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Central Indiana Intermodal Service

Central Indiana Intermodal Service. Growth and Network Expansion Opportunities for BNSF February 12, 2008. Indiana’s Intermodal Team. Here to make the case for run-through service to CSX Avon State: IEDC Ports of Indiana INDOT Regional Indy Partnership Conexus Indiana. Industry:

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Central Indiana Intermodal Service

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  1. Central Indiana Intermodal Service Growth and Network Expansion Opportunities for BNSF February 12, 2008

  2. Indiana’s Intermodal Team Here to make the case for run-through service to CSX Avon State: • IEDC • Ports of Indiana • INDOT Regional • Indy Partnership • Conexus Indiana • Industry: • Browning Investments • Duke Realty Corporation • TJX Corporation 4

  3. Goal: Enhance Accessto Global Markets Indiana recognizes: • Intermodal connections are keyto global competitiveness • Intermodal logistics parks arethe trade hubs of the future • West Coast connection critical to Indiana • BNSF is the premier intermodal carrier and the preferred service provider 5

  4. Value Proposition for BNSFOpportunity for growth Run-through service from LA/LB ports to CSX Avon Yard benefits BNSF: • Significant growth of headhaul & backhaul volume • Minimal CAPEX and operating risk • “Plug and play” logistics park located in a premier distribution location • Complements existing network & Chicago ramps Avon provides strategic advantage for BNSF 6

  5. Proposed Service Solution Run-through service to Avon from LA • Connect to CSX in St. Louis • Possible mix with domestic (Clovis) • 5-day a week frequency in both directions Key Assumptions: • Economics work for carriers & shippers • CSX agrees to trackage & terminal deals • Operational issues are manageable 7

  6. Growth Drivers for BNSF Central Indiana: Best location to serve greatest number of consumers, producers & exporters • Median center of U.S. population • Same-day delivery to over 50% of U.S. population • Heart of manufacturing, agriculture, hardwood production • 15% of U.S. freight by value touches Indiana • 12% by tonnage • Indiana ranks 2nd in pass-thru tonnage, 5th overall • Least congested infrastructure • 5.3% peak congestion vs. 15.3% national average • “Major Moves” fully funds 10-year transportation plan 8

  7. Indiana: The OptimalDistribution Location Median Center of U.S. Population

  8. Distribution Growth Forecast

  9. Distribution Growth Forecast

  10. Indiana: Export &Manufacturing Powerhouse • Exports totaled $22.6 billion in 2006 • 1st in automotive manufacturing growth • 3rd in car/truck production by 2011 • 1st in manufacturing output per capita • 1st in value-added manufacturing • Honda building newest assembly plant in Greensburg, IN. • Only state with 2 Toyota production sites

  11. Indiana’s Manufacturing & Logistics Economy Source: PCRD using CEW data provided by the Indiana Business Research Center (IBRC)

  12. Indiana: Epicenterof U.S. Manufacturing 14

  13. Indiana: Automotive Centerof North America • Car/truck assembly plants within650 milesof Indianapolis • 84% ofNorth Americanauto production

  14. Manufacturing Locations

  15. Distribution Center Locations

  16. Recent Large BusinessInvestments in Indiana

  17. Intermodal FreightFlow Study Browning-Duke commissioned studyto estimate baseline internationalintermodal flows to Central Indiana • Conservative methodology combined best available data sources (Customs/US Census,Reebie Transearch) Findings: • 80% of Central Indiana’s containerized imports move through West Coast ports (predominantly LA/LB) • 150K-200K annual inbound (drayage) loads • Estimated value $5.5 billion • Likely a low figure based on pro-rata share of U.S. imports • Tremendous backhaul growth opportunities • 300K-400K annual two-way lift potential • Volume easily supports 5-day/week service 19

  18. CSX Avon Yard Located in heart of state’s largest distribution submarket • IM ramp can handle 100K annual lifts today • Current volume is approx. 30K lifts • Expansion to 300K lifts with modest CAPEX • Adjacent to AllPoints Midwest 930-acre (expandable)world class logistics park • 12 million sq. ft of DC/light industrial space • Hendricks County has absorbed DC space faster than Alliance; 25M feet in 15 years 20

  19. CSX Yard AllPoints Midwest Hendricks County, IN World-Class Trade Infrastructure

  20. Indiana Proposal • “Take or Pay Train” arrangement - Minimize risk to BNSF • Conexus Indiana will organize Shippers Alliance & market service • Improvements to CSX Avon facility - Developers, local governments alreadyjointly planning improvements with CSX • State/Ports of Indiana support - Potential Incentives, Financing, Foreign-Trade Zone 22

  21. Going Forward • BNSF reaction • Commitment to evaluate concept • Plans for future dialogue • How do we move forward? Proposed Next Step: • BNSF invited to Indiana for meetingswith key leaders and tour of region

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