CSX Intermodal Facility Elkridge / Hanover GECA Intermodal Committee April 21, 2011.
Intermodal TeamProductivity & Asset Utilization +60% from Productivity & Asset Utilization...
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Intermodal Team Joe Leppert
Transcript of Intermodal TeamProductivity & Asset Utilization +60% from Productivity & Asset Utilization...
Intermodal TeamJoe Leppert
Business DimensionsIntermodal - 2001 Revenue $1.9 BillionBusiness DimensionsIntermodal - 2001 Revenue $1.9 Billion
Domestic 49%
International 51%
Pacer28%
Steamship34%
CSXI8%
Premium6%
IMC /Truckload
24%Pacer28%
Steamship34%
CSXI8%
Premium6%
IMC /Truckload
24%
RevenueRevenue
Organizational StructureIntermodalOrganizational StructureIntermodal
Commercial
Finance
NetworkDesign
Operations
1999 2000 2001 20021999 2000 2001 20021999 2000 2001 20021999 2000 2001 2002
Contribution CAGR = 13%Contribution CAGR = 13%
Revenue CAGR = 4%Revenue CAGR = 4%
19991999 20002000 20012001 20022002
Total RevenueTotal Revenue Total ContributionTotal Contribution
Revenue and ContributionIntermodalRevenue and ContributionIntermodal
Business DriversIntermodalBusiness DriversIntermodal
Market
- Strong International Trade
- Domestic Economic Growth
Price
- Premium Products
- Capture Asset Value
Penetration
- New Chicago Facility
- Premium & Domestic
- Major Growth Lanes
Market
- Strong International Trade
- Domestic Economic Growth
Price
- Premium Products
- Capture Asset Value
Penetration
- New Chicago Facility
- Premium & Domestic
- Major Growth Lanes
Business Development InitiativesIntermodalBusiness Development InitiativesIntermodal
• Strategic Partnerships
• Mexico Market
• Market Research Initiatives
– Lane Balance Opportunities
– Non-Seasonal Baseload Customers
– Non-Peak Vs. Peak
• Growth in Major Lanes
• Strategic Partnerships
• Mexico Market
• Market Research Initiatives
– Lane Balance Opportunities
– Non-Seasonal Baseload Customers
– Non-Peak Vs. Peak
• Growth in Major Lanes
Major Growth LanesMajor Growth Lanes
L.A. to MemphisL.A. to Memphis
L.A. to New OrleansL.A. to New Orleans
Oakland to ChicagoOakland to Chicago
Chicago to L.A.Chicago to L.A.
Chicago to MexicoChicago to Mexico
Chicago to PortlandChicago to Portland
Major LanesMajor Lanes
Cost Advantagevs. Truck
Cost Advantagevs. Truck
Market Size($ Billions)
Market Size($ Billions)
$1.5$1.5$0$0 50%50%0%0%
Oakland
MemphisLosAngelesLosAngeles
Chicago
New Orleans
HoustonHouston
Dallas
Major LanesIntermodalMajor LanesIntermodal
PortlandPortland
MexicoMexico
Margin Improvement TargetIntermodalMargin Improvement TargetIntermodal
0
25
50
75
100
PricePrice Volume& Mix
Volume& Mix
DoubleStack
DoubleStack
TrainLengthTrain
LengthHP/TTHP/TT OtherOther
(%)(%)
+40% fromRevenueGrowth
+40% fromRevenueGrowth
+60% fromProductivity
& AssetUtilization
+60% fromProductivity
& AssetUtilization
DriversDrivers
Intermodal TeamJohn Newman
ContributionIntermodalContributionIntermodal
ProductivityProductivity
20002000 20012001 20022002
VolumeVolumeMargin Im
provement 57%
Margin Improvement 57%
PricePrice
ProductivityProductivity
VolumeVolume PricePrice
L.A. to Houston/New OrleansIntermodalL.A. to Houston/New OrleansIntermodal
So. CalifSo. CalifNew OrleansNew Orleans
HoustonHouston
20002000 20022002
Margin ImprovementMargin Improvement
+82%+82% • Day-of-Week
Rationalization
• Price Improvement
• Double Stack
Efficiency
• Network Redesign
• Day-of-Week
Rationalization
• Price Improvement
• Double Stack
Efficiency
• Network Redesign20012001
Lane by Lane Analysis
Lane ContributionIntermodalLane ContributionIntermodal
Trains by LaneDetail
Lane ContributionIntermodalLane ContributionIntermodal
Day-of-WeekDemand
Lane ContributionIntermodalLane ContributionIntermodal
Customer Detail
Lane ContributionIntermodalLane ContributionIntermodal
Scorecard - L.A. to Houston/New Orleans2002 versus 2001Scorecard - L.A. to Houston/New Orleans2002 versus 2001
Unfavorable FavorableUnfavorable Favorable
Avg. Revenue / Car
Volume
Fuel Price
Wage Inflation
Others
C-Rate
Slot Utilization
Double Stack
Horsepower/TT
Train Length
Others
Avg. Revenue / Car
Volume
Fuel Price
Wage Inflation
Others
C-Rate
Slot Utilization
Double Stack
Horsepower/TT
Train Length
Others
Lane Evaluation
Description
Units +4%
Revenue +5%
Revenue Per Car +1%
Traffic (% of Lane)
Domestic 31%
International 69%
Operating Statistics
Train Starts +3%
Loads Per Train +7%
Double Stack Percent +9%
Horsepower/Trailing Ton -7%
Train Length +2%
Lane Evaluation
Description
Units +4%
Revenue +5%
Revenue Per Car +1%
Traffic (% of Lane)
Domestic 31%
International 69%
Operating Statistics
Train Starts +3%
Loads Per Train +7%
Double Stack Percent +9%
Horsepower/Trailing Ton -7%
Train Length +2%
Co
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Co
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Pro
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Margin ImprovementMargin Improvement + 21%+ 21%- Decrease / + Increase- Decrease / + Increase
Change in ContributionChange in Contribution
Profitability ManagementIntermodalProfitability ManagementIntermodal
• Lane Organizational Structure
• Tactical Working Team
• Quarterly Lane Reviews
• Monthly Business Team Reviews
• Quarterly Senior Management Reviews
• Lane Organizational Structure
• Tactical Working Team
• Quarterly Lane Reviews
• Monthly Business Team Reviews
• Quarterly Senior Management Reviews
Intermodal TeamBarry Michaels
Operating InitiativesIntermodalOperating InitiativesIntermodal
Line-of-Road
– Train Frequency
– Train Size
– Slot & Stack Utilization
– Horsepower per Trailing Ton
Terminal
– Lift Productivity
– Dwell Time
– Gate Processing
Line-of-Road
– Train Frequency
– Train Size
– Slot & Stack Utilization
– Horsepower per Trailing Ton
Terminal
– Lift Productivity
– Dwell Time
– Gate Processing
Productivity / Efficiency MeasuresIntermodalProductivity / Efficiency MeasuresIntermodal
• Operational Drivers
• Network Redesign
– Day of Week Volume
– Customer Commitment Rationalization
– Business Rules - Annulments/Consolidations
• Operational Drivers
• Network Redesign
– Day of Week Volume
– Customer Commitment Rationalization
– Business Rules - Annulments/Consolidations
Train LengthFeet
Train LengthFeet
3,000
3,500
4,000
4,500
5,000
5,500
1999 2000 2001 20023,000
3,500
4,000
4,500
5,000
5,500
1999 2000 2001 2002
Productivity / Efficiency MeasuresIntermodalProductivity / Efficiency MeasuresIntermodal
Double Stack PercentDouble Stack Percent
79%79%
89%89%+13%+13%
19991999 20022002
• Operational Drivers
• Terminal Management
– Asset Utilization
• Containerization
• Car Type
• Operational Drivers
• Terminal Management
– Asset Utilization
• Containerization
• Car Type
Productivity / Efficiency MeasuresIntermodalProductivity / Efficiency MeasuresIntermodal
Lifts Per UnitLifts Per Unit
1.60
1.65
1.70
1.75
1999 2000 2001 2002
1.60
1.65
1.70
1.75
1999 2000 2001 2002
Operational Drivers
– On-Dock Operations
– Interchange Partners
Operational Drivers
– On-Dock Operations
– Interchange Partners
19991999 20022002
Terminal DwellDays
Terminal DwellDays
Productivity / Efficiency MeasuresIntermodalProductivity / Efficiency MeasuresIntermodal
2.772.77
2.372.37
-14%-14%
Operational Drivers
– Customer - Data Sharing
– Assessorial Collection
– Reduced Free Time
– Increased Storage Rates
Operational Drivers
– Customer - Data Sharing
– Assessorial Collection
– Reduced Free Time
– Increased Storage Rates
L.A. to Dallas/MemphisIntermodalL.A. to Dallas/MemphisIntermodal
So. CalifSo. Calif
Margin ImprovementMargin Improvement
+64%+64%
• Differentiated Product
• Interchange Partnerships
• Line-of-Road Productivity
• Differentiated Product
• Interchange Partnerships
• Line-of-Road Productivity
MemphisMemphis
DallasDallas
20002000 2002200220012001
Scorecard - L.A. to Dallas/Memphis2002 versus 2001Scorecard - L.A. to Dallas/Memphis2002 versus 2001
Unfavorable FavorableUnfavorable Favorable
Avg. Revenue / Car
Volume
Fuel Price
Wage Inflation
Others
C-Rate
Slot Utilization
Double Stack
Horsepower/TT
Train Length
Others
Avg. Revenue / Car
Volume
Fuel Price
Wage Inflation
Others
C-Rate
Slot Utilization
Double Stack
Horsepower/TT
Train Length
Others
Lane Evaluation
Description
Units +24%Revenue +20%
Revenue Per Car -3%
Traffic (% of Lane)
Domestic 35%
International 65%
Operating Statistics
Train Starts +12%
Loads Per Train +11%
Double Stack Percent +4%
Horsepower/Trailing Ton -3%
Train Length +11%
Lane Evaluation
Description
Units +24%Revenue +20%
Revenue Per Car -3%
Traffic (% of Lane)
Domestic 35%
International 65%
Operating Statistics
Train Starts +12%
Loads Per Train +11%
Double Stack Percent +4%
Horsepower/Trailing Ton -3%
Train Length +11%
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Margin ImprovementMargin Improvement + 13%+ 13%- Decrease / + Increase- Decrease / + Increase
Change in ContributionChange in Contribution
Future Margin InitiativesIntermodalFuture Margin InitiativesIntermodal
• Increase Train Length
• Reduce Terminal Gate Processing Time
• Reduce Lifts per Unit Handled
• Price Improvement
• Truck-Like Fuel Price Recovery
• Increase Train Length
• Reduce Terminal Gate Processing Time
• Reduce Lifts per Unit Handled
• Price Improvement
• Truck-Like Fuel Price Recovery
0%0% 1%1% 2%2% 3%3% 4%4% 5%5% 6%6% 7%7%
TOTALTOTAL
IntermodalIntermodal
Industrial ProductsIndustrial Products
EnergyEnergy
ChemicalsChemicals
AutosAutos
Ag ProductsAg Products
Revenue Growth PotentialIntermodalRevenue Growth PotentialIntermodal
GD
PG
DP
Union Pacific
