Association of Car Accounting & Car Service Officers

May 8, 2008

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TrackageRights

TrackageRights

InterlineFreight (Bridge Traffic)

InterlineFreight (Bridge Traffic)

HaulageHaulage vs.vs.

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Interline Freight – traffic transported by crew, locomotives, equipment and track, in the account of the revenue waybill carrier

Interline Freight – traffic transported by crew, locomotives, equipment and track, in the account of the revenue waybill carrier

Definition

Train Haulage – traffic transported by crew and track of foreign carrier, but with locomotives and equipment in account of revenue waybill carrier.

Train Haulage – traffic transported by crew and track of foreign carrier, but with locomotives and equipment in account of revenue waybill carrier.

Trackage Rights – traffic transported by track of foreign carrier, but with crew, locomotives and equipment in account of revenue waybill carrier.

Trackage Rights – traffic transported by track of foreign carrier, but with crew, locomotives and equipment in account of revenue waybill carrier.

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Decision Core Drivers

Interline

Haulage Trk Rights

Service

Asset Utilization

Cost

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Decision Components

Marketing/Competition Traffic Volume Pricing/Cost

Service People Liability

Interline Freight Haulage Trackage Rights

Car HireAsset Utilization

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Haulage or Trackage Rights ?Haulage Trk Rights

Improved Service (Bridge Route) Yes Yes

Line Rationalization/Abandonment No Yes

Capacity Issues Yes Yes

Marketing Reach Yes No

Available Crews No Yes

Long Term Agreement Maybe Yes

Regulatory Approval No Yes

Car Load Traffic Yes No

Train Load Traffic Yes Yes

Cost Yes Yes

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Who’s Account and Responsibility (Typical)

Interline Haulage Trk Rights

Revenue Waybill RWC RWC RWC

Marketing/Pricing RWC RWC RWC

Loco/Fuel/HPH RWC RWC/FC RWC

Equipment RWC RWC RWC

Crew RWC FC RWC

Track/Dispatching RWC FC FC

Car Hire RWC RWC RWC

Liability RWC RWC/FC RWC

Car Repairs RWC RWC RWC

Revenue Waybill Carrier = RWC Foreign Carrier = FC

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Trackage/Haulage Rights

Receipt and Delivery of Traffic

Exclusivity

Compensation and Escalation

Traffic Restrictions

Maintenance

Management and Operations

Billing

Bad Orders

Disclosure

Liability and Indemnification

Typical Haulage or Trackage Rights Agt. Components

Hazardous Materials

Claims

Force Majeure/Acts of God

Third Party Beneficiaries

Regulatory Approvals

Arbitration

Abandonment

Assignment

Term

Default

Notices

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Resources/Other:

Available Capacity

Network Strategy

Available Crews

Competition

Other Negotiations

Considerations by the Foreign Carrier to granting rights:

Pricing:

Cost

OD Pair and Miles

Geography (Location)

Volume (Train vs. Car)

Slot Guarantee

Maintenance Guarantee

Market Conditions

Existing Agreements

Industry Standards

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Questions ??