Intermodal Team
Joe Leppert
Business Dimensions
Intermodal - 2001 Revenue $1.9 Billion
Revenue
Premium
CSXI
6%
8%
Pacer
28%
International 51%
IMC /
Truckload
24%
Steamship
34%
Domestic 49%
Organizational Structure
Intermodal
Commercial
Network
Design
Finance
Operations
Revenue and Contribution
Intermodal
Contribution CAGR = 13%
Revenue CAGR = 4%
1999
1999
1999
2000
2000
2000
Total Revenue
2001
2001
2001
Total Contribution
2002
2002
2002
Business Drivers
Intermodal
Market
– Strong International Trade
– Domestic Economic Growth
Price
– Premium Products
– Capture Asset Value
Penetration
– New Chicago Facility
– Premium & Domestic
– Major Growth Lanes
Business Development Initiatives
Intermodal
• Strategic Partnerships
• Mexico Market
• Market Research Initiatives
– Lane Balance Opportunities
– Non-Seasonal Baseload Customers
– Non-Peak Vs. Peak
• Growth in Major Lanes
Major Growth Lanes
Market Size
($ Billions)
Cost Advantage
vs. Truck
Major Lanes
L.A. to Memphis
L.A. to New Orleans
Oakland to Chicago
Chicago to Portland
Chicago to L.A.
Chicago to Mexico
$0
$1.5
0%
50%
Major Lanes
Intermodal
Portland
Portland
Chicago
Oakland
Memphis
Los
Angeles
Dallas
New Orleans
Houston
Mexico
Margin Improvement Target
Intermodal
(%)
100
+60% from
Productivity
& Asset
Utilization
75
50
+40% from
Revenue
Growth
25
0
Price
Volume
& Mix
Double
Stack
Drivers
Train
Length
HP/TT
Other
Intermodal Team
John Newman
Contribution
Intermodal
%
7
5
nt
e
m
e
v
ro
p
m
I
in
g
r
Volume
a
M
Productivity
Price
Productivity
Volume
2000
Price
2001
2002
L.A. to Houston/New Orleans
Intermodal
Margin Improvement
• Day-of-Week
Rationalization
+82%
• Price Improvement
• Double Stack
Efficiency
2000
2001
• Network Redesign
2002
So. Calif
New Orleans
Houston
Lane Contribution
Intermodal
Lane by Lane
Analysis
Lane Contribution
Intermodal
Trains by Lane
Detail
Lane Contribution
Intermodal
Day-of-Week
Demand
Lane Contribution
Intermodal
Customer
Detail
Scorecard - L.A. to Houston/New Orleans
2002 versus 2001
Lane Evaluation
Traffic (% of Lane)
Domestic
International
+4%
+5%
+1%
31%
69%
Operating Statistics
Train Starts
Loads Per Train
Double Stack Percent
Horsepower/Trailing Ton
Train Length
+3%
+7%
+9%
-7%
+2%
Margin Improvement
Revenue
Units
Revenue
Revenue Per Car
Avg. Revenue / Car
Costs
- Decrease / + Increase
Volume
Fuel Price
Wage Inflation
Others
Productivity &
Asset Utilization
Description
Change in Contribution
Unfavorable Favorable
C-Rate
Slot Utilization
Double Stack
Horsepower/TT
Train Length
Others
+ 21%
Profitability Management
Intermodal
• Lane Organizational Structure
• Tactical Working Team
• Quarterly Lane Reviews
• Monthly Business Team Reviews
• Quarterly Senior Management Reviews
Intermodal Team
Barry Michaels
Operating Initiatives
Intermodal
Line-of-Road
– Train Frequency
– Train Size
– Slot & Stack Utilization
– Horsepower per Trailing Ton
Terminal
– Lift Productivity
– Dwell Time
– Gate Processing
Productivity / Efficiency Measures
Intermodal
Train Length
Feet
5,500
• Operational Drivers
5,000
• Network Redesign
– Day of Week Volume
4,500
– Customer Commitment
Rationalization
4,000
– Business Rules Annulments/Consolidations
3,500
3,000
1999
2000
2001
2002
Productivity / Efficiency Measures
Intermodal
Double Stack Percent
+13%
89%
• Operational Drivers
• Terminal Management
79%
– Asset Utilization
• Containerization
• Car Type
1999
2002
Productivity / Efficiency Measures
Intermodal
Lifts Per Unit
1.75
Operational Drivers
– On-Dock Operations
1.70
– Interchange Partners
1.65
1.60
1999
2000
2001
2002
Productivity / Efficiency Measures
Intermodal
Terminal Dwell
Days
2.77
-14%
Operational Drivers
2.37
– Customer - Data Sharing
– Assessorial Collection
– Reduced Free Time
– Increased Storage Rates
1999
2002
L.A. to Dallas/Memphis
Intermodal
Margin Improvement
+64%
• Differentiated Product
• Interchange Partnerships
• Line-of-Road Productivity
2000
2001
2002
So. Calif
Dallas
Memphis
Scorecard - L.A. to Dallas/Memphis
2002 versus 2001
Lane Evaluation
Units
+24%
Revenue
Revenue Per Car
+20%
-3%
Traffic (% of Lane)
Domestic
International
35%
65%
Margin Improvement
Revenue
- Decrease / + Increase
Avg. Revenue / Car
Costs
Description
Change in Contribution
Unfavorable Favorable
Volume
Fuel Price
Wage Inflation
Others
Operating Statistics
Train Starts
Loads Per Train
Double Stack Percent
Horsepower/Trailing Ton
Train Length
+12%
+11%
+4%
-3%
+11%
Productivity &
Asset Utilization
C-Rate
Slot Utilization
Double Stack
Horsepower/TT
Train Length
Others
+ 13%
Future Margin Initiatives
Intermodal
• Increase Train Length
• Reduce Terminal Gate Processing Time
• Reduce Lifts per Unit Handled
• Price Improvement
• Truck-Like Fuel Price Recovery
Revenue Growth Potential
Intermodal
Ag Products
Autos
Chemicals
Energy
Intermodal
TOTAL
GDP
Industrial Products
0% 1% 2% 3% 4% 5% 6% 7%
Union Pacific