RAIL TRANSPORTATION OF FINISHED VEHICLES

AAR DP & FC CONFERENCE

JUNE 2013

Industry Committees

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MPEC AILSC

SEFCC

VEQ TIPT MUAR Reload

Railroad/OEM Committee Structure

MULTI-LEVEL POOLING EXECUTIVE COMMITTEE - MPEC

The Multi-Level Pooling Executive Committee is accountable for managing an efficient/time-responsive forum for resolving automotive industry transportation and distribution requirements.

AUTOMOTIVE INDUSTRY LOGISTICS STEERING COMMITTEE - AILSC

The Automotive Industry Logistics Steering Committee comprised of auto manufactures that transport motor vehicles by rail and focus on resolving automotive industry transportation and distribution concerns.

SPECIAL EQUIPPED FREIGHT CAR COMMITTEE - SEFCC

The Special Equipped Freight Car Committee is made up of Railroad mechanical representatives charged with developing and maintaining specifications and standards of specially equipped rolling stock including multi-levels.

VEHICLE AND EQUIPMENT QUALITY TASKFORCE - VEQ

The Vehicle and Equipment Quality Task Force is responsible for the prevention and elimination of rail related damages to motor vehicles and improving equipment cycle time.

RELOAD STEERING COMMITTEE

Reload Steering Committee - Distribute empty multilevel equipment in order to achieve greater efficiency consistent with equitable treatment of participating railroads, satisfy customer and public needs, and minimize unproductive empty time, car mileage, and unproductive fleet investment.

Demand will be satisfied in a manner that achieves optimal railcar utilization consistent with equitable treatment of participating railroads and shippers.

Distribute multi-level cars to meet shippers’ loading requirements.

TRANSIT IMPROVEMENT PROCESS TEAM - TIPT

Create/Optimize Capacity Improve Multilevel Velocity Loaded Transit and Queue Empty Transit and Queue Accelerate Bad Order Repairs Mutual Accountability / Shippers and Rail Service Providers

MEXICO U.S. AUTOMOTIVE RAIL TASK FORCE - MUAR

Continuously improve the automotive rail process for Mexico related shipments to drive timely and damage free transportation of finished vehicles while facilitating the supply of empty multi-levels & railroad infrastructure to support Mexico demand.

Vehicle & Equipment Quality Task Force

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MISSION The VEQ is responsible for the elimination of rail related damage to motor vehicles and improving equipment cycle time.

Provide rail industry and auto manufacturers a forum to effectively discuss quality & safety issues surrounding the rail shipment of finished vehicles

Establish railcar requirements Establish vehicle securement system requirements Establish & monitor damage reduction initiatives Support technology for monitoring in-transit performance Initiate corrective action on high-damage corridors

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MAJOR ACTIVITIES

Explore equipment bad order cycle time improvement opportunities

Oversee AAR Quality Review audits at origin and destination facilities

Oversee testing of rail equipment requirements, including securement systems, paint contamination, ride quality, end doors, and cushioning

Produce quarterly industry vehicle damage statistics

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KEY METRICS Rolling 12 Month Damage Free Frequency is

consistently greater than 99.6% Audit Scores – Through Q1 2013

Origin 97.30% vs. 96% goal Destination 98.17% vs. 97% goal

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VEQ Technical Advisory Groups (TAG)

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LOW-PROFILE CHOCK IMPLEMENTATION

Joint TAG with SEFCC Measured the 8 critical zones on 123 different vehicles Measured all conditionally approved chocks

o Recommendation to SEFCC - sunset SCT co-polymer and clones Chocks 5.75 inches and greater 35.5% of fleet (approx. 5000 rail cars)

Recommendations on low pro chock definition and specifications due at next VEQ o Template of measurements to qualify as low-pro o Exploring changes to M990 with respect to overall chock height under load

Developing implementation plan

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JUMPED CHOCK INITIATIVES Develop data collection plan to enable shared chock

jump data for root cause and trend analysis Manufacturers donation of new model test vehicles Develop Comprehensive Plan for Testing at TTCI –

modify S810 Higher impact speeds and anvil weights – SEFCC approved Add VTU requirement – SEFCC approved Testing with new donated vehicles Filling all decks on multi-level during testing Real world chock application versus perfect test environment

application

Training on application and use of new chocks

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CAREFUL CAR HANDLING

17 multi-levels Lat-Lon equipped to measure ride quality

917,938 Miles logged 2G: Events = (0.009%) 1.5G: Events (0.046%) No Chock Jumps Reported on Monitored Multi-Levels

Exploring options to correlate damage data with impacts, if any

Data can be used to determine proper load limiter strap strength on chocks

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CYCLE TIME IMPROVEMENT OPPORTUNITIES

Pre-Trip Facilities Mapped 78 existing facilities and capabilities MAP Need to define level 1 - 3 capabilities Look at expanding current capabilities Look at TTX ability to distribute targeted multi-levels to closest

appropriate pre-trip facility

Multi-level Rust Acceptance Standard Establish a list of approved locations for scraping, painting and

inverted channel repair Cost of any work done will be car owner responsibility Combine with pre-trip facility map and capabilities Analyze for expansion

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VEQ UPDATE - AILSC

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Mike Nelson Toyota Logistics Services, Inc.

National Manager – Rail Strategy & Operations

AILSC Automotive Industry Logistics Steering Committee

A collaborative effort by the Automotive Industry OEM’s in the U.S. to improve the final delivery process of finished vehicles.

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AILSC

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Executive Committee (EC)

Chairman

Steve Tripp Chrysler

Mexico-U.S. Rail

Task Force (MUAR)

Chairman

Brian Burkhart General Motors

Reload Steering

Committee (Reload)

Chairman

Larry Strug Subaru

Vehicle & Equipment Quality Task Force

(VEQ)

Chairman Mike Nelson

Toyota

Vehicle Highway Transport Task Force

(VHTTF)

Chairman BJ Alicandro

Chrysler

Ken Fletcher Executive Director

Bob Weinbaum Legal Counsel

Transit Improvement

Process Team (TIPT)

Bill Mikkeksen

Ford

AUTOMOTIVE RAIL NETWORK – CIRCA 1960

Long Beach San Diego

Mexico

Portland

Denver Kansas City

Houston

Chicago

Canada

Dallas/Ft Worth

Seattle

San Francisco

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NA AUTOMOTIVE RAIL NETWORK - 2013

Long Beach San Diego

Portland

Denver Kansas City

Houston

Chicago

Canada

Dallas/Ft Worth

Seattle

San Francisco

Vancouver Winnipeg

Montreal

Mexico

Halifax

Newark

Baltimore

Jacksonville

New York Boston

Miami

Toronto

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AUTOMOTIVE SHARED FLEET

• Managed by TTX • Specialized Multilevel rail cars

• Bi-level – Pickups / SUV’s • Tri-level – Cars

• Approximately 50,000 Multi-levels in fleet • Fleet sizing by individual OEM based on shipping

forecasts • Automotive fleet “Key Performance Indicators”

• Transit on time performance • Quality – Damage incurred while in rail transit

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THEN TO NOW!!

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SHIPPER RESPONSIBILITY

OEM Involvement in Solution • Accurate TTX Forecasting

•Annual “Strategic” Forecast – HQ (2 years out) •2 week “Tactical” Forecast – Field Ops

• Proper blocking at load out • Improved communication

•Holds •Launches •Special requirements

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AILSC & VEQ Key Initiatives – Damage Prevention & Quality Establish rust standards for multi-levels Reduce “bad order” down time Support field repair vs home shop repairs Mexico production growth Contribute to railcar cycle time improvement Encourage flexibility in railcar design

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DAMAGE DURING PEAK VOLUME CYCLES

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12/31/2012

AUTOMOTIVE MULTI-LEVEL

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QUESTIONS?

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