headquartered in
Jacksonville, FL

Largest rail network in east
— Hub and spoke design provides
unique service capabilities

— 21,000 route miles in 23 states,
serving 70 ports

Significant resources
Ranked 226 on Fortune 500
— $11.7 billion of revenue in 2011
8
Aggressive capital investment
— Terminal and infrastructure
development, public-private projects

— Over 4,000 locomotives, 80,000
freight cars, 30,000 employees

Far-reaching, dynamic network
Customer and service focus
— Minimizing variability in service, while
meeting customer needs

Highway-to-rail “H2R” strategy
— Conversion of over-the-road loads
The National Gateway is evolving the rail network

Public-private investment of
$850 million
—
—

Increases efficiency and reach
of U.S. rail network
—
—

9
State, Federal, and CSX funded
Support of 300+ public and private
organizations and individuals
Links Mid-Atlantic ports with
Midwestern markets
61 clearance projects and 6
intermodal terminals, including
Northwest Ohio
Clearance projects are ~50%
complete to date
Northwest Ohio Hub creates a more efficient network
Bypass high traffic areas resulting in
faster transit times
Non-stop service to east and west
coasts for more reliable service
New lanes increase access to major
population centers
Effective connector, with 99% scheduled
connectivity at NWOH
Chicago run-through for Western interchange
Hub and spoke network is a strategic differentiator
10
CSX focused on highway-to-rail (H2R) strategy
Network
Design



NWOH –
Hub &
Spoke
New
England
Florida
Service
Reliability


Meeting
customer
commitments
Minimizing
variability in
the service
product
Channel
Strategy




IMC
Brokers
Ocean
carriers
Truck
BCO
Education


11
Dedicated
National
Accounts
Team
H2R
Optimizer
Highway-to-rail continues to drive industry growth
 Intermodal offers a transportation alternative with
scalable capacity and sustainable savings advantages
 The value of intermodal rail only beginning to be realized;
great potential remains
 CSX dedicated to understanding transportation needs
and developing intermodal solutions
12
Appendix
14
Public-private investments continue to grow network
Investment in the Rail Network
$ 35M
$ 70M
$ 37M
$ 4M
$ 44M
$ 1M
$ 46M
$ 73M
$ 2M
$ 2M
$ 53M
$ 1M
$ 74M
$515M
$ 10M *D.C
$117M
$ 66M
$385M
$ 90M
$ 8M
$ 84M
$ 70M
$ 70M
$ 30M
$ 5M
Terminal Expansions
New Terminals
$105M
$165M
CSX Investment in Rail Network (2011)
Private-Public Investment Rail –Served Facilities (2011)
15

CSX also investing in new
terminals and infrastructure
throughout network

Clearance projects enable
double-stack capable network
.
$ 71M
$ 2M
$ 50M
$ 1M
$ 1M
In 2011, businesses and
state and local agencies
invested over $1.3B
$ 67M
$ 3M
$ 94M
$ 10M
$250M
$ 44M

— New England
— National Gateway