1 Dean Hurst Market Manager Discussion Topics Norfolk Southern Overview Components to Growth Service Innovation Investment Market Outlook Questions 2 Norfolk Southern Overview 3 Intermodal Market ID: 670653
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Slide1
Intermodal Report from Norfolk Southern
1
Dean Hurst
Market ManagerSlide2
Discussion Topics
Norfolk Southern Overview Components to GrowthService, Innovation, InvestmentMarket OutlookQuestions?
2Slide3
Norfolk Southern Overview
3Slide4
Intermodal Market
First half 2016 vs. 2015
0% (71%) 15%
(1%) (74%) 4%Units (000’s) & Y-o-Y Percent Change
Units (000’s) & Y-o-Y Percent Change
Second Quarter: Volume down (5%)
Increased truck capacity and weaker import/export conditions impacted volume
First Quarter: Volume flat
Strong International growth offset the negative volume impact of the TCS restructuring
Units (000’s) & Y-o-Y Percent Change
4Slide5
How does IM continue to grow?
5Slide6
NS Intermodal Volume Growth: 2010
– 2015
Intermodal Volume: 2010-2015
Business Segments: 2015
International35%
Domestic
65%Compound Annual Growth Rates (CAGR): 2010-2015
2.0%
US GDP
4.0%
US Intermodal
5.7%
NS Intermodal
6Slide7
#1: Reliable, Consistent Service
7Slide8
US Major Railroads Intermodal Train Speeds
Last 8 months8Slide9
#2 Innovation
Dynamic Estimated Time of Grounding (DETG)Optimized Terminal Control System ( ) Equipment InventoryLoad Plan OptimizationGate Operations
Yard Management
9Slide10
Metrics
10
Average in app rating: 4.1
Adoption: 9% network wideBenefits:Gate processing time: 51% reduction
Queue processing time: 33% reductionDriver dwell: 22% reductionSlide11
Improving Adoption
11
ExpressNS enhancements focused on driver
adoption
B2B
implementation
mid
September
2016
ExpressNS Only lanes across the network
Accurate
shipment inventory locations
Paperless gates
Intermodal ExpressNS Adoption Task
Force
ExpressNS
RoadshowSlide12
#2: Innovation continued…
12Slide13
#3: Investment in the Future
13Intermodal is largely in “return on investment” mode following an historic era of
CapEx spending to expand routes, markets, and customer base. These major investments, coupled with current productivity initiatives and reliably high service, position NS for growth.
Good order chassis and container fleet to support growth goals
Crescent Corridor, including AGS technologyNortheast network extensions and improvements, via PanAm & D&HCREATE, Chicago, and the Premier Corridor Slide14
Equipment Management Program (EMP)
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Fleet sizing plan for 2016-17 is centered on quality improvement and optimal
capacity
NS Owned goal is 100% corrugated steel fleet EOY 2017Slide15
Intermodal Maintenance & Repair System (IMRS) deployment
One vendor remaining to complete
deployment
Real time reporting is improving productivity
Mechanics can address all maintenance needs, with data from all available sources – gates, DVIRs, other railroads, roadside inspections, and preventative maintenance schedules
CONFIDENTIALSlide16
Northeast Network Extensions
16
NS
acquired 282
miles of “D&H South Lines”Time-sensitive intermodal shippers moving traffic to/from Albany, NY and Ayer, MA (Boston) should get improved service, because the transaction directly connects NS to Pan Am Southern:
More consistently achieve the promised efficiencies of the PAS network /
facilitiesImproved service and competitive transportation options for intermodal shippers in the PAS corridor Slide17
Chicago
Cleveland
Indiana Gateway
Completion: 2Q’16
Englewood Flyover
Completed: 2014
Bellevue
Completed:
2Q’15
CREATE
Public-Private Partnership with 30+ projects
benefitting
NS
More than $750 M investment has been committed to increase
capacity along the critical NS Chicago Line Corridor.
Adding and realigning pad track
Increasing paved area and parking
Improved stormwater drainage
Advanced gating system
In addition, numerous projects completed at 4 Chicago terminals:
Capital
Projects:
Northern Region
17
Englewood Flyover
47
th
Street Expansion
Bellevue
Expansion
Goshen Connection
Indiana Gateway
CF&E RailroadSlide18
Market Outlook
18Slide19
Domestic Market Drivers
19Slide20
Truck Market Beginning to Tighten
Truck utilizationProxy for supply & demandToo many trucks, not enough freight = tight competitionLow since 2015; beginning to tick upProjected to tighten due to truck regulations
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Source: FTR, 9/30/16Slide21
Thank You
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