Transportation Update

Transcription

1 Transportation Update by Wayne Johnson Manager Global Carrier Relations Owens Corning 1 Owens Corning Parkway Toledo, OH Phone: wayne.johnson@owenscorning.com

2 AGENDA Wayne Johnson & Owens Corning Transportation Related Statistics Key Metrics to Watch Modal Choices & Shipper Relationships Regulation l Affecting Transportation ti Preparing for the Immediate Future Don t Be a Blocker Q & A

3 OWENS CORNING 15,000 World Wide Employees 900 Employees WHQ in Toledo, OH Operating Facilities i in 28 Countries Fortune 500 Company for 57 Years Numerous Awards for Being a Environmentally Friendly Manufacturer PINK IS GREEN

4 OWENS CORNING US -$550 MM+ Annual Spend All Modes US 495 K Truck Shipments US 145 MM Highway Miles US Truckload, Rail, Intermodal, LTL, Ocean US - Contract With 190+ Trucking Companies US - Contract With 7 Class 1 Railroads US Contract With 12 Steam Ship Lines

5 Roofing Asphalt World Headquarters ROOFING & ASPHALT Portland Minneapolis Denver Granite City Summit Brookville Toledo Medina Kearny Compton Oklahoma City Memphis Atlanta Irving Savannah Houston Houston Jacksonville LEGEND:

6 Insulating Systems Business

7 Insulating Systems Business

8 Insulating Systems Business

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12 Transportation Related Statistics Key Metrics to Watch Unemployment (9.1%) Bureau of Labor Housing Starts (601,000) NAHB Diesel Prices ($3.721) 2 EIA Class 8 Manufacturing American Commercial Vehicle Rail Volumes AAR Rail Cars in Storage AAR Truckload Freight Index Morgan Stanley Pulse Of Commerce Index (PCI) UCLA

13 Transportation Related Publications & BLOGS Journal Of Commerce (JOC) Transport Topics FTR AAR Smart Brief Inbound Transportation Distribution Magazine Morgan Stanley BB&T Capital Markets Cleveland Research Dahlman Rose & Co. Stevens Loaded Rate/Mile Index American Shipper

14 Today s Modal / Shipper Relationships Why is Relationships Important? To accomplish a Shippers primary mission: Serve the Customer Railroads: Cartel or free market success story? With 90% of U.S. rail freight now controlled by only four companies, shippers claim the giants have unfairly banded together. Unapologetic railroads refuse to back down. An epic battle of business vs. business. Fortune Magazine

15 Today s Modal / Shipper Relationships Shippers Affecting Modal Bankruptcies Timing of RFQ S Fuel Surcharges Mileage Software Deadhead dmiles Payment Terms Dwell lltime RFQ Design Rate Reviews

16 Rail or Truck Today s Modal / Shipper Relationships Is Rail just for the long haul? East VS West Coast Rails Shortlines Factors that affect decision Customer Preference Shippers Preference The Lane Product Existing Service Equipment Carriers Involved Lead Time Fuel Service Demands

17 Regulation Affecting Transportation - Rail STB Initiates Declaratory Order Proceeding on BNSF Acquisition Premium In response to a petition from the Western Coal Traffic League (WCTL), the Surface Transportation Board (STB or Board) has opened a declaratory order proceeding to determine whether the acquisition premium that Berkshire Hathaway Inc. (Berkshire) paid to acquire BNSF Railway (BNSF) should be included in BNSF s net investment base. October 13, 2011 Notice of Intent to Participate Due October 28, 2011 Opening Evidence and Argument Due from All Parties of Record (PORs) November 28, 2011 Reply Evidence and Argument Due from All PORs. December 12, 2011 Rebuttal Evidence and Argument Due from All PORs.

18 Ex Parte No. 711 Regulation Affecting Transportation - Rail Petition by the National Industrial Transportation League Rulemaking to Adopt Reciprocal Competitive Switching Rules. If captive shippers can't get a Class I railroad to give them access to a competingrailroad, they would be able to go to the board and get a competitive switching agreement ordered if they could meet several conditions that NIT League said would be "unambiguous."

19 Regulation Affecting Transportation - Rail Rail Competition Surface Transportation Board Reauthorization Act of 2011. Rockefeller (D-WV) Rail Anti-Trust Railroad Antitrust Enforcement Act of Senator Herb Kohl (D-WI) PTC Still being reviewed Implementation Date 2015 Rail Fuel Surcharge Railroad Exemptions - STB Ex Parte 704

20 Regulation Affecting Transportation - Motor Regulatory Update Hours of Service Decision Required by October 28, 2011 Electronic on Board Recorders (EOBRs) All motor carriers required to maintain Records of Duty Status must install and use EOBRs within 3 years of the effective date of the final rule CSA Initiative Effective December 15 and still being modified

21 Regulation Affecting Transportation Motor/ Rail HAZARDOUS MATERIALS REGULATIONS The ORMD designation is being phased out and replaced with an internationally recognized Limited Quantity diamond. Deadlines are as follows: International Air January 1, 2011 (immediately) US Domestic Air January 1, 2013 International Ocean/Road January 1, 2012 US Domestic Surface January 1, 2014

22 Regulation Affecting Transportation - Motor Legislative Update Surface Transportation Bill The chairman of the House Transportation and Infrastructure Committee said "we need big money" for improving U.S. transportation infrastructure and the outgoing Secretary of Transportation said "we need a big plan," because "America is one big pothole," but both discussed differing ways of getting there at a transportation infrastructure summit held in Washington D.C. today.

23 Regulation Affecting Transportation - Motor Legislative Update Surface Transportation Bill Transportation Secretary Ray LaHood said he will leave the Obama administration at the end of the president's first term. "I serve at the pleasure of the president, and it is an honor to look out for the safety of the American public when it comes to planes, trains, automobiles and more," LaHood said. "Throughout this term, we have also focused our efforts on creating jobs as we rebuild our roads, rails and runways, and I look forward to working with Congress to pass the American Jobs Act."

24 Regulation Affecting Transportation - Motor Legislative Update Surface Transportation Bill Infrastructure investment for job generation is "a no- brainer," and both the House and Senate transportation committee leaders understand that immediate action to pass an "infrastructure program" is necessary, said Transportation Secretary Ray LaHood. "They know that we need to get a transportation program; we need to put people to work," he added. "I believe that we are going to get an infrastructure program. And I believe it'll happen before the end of the calendar year, because I think there's an enormous amount of pressure on Congress."

25 Regulation Affecting Transportation - Motor Legislative Update Truck Size & Weight Legislation SETA 97,000 lbs Six Axles State Decides Good for Safety, Economy, Environment, Drivers & Shipper/Carrier State Anti-Indemnification Statutes Over 25 states have adopted laws that void indemnification clauses in motor carrier contracts Some statutes void any indemnification for intentional, reckless or negligent acts as against public policy (e.g. PA) Others restrict indemnification by the trucker for the shippers negligence (e.g. Alabama)

26 Regulation Affecting Transportation - Motor Litigation Update Clean Trucks Program The purpose of CTP is to decrease emissions from diesel fuel trucks through phase out of older trucks and retrofits but the plan extends beyond environmental issues and includes economic regulation of the trucking industry Appeals Court overturned lower courts decision on the requirement of concession employees (LA Port) only a victory for the ATA. LA Port will not appeal.

27 Preparing for the Immediate Demand Supply Strategy Staff Future Hang On!

28 Don t Be a Blocker! Get Involved!!

29 THANK YOU! Q & A Wayne Johnson, Manager Global Carrier Relations, Owens Corning