CSX Montreal Expansion Ohio Conference on Freight September 2013
CSX has a 125 year history in Québec Company Overview America s first railroad Founded 1827, headquartered in Jacksonville, FL CSX in Québec St. Lawrence and Adirondack Railway Company (1888) Largest rail network in east 21,000 route miles in 23 states, serving 70 ports New York Central and Hudson River Railroad (1898) Significant resources Over 4,000 locomotives, 70,000 freight cars, 30,000 employees Conrail (1976) Fortune 500 Company $11.8 billion of revenue in 2012 CSX Transportation (1999), Beauharnois (2011) 2
Intermodal industry volume has steadily grown North American Intermodal Volume (1980 2012) Units in Millions Volume has increased more than four-fold 14.6M 3.1M 1980 1986 1992 1998 2004 2010 Source: AAR, Intermodal Association of North America, TTX 3
Trucking challenges encourage modal conversion Decreasing Driver Supply Regulatory restrictions Aging driver population Quality of life challenges Increasing Highway Congestion Projected U.S. freight increases Aging highway and bridge infrastructure Significant public funding gap Fuel Cost Rising diesel prices Alternate fuel sources require major investment 4
Shippers striving for cost savings and sustainability 2011 Logistics Cost Breakdown Transportation 63% Carrying Costs 23% Companies implementing strategies to achieve savings Supply chain simplification Near-sourcing of manufacturing Use of optimization software Alternate transportation mode use Warehousing Administration Other 4% 1% 9% Corporate sustainability initiatives gaining visibility Rail is the most fuel efficient form of ground transportation Intermodal well positioned to deliver both 5 Source: CSCMP 2012 State of Logistics Report
CSX investments support intermodal growth Expansion Projects Charlotte Detroit Columbus Worcester Terminal Development Louisville Winter Haven Valleyfield Clearance Projects New England Trenton Line National Gateway Existing Terminals Expansion Projects New Terminals Clearances 6
New Valleyfield terminal located in Quebec, Canada Regional Fact Sheet Greater Montreal population of 3.9 million Main sectors include Aerospace, Technology, Health Sciences Over 600,000 addressable annual truckloads Proximity to key expressways: Autoroutes 20, 30 and 40 Port accessibility Terminal will provide access to Canadian distribution and consumption markets Completion set for 2015 Located in Perron Industrial Park Terminal to serve both domestic and international customers 100,000 annual load capacity Unique, strategic connectivity enabled by Northwest Ohio hub terminal Including Southeast and Florida access 7
Hub capability enables Montreal market entry Montreal Connectivity Chicago NWOH Hub Enabled Lanes Point-to-Point Lanes Florida Montreal PANYNJ Baltimore Portsmout h Charleston Montreal Service Offerings # of Lanes Point-to-Point Lanes 4 Point-to-Point and Hub- Enabled Lanes 85%+ of service offerings enabled through hub capability 30 Point-to-point routings include Chicago and NY Hub enabled markets include Jacksonville, Orlando Charleston, Savannah, Atlanta, Portsmouth, Philadelphia, Baltimore, Chambersburg, Los Angeles, San Bernardino, Seattle, and Mexico Unique network design provides differentiated market access 8
Major markets for Montreal intermodal growth Montreal Shipper access to key Canadian distribution and consumption markets Connectivity to Ohio Valley and Southeast United States Helps shippers capture NAFTA growth potential North American Surface Transportation Trade up 7% Strategic connectivity enabled by Northwest Ohio terminal Accelerating cross-border highway-to-rail (H2R) conversions Interline International Attract West Coast international and land bridge traffic. East Coast International Divert NY Port truck traffic by providing a truck competitive transit time. Interline Domestic Leverage rail assets to convert truck traffic to western US and Mexico markets. CSX Core Domestic Connect Québec with Southeast and Midwest to convert truck traffic.
New intermodal opportunities between Montreal and the Ohio Valley Serviceable Markets in the Ohio Valley (700-1000 miles) Ohio: Columbus, Cincinnati, Dayton Indiana: Indianapolis, Evansville, Elkhart Kentucky: Louisville, Lexington Other: St. Louis, Nashville Three day intermodal transit Ohio Valley traffic estimate is 80% southbound 10
CSX intermodal expansion in Montréal Valleyfield Terminal, Québec, Canada Planning Preliminary Design 2011 Final Design & Permitting 2012 Construction 2013-2014 Project Operational 2015 11
Infrastructure, commercial projects support presence To Ottawa Valleyfield Beauharnois 10 Miles Regional beltway expansion (Autoroute 30 opened Dec. 2012) Industrial park development Strategic investments Future integrated logistics centers (Hub 30 & Les Cèdres) Port of Montreal future expansion on south shore 12
Terminal, local rail, Massena Line investment vital New Terminal Current Mainline CSX will abandon 13
Working to create a seamless border crossing Canadian customs clearance in Valleyfield Operation similar to Beauharnois s, but larger Integrate Valleyfield into the Beyond the Border initiative U.S. Canada initiative designed to facilitate cross border trade Address US border crossing security & efficiency Coordination between CSX and Shippers, as well as with and between US and Canadian border security agencies Long-term objective is freight pre-clearance in Valleyfield 14
15 Valleyfield development is on schedule