11

Rail – The Intermodal Connection

Drew Glassman, AVP Intermodal MarketingCSX Transportation

Holistic focus on controlling supply chain costsHolistic 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

22

Truck capacity is imminent concern for futureTruck capacity is imminent concern for future

Driver shortages are a threat with economic recovery— 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

Driver supply impacted by many macro-factors— CSA, HOS and other proposed

regulations— Aging driver base — Recovery of housing market

33

Surplus/(Shortage) Capacity Utilization

Truck Capacity Utilization to Increase, Resulting in a Shortage

2012

Source: FTR

Intermodal provides scalable capacityIntermodal provides scalable capacity

44

You Can Go Herewith Intermodal

Coast-to-coast intermodal network with global reach— 14 million loads moved in 2011— Access to key markets,

population centers— Connectivity to major U.S. ports

Access to a large, growing container fleet— Rail and carrier-owned assets

Intermodal scales to meet supply chain needs efficiently— One train can move the load of

280 trucks

Intermodal industry volume has steadily grownIntermodal industry volume has steadily grown

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

U.S. Intermodal VolumeUnits in Millions

Source: Intermodal Association of North America

14.1M

3.1M

Volume has increased more than four-fold Volume has increased more than four-fold

55

Intermodal offers sustainable savingsIntermodal 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%

66

If 10% of long haul highway freight converted to rail…

Annual fuel consumption would decrease by 12 billion gallons, andAnnual greenhouse emissions would decrease by 12 million tons

Source: AAR

Intermodal conversion opportunity is substantialIntermodal conversion opportunity is substantial

5.5

9.3

Eastern Freight Market(units in millions)

Intermodal Opportunity

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

Freight length of haul > 550 milesFreight length of haul > 550 miles

Sources: AAR CS-54 and Global Insight’s Transearch data

77

Far-reaching, dynamic network— Hub and spoke design provides

unique service capabilities

Aggressive capital investment— Terminal and infrastructure

development, public-private projects

Customer and service focus— Minimizing variability in service, while

meeting customer needs

Highway-to-rail “H2R” strategy— Conversion of over-the-road loads

America’s first railroad— Founded 1827, headquartered in

Jacksonville, FL

Largest rail network in east— 21,000 route miles in 23 states,

serving 70 ports

Significant resources— Over 4,000 locomotives, 80,000

freight cars, 30,000 employees

Ranked 226 on Fortune 500— $11.7 billion of revenue in 2011

Shippers achieve the value of intermodal with CSXShippers achieve the value of intermodal with CSX

88

Company Overview Intermodal at CSX

9999

The National Gateway is evolving the rail network The National Gateway is evolving the rail network

Public-private investment of $850 million— State, Federal, and CSX funded— Support of 300+ public and private

organizations and individuals

Increases efficiency and reach of U.S. rail network— 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 networkNorthwest Ohio Hub creates a more efficient network

Chicago run-through for Western interchange

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

Hub and spoke network is a strategic differentiator

1010

CSX focused on highway-to-rail (H2R) strategyCSX focused on highway-to-rail (H2R) strategy

1111

Service Reliability Meeting

customer commitments

Minimizing variability in the service product

Network Design NWOH –

Hub & Spoke

New England

Florida

BCO Education Dedicated

National Accounts Team

H2R Optimizer

Channel Strategy IMC Brokers Ocean

carriers Truck

Highway-to-rail continues to drive industry growthHighway-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

1212

AppendixAppendix

1414

Public-private investments continue to grow networkPublic-private investments continue to grow network

In 2011, businesses and state and local agencies invested over $1.3B

CSX also investing in new terminals and infrastructure throughout network

Clearance projects enable double-stack capable network— New England— National Gateway

1515

Terminal Expansions

New Terminals

CSX Investment in Rail Network (2011)

Private-Public Investment Rail –Served Facilities (2011)

$ 5M

$ 1M

$105M

$165M

$ 90M

$ 8M

$ 84M

$ 70M$ 70M

$ 30M

$ 50M

$ 1M$ 66M

$385M

$117M

$ 74M

$515M

$ 71M

$ 2M

$ 35M

$ 70M

$ 37M

$ 4M

$ 46M

$ 73M

$250M

$ 44M$ 44M

$ 1M

$ 94M

$ 10M

$ 2M

$ 2M

$ 67M

$ 3M

$ 10M

$ 53M

$ 1M

*D.C.

Investment in the Rail Network