copyright © 2016 ttx company. confidential: not for ... presentations spring 2018... · »ttx is...

David Sellers, Assistant Vice President Automotive

April 19, 2018

Tying it all Together – Asset Utilization


TTX Overview

TTX functions as the industry’s railcar cooperative, operating under

pooling authority granted by the Surface Transportation Board

»$1.5 billion company, serves/owned by North America’s leading railroads

»TTX owns/maintains a national pool of over 230,000 railcars/wells:

»Owners enjoy financial/operational benefits matched to business needs:

»Rail customers benefit from a consistent fleet of free-running cars

»TTX is not a leasing company – TTX is a pooling company

o Intermodal o Automotive o General Merchandise

o Capital outlay eliminationo Empty mile reduction o Risk mitigation

http://www.bnsf.com/

http://www.cn.ca/


Today’s Agenda

»Railcar Pooling

▪ National Pools

▪ Agency Pools

»Railcar Standardization

»Signs of Life

4

Railcar Pooling


Copyright © TTX Company. Confidential: Not For Distribution

Common Characteristics and Benefits of National Pooling

Characteristics

» Fleet is sized and placed in a nationwide pool for use by a network of customers with a similar product

» Entails the shared use of similar equipment and management processes across a nationwide area

» Managed jointly under common set(s) of rules, typically by a single committee or operator

Benefits

» Cars are able move and interchange freely between multiple participants

» Facilitates cost reduction

▪ Fewer Empty Miles

▪ Less Switching Required

▪ More Capacity

▪ Reduced Capital / Car Hire

▪ Less Congestion

» Higher degree of car quality

6



Pooling Example: Multilevel Distribution Before Pooling

» Railroads maintained ‘X’ number of railcars, used exclusively by each of their originating shippers

» Railcars assigned individually, by railroad, to shipper-specific automotive production plants

» Once unloaded, railcars were reverse-routed back to origin

» Increased car mileage, longer transit times, and overall higher operating costs

» Required a larger fleet size and higher levels of investment / capital expenditure

7



Pooling Example: Current Multilevel Pooling

» Multi-level railcars combined into one common pool

» Shared for use among auto shippers

» Distributed by railroads’ fleet distribution and car management teams

» National multi-level pool, managed by TTX Reload

» Provides for centralized distribution of a shared fleet of 60,000+ multi-level railcars

» Requires smaller fleet size capable of handling more loadings, higher volumes

8


TTX Reload Network

Note: Hypothetical/ for Illustrative Purposes Only



Pool Efficiency - Multilevels

Pooled assets perform 17.5% more efficiently than assets in non-pooled service on average

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Reload Pool Avg: 67.56%

Without Pooling: 50% Numbers based

on a June 1 –

December 31,

2017 study


Empty Return Percentages by Car Type and Pool

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Pooled Boxcar

Private Car

Multilevel Pool

Intermodal Pool

Agency/Commodity Pooling



Agency/Commodity Pooling – Scrap Customers in Newark

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» Common Commodity - Scrap

» Common Car Type – 52’ Gondola

» Close Proximity – Newark

Characteristics Benefits

» Cars are able move between multiple customers

» Balanced Risks for Customers

» Facilitates cost reduction

Standardization and Efficiency

14



Boxcars – How Specialization Hurts Fleet Efficiency

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Lengths

▪ 40’

▪ 50’

▪ 52’

▪ 60’

▪ 86’

Dimensions

(Plate)

▪ B

▪ C

▪ E

▪ F

▪ G

Door(s)

▪ Single Plug

▪ Double Plug

▪ Slider

▪ Slider/Plug

Other Stuff

▪ Cushioned

▪ Rigid

▪ Grade

▪ Vented

▪ Insulated

▪ Bulkheads

40’ Cement 86’ Autoparts



Boxcars – Standardization

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50’ Boxcar

• 70 ton capacity

• Plate C

• Rigid or Cushion

• Plug Door

50’ High Cube Boxcar

• 100 ton capacity

• Plate F

• Cushion

• Single Plug Door

60’ High Cube Boxcar

• 100 ton capacity

• Plate F

• Cushion

• Double Plug Door


Signs of LifeIn a Dismal Market

» Car Types in Demand:

• Covered Hoppers

• Intermodal

» Coming Back:

• Boxcars

• Mill Gondolas

• Aggregate

» Not Yet or Maybe Never:

• Centerbeams


Avg. Daily Rates: Rental Car* vs. Leased Railcars+

Compact Car:

$30.98/Day

Intermediate Car:

$32.98/Day

Standard Car:

$34.97/Day

Full Size Car:

$49.97/Day

Intermediate SUV:

$44.97/Day

Standard SUV:

$84.97/Day

Boxcar 70 Ton:

$12-$15/day

Gondola:

$15/day

Bulkhead Flat:

$18-$21/day

Centerbeam:

$10-$12/day

Covered Hopper:

$11-$18/day

Boxcar 100 Ton:

$27/day

*Avg. Rates: Enterprise Holdings-Chicago Loop Branch

+Avg. Industry Lease Rates

copyright © 2016 ttx company. confidential: not for ... presentations spring 2018... · »ttx is...

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