Union Pacific RailroadFuture Car Accounting ProcessUnion Pacific RailroadFuture Car Accounting Process

Linda Newell - Gen Dir ECommerce, Mike Carmichael - Sr Mgr Car Acctg, Lori Wies - Mgr Car Acctg

May 8, 2008

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Car Accounting is not known for moving at breakneck speed

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Car Accounting is known for setting plenty of rules to follow

In LCSWe Trust

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Following them to the letter

Well Maybe Not

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Then looking back and saying “What” went wrong

How doI Fix This?

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Well, we’ve kind of done that with LCS

Use LCS to Validate Claims

LCS Interchange TimesTake Precedence

Apply TOL’s

Pay Car Hire

Rece

ive Paymen

t

Partially

Based on LCS

Send

out

Cla

ims

Apply LCS

to Operating System

Rec

eive

LCS M

essa

ges

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Future Car Accounting Process

• UPRR problems with car accounting system

• Development of new system based on LCS liability file from Railinc

• System Implementation – Interim results

• Potential enhancements

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Union Pacific – Problems with LCS

• Union Pacific’s old system applied LCS messages to internal car cycles

– Messages not applied to correct cycles

– No cycle found

– Received LCS changes only

• LCS messages queued for manual processing

• Caused both over and under payments

• Overpayments were never recovered

• Underpayments resulted in claims worked manually

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Union Pacific – Problems with Rule 5 TOL messages

• UPRR created Rule 5 TOLs from internal car cycles

• Interchange times on internal car cycles only updated with LCS change messages

• Received a daily average of 51 Train 58 messages that were worked manually (rejected TOLs)

• Resulted in car hire claims

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Solution: Equipment Liability System (ELS)

• ELS Objectives

– Create accurate payments for foreign equipment

• Payments based on exact LCS liability

• Eliminate all claims from foreign roads

– Accurate claims for UPRR owned equipment

• Increase receivables

• Eliminate inaccurate claims

• Decrease manual effort to resolve disputed claims

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ELS Phase 1 - January 2007

• Collaborated with Railinc to create an equipment liability file based on LCS messages

– Received online events and hours for foreign and TTX equipment

– Received online and offline events for UPRR owned equipment

• Created database to house equipment liability file

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ELS Phase 1 – Interim Process

• Compared equipment liability file with internal event and payment data to identify differences

– Analyzed differences during system development

– Identified specific data issues/requirements

– Identified Internal / external LCS issues

– Presented LCS issues to the LCS TAG

• Adjusted car cycles to mimic Railinc file for both foreign and UPRR owned equipment

– 45% reduction in foreign claims received

– Reduced system claims created by 55% (claims that were not supported by LCS)

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ELS Phase 1.1 - September 2007Rule 5 TOL messages• UPRR created daily switch bill file to send to Railinc

• Railinc created and sent out Rule 5 TOL messages based on LCS validated interchange times

• Results

– Significant reduction in Train 58 rejection messages

– Accurate Rule 5 TOLs

– Eliminate TOL claims

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ELS Phase 2 - February 2008 (December account month)• Created foreign payment based on Railinc liability

file

– Tied miles from cycles in old system to liability units

– Created exchange file based on Railinc liability and mile file

– Defined and implemented web screens to process claims and adjustments

• Expected results

– Reduced foreign claims received

– Reduction of 3 full-time equivalents

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ELS Phase 3 – April 2008 (December account month)• Generated system claims from Railinc liability file

– Email claims to recipients

– Enhanced claim accuracy

– Added additional detail to user records

– Defined and implemented web screens to view offline liability and make adjustments on system claims

– Reduced manual work for declined claims

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ELS – Potential Enhancements

• Allow foreign railroads to access ELS to retrieve copies of claims

• Ability for foreign roads to dispute/decline claims online

• Electronic exchange of claim information for systematic match of data

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Questions?