1What’s your nextmove?™ |

Ken Miller VP Operations

Supply Chain Trends in Intermodal

2What’s your nextmove?™ |

SERVICE REVIEW: MARKET SHARE

Market overview (segment specific)Market size:  $12 Billion Capacity:  205,000    53‐foot Containers  Industry outlook:   Growing at > 7%

Our position25 ‐ 28% of overall market (revenue and/or capacity)

OpportunitiesHighway Conversion Customer DeliveriesNew Services – Canada/Mexico/Eastern Network Expansion  

RoadblocksMarket Share Competitor Actions 

3What’s your nextmove?™ |

Intermodal Rail Carrier Industry Comparison  

INTERMODALVOLUME

2011SALES APPROACH CAPACITY

4.5 M

3.3 M

2.3 M

3.2 M

BNSF & Motor Carriers

Motor Carriers

Unlimited

IMC Limited by fleet size

IMC & Motor Carriers

Limited by fleet size

Limited by fleet size

LARGESTSEGMENTby volume

Intermodal

Industrial Products

Coal

Industrial Products

Rail Owned

Containers

Containers

Trailers & Containers

EQUIPMENT OWNER

IMC & Motor Carriers

Rail Owned

Rail Owned

Containers

Type

4What’s your nextmove?™ |

Estimated 53’ Domestic Container Fleet by Owner

Total Fleet Size205,000

170 200 200300 350 400 800 1,000 1,000 2,000 2,000 

4,100 5,000 5,000 

8,500 12,600 

18,000 22,900 

31,000 31,000 

60,000 

 ‐  10,000  20,000  30,000  40,000  50,000  60,000  70,000

KCSMartenMatson

USA TruckDart

Universal LogisticsTrailerbridgeCH RobinsonAPL Logistics

COFC LogisticsCrowley

CSXUPSCN

SwiftSchneider

PacerHub

EMHUUMAX

JBH

North American 53' Domestic Container Fleet Size by Owner

5What’s your nextmove?™ |

Who are the players? 

Union Pacific Based Providers Hub Group (Red, White, or Green Containers) EMP Rail Owned Equipment   (White or Green Containers)  UMAX (Blue Containers / Yellow and White Lettering) PACER (Blue Containers) 100’s of IMC Competitors (Intermodal Marketing Company)  Largest Mexico Presence 

BNSF Based ProvidersSchneider Swift

First Priority is Highway Conversion 

6What’s your nextmove?™ |

Source: Establish, Inc/Herbert W. Davis and Company 2006 Database

LOGISTICS COST BREAKDOWN

50%

22%

10%8%

4% 3% 2% 1%

Transportation Inventory Labor Customer Rent Admin Supplies Other

Transportation is generally the greatest cost in the supply chain. 

Focus on Transportation Collaboration to reduce costs and increase capacity.

Supply Chain Opportunities

7What’s your nextmove?™ |

Today’s Supply Chain Landscape

Shippers are looking for partners with flexible, comprehensive, value added solutions

Steadily increasing freight demand

Truckload capacity continues to tighten

Supply/demand balance becoming an issue

Intermodal volumes continue to rise and take highway share

Diesel prices remain elevated

CONFIDENTIAL

8What’s your nextmove?™ |

Top Supply Chain Challenges (Next 2‐5 Years)

Tightening driver market

Government regulationsCSA EOBR mandates Hours of Service CARB

Aging equipment leads to replacement at higher cost basis

Highway infrastructure – congestion and deterioration

Access to capital

Fuel

Managing Budgets

CONFIDENTIAL

9What’s your nextmove?™ |

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

Jan‐1995

Jul‐1

995

Jan‐1996

Jul‐1

996

Jan‐1997

Jul‐1

997

Jan‐1998

Jul‐1

998

Jan‐1999

Jul‐1

999

Jan‐2000

Jul‐2

000

Jan‐2001

Jul‐2

001

Jan‐2002

Jul‐2

002

Jan‐2003

Jul‐2

003

Jan‐2004

Jul‐2

004

Jan‐2005

Jul‐2

005

Jan‐2006

Jul‐2

006

Jan‐2007

Jul‐2

007

Jan‐2008

Jul‐2

008

Jan‐2009

Jul‐2

009

Jan‐2010

Jul‐2

010

Jan‐2011

Jul‐2

011

Jan‐2012

Fuel is Gaining Executive Visibility in Freight Costs 

Source: U.S. Dept. of Energy (EIA)

$4.127/gal3/31/2012

RECESSION

10What’s your nextmove?™ |

Intermodal Remains Attractive

Source:  IANA Intermodal Market Trends and Statistics

Millions

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Yearly Intermodal Traffic Totals

2010 2011 2012

11What’s your nextmove?™ |

Intermodal Benefits Are Driving Change

Shippers, Carriers, Environment

● Economical

● Expanding capacity

● Greener shipping

● Less congestion  

● Better jobs

● Economical

● Expanding capacity

● Greener shipping

● Less congestion  

● Better jobs

Shippers, Carriers, Environment

● Economical

● Expanding capacity

● Greener shipping

● Less congestion  

● Better jobs

CONFIDENTIAL

12What’s your nextmove?™ |

What Freight Moves Intermodal Today?

Types of Intermodal Shipments

● Import shipments

● Inbound to DC and Outbound to Store

● Consolidation

● Temp‐Controlled

● Flatbed

● Import shipments

● Inbound to DC and Outbound to Store

● Consolidation

● Temp‐Controlled

● Flatbed

Types of Intermodal Shipments

● Import shipments

● Inbound to DC and Outbound to Store

● Consolidation

● Temp‐Controlled

● Flatbed

CONFIDENTIAL

13What’s your nextmove?™ |

So Why Hasn’t More Freight Been Converted?

Some Shippers Say…

● “I had a bad experience with Intermodal 15 years ago.”

● “Shipping requirements won’t allow Intermodal.”

● “Intermodal transit is slow and variable.”

● “Won’t work for my customers.”

● “I had a bad experience with Intermodal 15 years ago.”

● “Shipping requirements won’t allow Intermodal.”

● “Intermodal transit is slow and variable.”

● “Won’t work for my customers.”

Some Shippers Say…

● “I had a bad experience with Intermodal 15 years ago.”

● “Shipping requirements won’t allow Intermodal.”

● “Intermodal transit is slow and variable.”

● “Won’t work for my customers.”

CONFIDENTIAL