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Robert E. Martínez Norfolk Southern Corporation. Indiana Logistics Summit Indianapolis November 14, 2006. Markets, Transportation Markets, Market Change and Transportation Policy; and The Economics of Rail. Railroads are Highly Capital Intensive.
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Robert E. MartínezNorfolk Southern Corporation Indiana Logistics Summit Indianapolis November 14, 2006
Markets, Transportation Markets, Market Change and Transportation Policy;andThe Economics of Rail
Railroads are Highly Capital Intensive Source: JPMorgan Estimates and Company Reports.
Capex/Revenue in Industrial Sectors Source: JPMorgan Estimates and Company Reports.
The railroad industry has not been earning its cost of capital
NS Principles on Public/Private Partnerships • No safety degradation • Voluntary on both sides • Public sector pays for public or societal benefits • Norfolk Southern pays for railroad benefits • Benefits, costs and risks are shared proportionately
NS Principles on Public/Private Partnerships (cont’d) • NS commits to performance standards in return for public participation • Planning must be coordinated among all stakeholders to ensure prudent investments • Planning must be executed in a manner consistent with rail regulatory requirements, ownership rights, and market conditions • The project must produce a more balanced transportation policy
NS Business Mix by RevenueQ3 05 – Q2 06 Revenue: $9.107 Billion
Long Term Conventional Intermodal Volume Growth Y-T-D 2006 vs. Y-T-D 2005
Chicago -Ashland Ave. Hub Harrisburg - Rutherford Hub Atlanta-Austell Hub Intermodal Network 33 NS Terminals 19 Private / Port Terminals 8,300 Route Miles
Hub and Spoke Network – how it works - (From PNW) (From So-Cal) (From So-Cal) 33 NS Terminals 19 Private / Port Terminals 8,300 Route Miles
Ports of Seattle and Tacoma Boston Buffalo Albany Detroit New York Cleveland Chicago Oakland/ Richmond, CA Philadelphia Pittsburgh Baltimore Columbus Cincinnati Norfolk Louisville Los Angeles, San Bernardino, Ports Charlotte Clovis, NM Memphis Huntsville Atlanta Charleston El Paso Dallas Savannah Jacksonville Union Pacific Burlington Northern Santa Fe Norfolk Southern Kansas City Southern Miami Norfolk Southern IntermodalTranscon Network
Montreal Toronto Elizabeth Marine Terminal Detroit Chicago Cleveland Pittsburgh Columbus Norfolk / Ports of Hampton Roads Kansas City Cincinnati St. Louis Louisville Charlotte Memphis Huntsville Atlanta Charleston Savannah Birmingham Miami Jacksonville Dallas New Orleans East Coast Port Services
The Norfolk Southern Intermodal System Map Doublestack Clearances
Central Corridor Double-Stack Project: The current clearance envelope through western Virginia, West Virginia and Kentucky only accommodates railcars up to 19’1” multi-levels. No double-stack cars can be accommodated due to the height, as well as the square profile of the conveyance.
Heartland Corridor Chicago Cleveland Harrisburg Columbus Prichard Kenova Roanoke The Port of Virginia
To Chicago, Detroit, & Points West OH Columbus Rickenbacker Ashville WV Washington, DC Portsmouth VA Huntington Kenova Prichard Richmond Williamson Welch KY Roanoke Petersburg Bluefield Christiansburg Portsmouth The Heartland Corridor 664 NIT CIMT(Proposed) CIDMMA Norfolk APM 164 Portsmouth PMT 264 664 264 464 CRMSRP Project (Median Rail)