robert e. martínez vice president business development norfolk southern corporation
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Robert E. Martínez Vice President Business Development Norfolk Southern Corporation. FHWA: Talking Freight Seminar March 2004. NS 2003 Revenues. Total: $6.5 billion. Intermodal is growing fast. It’s been growing very fast in the United States. - PowerPoint PPT PresentationTRANSCRIPT
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Robert E. MartínezVice President Business Development
Norfolk Southern Corporation
FHWA: Talking Freight Seminar
March 2004
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NS 2003 RevenuesTotal: $6.5 billion
Chemicals12%
Paper10%
Intermodal19%
Automotive14%Coal
23%
Agriculture11%
Metals & Construction
11%
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Intermodal is growing fast.
It’s been growing very fast in the United States.
It’s been the single, fastest-growing “commodity” group at Norfolk Southern.
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0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Trailers Containers Total
Intermodal Growth Year over Year
(US and Canada)
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What do we mean by “Intermodal”?
In railroad parlance it means something very specific.
COFC: Container on Flatcar
TOFC: Trailer on Flatcar
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14-Year Equipment Trends
0%10%20%30%40%50%60%70%80%
1988* 1994 2001 2002
TrailersContainers
*First year measured
UNITS: 5.7 million 8.1 million 10 million 11.4 million
Source: AAR
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Note: Intermodal is point-to-point service, unlike
traditional carload businesses.
For profitability, the intermodal network must not be balkanized.
You need sufficient volumes, few train blocks [segments].
You need carefully to analyze and work the capture region of a given facility.
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The Norfolk Southern Intermodal System
Fully C le ared D o uble S tackR o ute s on N S
Fully C le ared D o uble S tackR o ute s on C o nnecting R a ilroa d s
In term od al R ou tes w ith R estriction sto S ing le S tack on C onn ectin gR a ilroads
In term od al R ou tes w ith R estrictionto S ing le S tack
W ill B e C lea re d for 1 9’3” (D oub le S tackIn one H igh -C ub e & O ne Low -C u beC o nfig ura tion
Term ina ls
Canada
New Orleans
Charleston
Savannah
Jacksonville
Miami
Atlanta
Columbus
Greensboro
FrontRoyal
Buffalo
Detroit
Louisville
Cincinnati
Memphis
KansasCity
St. Louis
Charlotte
Pittsburgh
New York/New Jersey
Philadelphia/Morrisville
Baltimore
Cleveland Harrisburg
Norfolk/Hampton Roads
Huntsville
Peoria
Toledo
Georgetown
Boston/Ayer
Taylor
Bethlehem
Dallas
AlexandriaDecatur
Toronto
Montreal
Waterville
Minneapolis
Binghamton
Meridian
Albany
Chicago
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NS Intermodal growth has been driven by:
Steady and fairly intense investment in infrastructure and facilities
New “product” development
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New Products have been driving NS Intermodal
growthClevelandGPA ICTF in SavannahGuaranteed services Transcon with
UP (Blue Streak) and with BNSFHurricane with FECDockside to CanadaExpedited service to Mexico with UP
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Intermodal market share:
Chicago – Los Angeles 84%
New York – Chicago 38%
Northeast – Southeast 5%
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Interline Operating Relationships are Critical for the
Intermodal Product
39%
61%
InterlineLocal
Connection NS IM Share BNSF 28.5%
BNSF/KCS 6.7%
UP 15.6%
CP/D&H 1.5%
D&H/GTI 3%
KCS 2%
FEC 2%
NYSW 2%
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Charlotte, 6TH A.M.
Charleston, 6TH P.M.
Savannah, 6TH A.M.
Jacksonville, 7TH A.M.
Miami, 8th A.M.
Alliance(Dallas)
Atlanta/Austell5TH A.M.
Chicago Erail, 5TH A.M.
Harrisburg, 5TH A.M.
Croxton, 6TH A.M.
Baltimore, 6TH A.M.
Norfolk, 7TH A.M.
Ameriport/Morrisville, 6TH A.M.
Port of Long Beach
BNSF Hobart
Oakland/Richmond
San Bernardino
Port of Los Angeles
Clovis, NM
NS-BNSF Transcon ServicesNS-BNSF Transcon Services
Columbus,5TH A.M.
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NS-UP Improved ConnectionsNS-UP Improved Connections
El Paso
Dallas
Charlotte, 7TH P.M.
Savannah, 7TH A.M.
Jacksonville, 6TH P.M.
Miami, 7TH A.M.
Atlanta/Austell5TH P.M.
Cleveland, 5TH, A.M.
Columbus,5TH A.M.
Ayer, 7TH A.M.
Baltimore, 6TH A.M.
Erail, 6TH A.M.
Norfolk, 8TH A.M.
Ameriport/Morrisville, 6TH A.M.
Port of SeattlePort of Tacoma
Granger
Fremont
Chicago
Port of Long Beach
Oakland
Port of Los Angeles
UP ICTF
Harrisburg, 5TH A.M.
Memphis
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We are pursuing opportunities to
add value in other commodity and
product areas as well.
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Metals & Construction
SNDG10%
MCON17%
CMT5%
BRICK 2%
MACH3%
SCPM11%
IRST18%
COIL27%
OREA3%
ALUM4%
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In the paper and forest products sector
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Paper Mill
Paper Mill
Paper Mill
Certified Distribution Center(s)
Paper Receiver
Paper Receiver
Paper Receiver
Paper Receiver
New Products and Services: Thoroughbred EXTRA
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For chemicals and agricultural
commodities:
Thoroughbred Bulk Transfer Facilities
“TBT’s”
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TOP: The ThoroughbredOperation Plan
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Operating PhilosophyPre-TOP
– Tonnage-Based Operations– Optimize Operations Within Separate
Operating Divisions
Post-TOP– Scheduled Operating Plan– Optimize Operations Across Entire Railroad
•Minimize Blocking Complexity•Eliminate Handlings•Minimize Circuity
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TOP DevelopmentRunning a Scheduled Railroad
Objectives– Improve service reliability and system
velocity– Eliminate transit variation– Reduced railcar handling through the use
of optimized blocking plan– Improve asset utilization– Improve Customer Satisfaction
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The intent is not necessarily always to reduce transit time.
It is to provide consistent reliability.
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15
17
19
21
23
25
27Ja
n
Feb
Mar Apr
May Ju
n
Jul
Aug
Sep Oct
Nov
Dec
week ending
mph
1999 2000 2001 2002 2003 2004
System Average Train Speed
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175,000180,000185,000190,000195,000200,000205,000210,000215,000220,000225,000230,000235,000240,000245,000250,000
Jan
Feb
Mar Apr
May Ju
n
Jul
Aug
Sep Oct
Nov
Dec
date
Car
s on
Lin
e
1999 2000 2001 2002 2003 2004
Cars On Line
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20
22
24
26
28
30
32
34
36Ja
n
Feb
Mar Apr
May Ju
n
Jul
Aug
Sep Oct
Nov
Dec
week ending
hour
s
1999 2000 2001 2002 2003 2004
System Average Terminal Dwell
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82
.2%
82.6
%
86.8
%
83.5
%
84.9
% 91.6
%
83.2
%
76.2
% 84.3
%
54.1
%
57.2
%
51.3
%
79.9
%
57.4
%
48.5
%
70.7
%
71.8
%
73.3
%81.3
%
65.7
%
90.8
%
86.0
%
84.6
%
83.6
%
72.6
%84.6
% 91.2
%
86.3
%
0%10%20%30%40%50%60%70%80%90%
100%
On
time
%
2000 2001 2002 2003
Train Performance
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The End