Watco Perishable Express North East Association of Rail Shippers

Transcription

1 Watco Perishable Express North East Association of Rail Shippers April 19, 2018 Customer First Safety Always! 1

2 Agenda Quick (I promise) Watco Overview Existing perishable supply chain issues Perishable Express supply chain Questions/Discussion

3 Customer First Foundation Principles Customer First - Safety Always! Value Our Customers Earn their business every day by providing Safe, Accurate, and Timely Service Create solutions that deliver value for our Customers and Watco over the long-term Value Our People SAFE Service, ALWAYS Be Honest and Fair Safely Improve Every Day Always do the right thing and always try to find a better way Build a tremendous future by making decisions that protect our Customer, Team, Community, and Environment Customer First Safety Always! 3

4 Watco Overview Geographic Diversity We operate 37 railroads, 34 mechanical shops, 78 terminal and port operations, and 34 switching locations in 38 States, 1 Canadian Province, Western Australia, and Mexico. Customer Commodity Geography Service 4

5 Watco Overview Unique Services Offering Transportation Services 53% of 2017 Revenue Second largest short line operator (largest private operator) in North America with 37 short line railroads in the U.S. and Australia +440 locomotives +4,200 railcars +5,100 track miles +1MM car loads transported or switched 34 switching and other operations Operations in 29 states and Australia Terminal and Port Services 25% of 2017 Revenue 78 Terminal and Port Operations 43 Transload Terminals 33 Marine Terminals 2 Specialty Terminals Service Offerings 25 Dedicated Contract Facilities 53 Merchant Terminals Mechanical Services 14% of 2017 Revenue Formed joint venture with The Greenbrier Companies effective July 18, 2014 ( GBW ) Provides repair and maintenance services 34 mechanical facilities 11 Tank Shops 11 Freight Car Shops 7 TTX Shops 5 Mobile Repair 8% of 2017 Revenue Opportunity to solve Customer supply chain needs 15 Supply Chain Service Centers End to End solutions Supply Chain Services +25,000 Licensed Motor Carriers Under Contract Customer Commodity Geography Service 5

6 Perishable Express Goals Initially: Protecting rail shipments of our shortline s biggest commodity (fresh potatoes) by innovating service, facilities, and equipment (the Supply Chain) Now: Building a new supply chain using the most efficient equipment and new technology with the rail industry s best service to build incremental perishable rail traffic

7 Eastern Idaho Railroad

8 Things To Fix Service: day one-way cycle time Equipment: Retiring 50 ARMN fleet - 2.5:1 truck conversion Damage: Consistent 5-20% damage per rail load due to existing slip sheet pallet loading Dunnage: Customers paying $ per load to secure slip sheet pallet loading (particularly in fresh shipments) Loading/Unloading Time: Slip sheet pallet loading/unloading takes 5-6 people 4-5 hours per car to load/unload a car

9 Learn About The Market: Current Truck Lanes

10 Burley, ID - Market Customer First Safety Always!

11 Idaho Falls, ID - Market Customer First Safety Always!

12 What We Did Service: Use Class 1 premium service Equipment: Use the largest most efficient car Damage/Dunnage/Loading & Unloading: Use new technology Bundled Pricing and Tracking Farm to Table

13 What is Perishable Express Burley Warehouse New Car, New Equipment (Racks, Rollers) 72ft Car, 4:1 truck conversion Racks, eliminates dunnage, speeds loading, reduces damage, gets down to pallet level customer) Service (UP Food Train, NS Intermodal) Bundled farm to table pricing and tracking using Watco Supply Chain Services Not just fresh potatoes now (butter, onions, frozen potatoes) flexible to ship multiple commodities per load Truck competitive product to the Northeast for Idaho Shippers

14 Train Service UP Food Train EIRR connects at Minidoka and Idaho Falls and hits the Food Train at Pocatello < 3 days Pocatello to Global 3/Rochelle; Train ZWACYP UP intermodal train (Rochelle Chicago) connects to NS; Train IG3AH NS Intermodal Cars run on priority UPS intermodal trains Ashland Ave/Chicago Harrisburg, then Harrisburg Bethlehem; Trains 24Z and 22V Total transit time Burley Bethlehem has ranged from 7-11 days (the 11 day trip was during the blizzard of early 2017)

15 A Sight For Sore Eyes Getting Through Chicago

16 Origination Terminal Watco acquired the Burley, ID Warehouse to feed Food Network. Developed a trucking strategy with a local Idaho trucker to deliver product from customer sheds to the Warehouse. Joint marketing with customers to win business.

17 Destination- Bethlehem, PA Customer First Safety Always!

18 Equipment - Refrigerated Boxcar Specs Partnered with ARX (Fed Ex freight movement/rack system) GBRX and TILX Refrigerated Boxcar Specs o ~179,000 lb. net weight o 20 Racks / 80 pallets per railcar o 4:1 Truck to boxcar conversion

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20 The Rack and Rollers System

21 Loading

22 Inside the Car

23 Total Package Utilizes Patented Racking / Roller System o Eliminates damage o No dunnage o No blocking/bracing o Faster and safer load / unload Premium Rail Service o 7-9 day normal service o Truck competitive o Added capacity o Manifest to Intermodal

24 Customer First Safety Always! 7

25 Where are we today? Fully integrated and flexible supply chain Trucks Warehouses Rail One Price 3 Cars In Service / 21 In Service by 3Q 3 Tables In Service Pallet Level Shipping via the rack system Mixed products Mixed customers

26 Commodities Eastbound Examples of shippers utilizing Perishable Express Fresh potatoes from Burley, ID to NJ for cruise ships Fresh onions for restaurants in NY, NJ Mixed loads of fresh onions and potatoes for grocery stores. Frozen butter for croissants for LeCoq Cuisine in CT and for cookies for David s Cookies in PA and NJ Frozen French fries from Caldwell, ID to PA. Frozen potatoes products from Caldwell to New England destinations.

27 What s Next 21 total cars in service by 3Q 5 tables in service by 2Q Setting up additional origins and destinations Turn Nampa (BVRR interchange) on to UP Food Train Continued fleet expansion Developing Backhauls Shipped our first backhaul last week (Boston Beer Co. and other NE micro brews to Seattle from Bethlehem) 3x mile loaded hauls in a month

28 The Secret Sauce Focused Origins and Destinations Must connect well with intermodal network Shortline or Class 1 delivery: Both work Extremely short turn time on equipment

29 Thank You