The National Gateway Preparing for Tomorrow Lisa Mancini, VP Strategic Infrastructure Initiatives

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1 1 The National Gateway Preparing for Tomorrow Lisa Mancini, VP Strategic Infrastructure Initiatives

2 2 CSX moves what matters to America...

3 Transportation demand is on the rise Industrial Production Population Consumption Transportation Demand Global Trade 3

4 Congestion is getting worse Today 2020 CSX Territory Source: USDOT FHWA Freight Analysis Framework 4

5 Additional infrastructure investment is needed Investment required by 2035 Freight Rail Passenger Rail Highways $ 5 Trillion $ 135 Billion $ 198 Billion Source: Rail 2007 AAR/Cambridge Study; Highway 2007 DOT Surface Transportation Study 5

6 Intermodal partnerships with freight rail make sense for moving freight Highways experiencing pressure. Increasing maintenance burden Rising fuel prices Aging infrastructure Escalating construction costs Highway congestion Cost per Mile 24-28% 8-12% Q Q Trucks Rail 6

7 Freight rail enables Intermodal success Increased need for supply chain flexibility Shifting global supply chains Globalization, Panama Canal expansion favor diversification to East Coast ports Intermodal freight transport increasingly critical to meeting nation s transportation needs Combined efficiency of freight rail and flexibility of highway transportation 7

8 And CSX provides sustainable transportation solutions Rail is one of the safest and most secure modes of surface transportation Safe and Secure One Intermodal train can carry the load of 280 trucks Efficient A locomotive can haul a ton of freight more than 423 miles on one gallon of fuel Rail capital investment relies principally on private funds Green Sustainable 8

9 CSX is committed to infrastructure investment CSX invests heavily in its network to deliver reliable and efficient service to meet our customer s future transportation needs In 2007, CSX spent $1.7 billion, or 15 percent of its revenues, on capital expenditures CSX will spend approximately $5 billion between now and 2010 When the public and private sectors work together, we all can achieve more 9

10 Working together, we can achieve more Relatively small public investments in the nation s freight railroads can be leveraged into relatively large benefits for the nation s highway infrastructure, highway users, and freight shippers. AASHTO Many federal and state policymakers are increasingly turning to public private partnerships as they work to meet America s future transportation needs Investment in multiple modes of freight transportation by both the public and private sectors is critical 10

11 The National Gateway: Preparing for Tomorrow 11

12 The National Gateway: critical to meeting freight transportation demands NW Ohio Transfer Yard Chicago Pittsburgh Chambersburg Boston Creates a double stack network along key corridors Improves the flow of freight between the Mid-Atlantic and Midwest, as well as the nation St. Louis Memphis Columbus New York Baltimore Hampton Roads Wilmington Howard St Tunnel Terminal Construction 2008 Planned Construction New Orleans Florida National Gateway Project National Gateway creates an efficient Double intermodal Stack network Clearance Existing or Planned 12

13 Clearance and infrastructure work needed 63 clearance projects in 6 states and the District of Columbia to achieve 20 2 clearance 16 clearance projects in Ohio Construction work varies from minor modifications to complete reconstruction of bridges, tunnels and other infrastructure 6 new/enhanced terminals along the National Gateway corridor utilizing the latest technology 2 new/enhanced terminals in Ohio 13

14 National Gateway clearance work in Ohio Name Location Project Estimated Cost (in thousands) TR 391 Sullivan Replace existing bridge $3,314 CR 150 Sullivan Replace existing bridge $3,424 River Corners Rd. Pawnee Replace existing bridge $3,203 Pawnee Rd. Pawnee Replace existing bridge $3,866 Mud Lake Road Creston Replace existing bridge $4,308 Thornton Street Akron Lower tracks-undercut location $251 Overhead Walkway Akron Lower tracks $328 Park Street Akron Lower tracks/revise permanent alignment $1,988 Railroad Bridge Kent Lower tracks $5,412 Main Street/Craine Ave. Kent Lower tracks $14,359 NS RR Bridge/Abandoned RR Bridge Kent Raise bridge superstructure $2,540 NS RR Bridge Ravenna Lower tracks $6,296 Knapp Road Ravenna Replace existing bridge $3,093 Rock Springs Road Newton Falls Replace existing bridge $3,093 5 th Street Niles Replace existing bridge $4,087 Abandoned RR Bridge Youngstown Remove portion of existing bridge $469 *Costs estimates inflated at 2% per annum. Total = $60,029 14

15 Construction methods & examples Tunnels Notching Liner is removed at corners to achieve desired clearance Tunnels Day Lighting Removal of overburden and open-cutting of tunnel 15

16 Construction methods & examples Bridges track lowering Undercutting Track for minor track lowering Staged lowering to maintain service 16

17 Construction methods & examples Bridges raise/replace Bridge jacks used to construct shoring towers Truss modifications 17

18 New and enhanced terminals Chambersburg, PA Charlotte, NC NW Ohio Intermodal Yard Columbus, OH Baltimore/Washington DC Pittsburgh, PA 18

19 The National Gateway will improve flow of freight CSX National Gateway CSXT double stack routes Other CSXT routes Chicago Wood County Yard Cincinnati Toledo Cleveland S. Columbus Yard Baltimore NYNJPA Connects Mid-Atlantic Region to the Midwest and beyond Northwest Ohio transfer yard enables CSX service to major Ohio cities Supports long-term growth of Mid-Atlantic ports Expedites traffic through Chicago and St Louis St Louis Portsmouth Extends market reach for Ohio shippers to East Coast ports Memphis Wilmington 19

20 The National Gateway is Good for Ohio $267 million in benefits to Ohio (based on 2007 Cambridge Systematics study) Reduces congestion: One train carries the load of more than 280 trucks, reducing congestion on I-76/I-80 and I-70 Reduces greenhouse gas emissions: Trains emit 1/3 the level of emissions and move one ton of freight more than 423 miles on one gallon of fuel Reduces highway maintenance costs and improves safety: Removes 500,000 trucks from Ohio highways over 10 years Promotes economic development CSX will invest $130 million in Ohio for terminal construction and expansion, creating thousands of new jobs 20

21 National Gateway Costs and Funding Federal = $181 Million State = $181 Million CSX = $362 Million Total = $724 Million Federal State CSX $8 in public benefits for every $1 of public funds invested 2121

22 National Gateway Launch May 1, 2008 Pacer Global Logistics Dublin, Ohio 22

23 National Gateway proposed timeline CSX introduces NG to key state partners Chambersburg becomes operational Charlotte terminal phase 1 expansion complete CSX publicly announces NG NW Ohio transfer yard construction begins Current highway reauthorization bill expires NW Ohio transfer yard complete Highway reauthorization funds available National Gateway additional terminals construction begins Construction of the National Gateway 2014 National Gateway additional terminals complete 2015 National Gateway Targeted Completion 23

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25 Ohio Supports the National Gateway The Ohio Chamber is excited about the additional jobs and infrastructure the National Gateway will create for Ohioans. We are pleased to support CSX and the National Gateway Project. -- Andrew E. Doehrel President, Ohio Chamber of Commerce 25

26 Next Steps: Continuing our multi-modal partnership To continue to prosper and compete in the global economy, America needs a robust and efficient transportation system Significant infrastructure investments are needed Railroads can be partners in providing sustainable transportation solutions Rail investments are smart public policy--need strong advocacy 26