Upload
merilyn-stephens
View
217
Download
0
Tags:
Embed Size (px)
Citation preview
Robert E. MartínezRobert E. MartínezNorfolk Southern CorporationNorfolk Southern Corporation
Indiana Logistics SummitIndiana Logistics Summit
IndianapolisIndianapolis
November 14, 2006November 14, 2006
Markets, Transportation Markets, Transportation Markets, Market Change and Markets, Market Change and
Transportation Policy;Transportation Policy;andand
The Economics of RailThe Economics of Rail
Railroads are Highly Capital Railroads are Highly Capital IntensiveIntensive
Source: JPMorgan Estimates and Company Reports.
5 Yr Average 2006EBNI 16% 13%UNP 15% 15%CSX 16% 18%NSC 12% 12%CNI 17% 19%CP 18% 18%Rail Average 16% 16%
Truckload Average 12% 11%
LTL Average 8% 13%
Parcel Average 7% 7%
Logistics Average 2% 1%
Capex as % of Revenue
Capex/Revenue in Industrial Capex/Revenue in Industrial SectorsSectors
Source: JPMorgan Estimates and Company Reports.
Sector 3 Yr Average 2006E
Auto 4.0% 4.0%
Forest Products 7.0% 6.7%
Chemicals 4.4% 4.7%
Metals and Mining 6.5% 8.4%
The railroad industry has not The railroad industry has not been earning its cost of capitalbeen earning its cost of capital
Source: Surface Transportation Board
0%
4%
8%
12%
16%
20%
'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04
Cost of Capital
Return on Investment
NS Principles on Public/Private NS Principles on Public/Private PartnershipsPartnerships
No safety degradationNo safety degradation Voluntary on both sidesVoluntary on both sides Public sector pays for public or societal Public sector pays for public or societal
benefitsbenefits Norfolk Southern pays for railroad benefitsNorfolk Southern pays for railroad benefits Benefits, costs and risks are shared Benefits, costs and risks are shared
proportionatelyproportionately
NS Principles on Public/Private Partnerships NS Principles on Public/Private Partnerships (cont’d)(cont’d)
NS commits to performance standards in NS commits to performance standards in return for public participationreturn for public participation
Planning must be coordinated among all Planning must be coordinated among all stakeholders to ensure prudent investmentsstakeholders to ensure prudent investments
Planning must be executed in a manner Planning must be executed in a manner consistent with rail regulatory requirements, consistent with rail regulatory requirements, ownership rights, and market conditionsownership rights, and market conditions
The project must produce a more balanced The project must produce a more balanced transportation policy transportation policy
NS Business Mix by RevenueNS Business Mix by RevenueQ3 05 – Q2 06 Revenue: $9.107 BillionQ3 05 – Q2 06 Revenue: $9.107 Billion
Agriculture11%
Metals12%
Chemicals11%
Automotive11%
Intermodal21%
Coal25%
Paper9%
Long Term Conventional Intermodal Long Term Conventional Intermodal Volume GrowthVolume Growth
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
2000 2001 2002 2003 2004 2005 2006 Jan-Oct
(4.0%)
(2.0%)
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
U.S. & Canada Volume % Growth
Y-T-D 2006 vs. Y-T-D 2005
33 NS Terminals
19 Private / Port Terminals
8,300 Route Miles
Chicago -Ashland Ave. Hub
Atlanta-Austell Hub
Harrisburg - Rutherford Hub
Intermodal Network
33 NS Terminals
19 Private / Port Terminals
8,300 Route Miles
Hub and Spoke Network
– how it works -
(From So-Cal)
(From So-Cal)
(From PNW)
Charlotte
Charleston
Savannah
Jacksonville
Miami
New York
Baltimore
Norfolk
Philadelphia
Oakland/Richmond, CA
Los Angeles,San Bernardino,Ports
Ports of Seattle and Tacoma
AtlantaHuntsville
BostonAlbany
Clovis, NM
Chicago
Union Pacific
Burlington Northern Santa Fe
Norfolk Southern
Kansas City Southern
Norfolk Southern IntermodalNorfolk Southern IntermodalTranscon NetworkTranscon Network
El Paso Dallas
Memphis
Buffalo
Columbus
ClevelandDetroit
Louisville
Cincinnati
Pittsburgh
Charlotte
Norfolk / Ports of Hampton Roads
East Coast Port ServicesEast Coast Port Services
ColumbusCincinnati
Louisville
Detroit
Toronto
Montreal
Dallas
Huntsville
Memphis
Birmingham
New Orleans
Pittsburgh
Cleveland
St. Louis
Kansas City
Chicago
Atlanta
Jacksonville
SavannahCharleston
Miami
Elizabeth Marine
Terminal
Fully C lea red D ouble S tackR outes on N S
Fully C lea red D ouble S tackR outes on C onnecting R a ilroads
Inte rm odal R ou tes w ith R estric tionsto S ingle S tack on C onnectingR a ilroads
Inte rm odal R ou tes w ith R estric tionto S ingle S tack
W ill B e C lea red fo r 19’3” (D oub le S tackIn one H igh -C ube & O ne Low -C ubeC onfigu ra tion
Term ina ls
Canada
New Orleans
Charleston
Savannah
Jacksonville
Miami
Atlanta
Columbus
Greensboro
FrontRoyal
Buffalo
Detroit
Louisville
Cincinnati
Memphis
KansasCity
St. Louis
Charlotte
Pittsburgh
New York/New Jersey
Philadelphia/Morrisville
Baltimore
Cleveland Harrisburg
Norfolk/Hampton Roads
Huntsville
Peoria
Toledo
Georgetown
Boston/Ayer
Taylor
Bethlehem
Dallas
AlexandriaDecatur
Toronto
Montreal
Waterville
Minneapolis
Binghamton
Meridian
Albany
Chicago
The Norfolk Southern Intermodal System Map
Doublestack Clearances
Central Corridor Double-Stack Project: Central Corridor Double-Stack Project: The current clearance envelope The current clearance envelope through western Virginia, West Virginia and Kentucky only accommodates railcars 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 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. height, as well as the square profile of the conveyance.
Columbus
The Port of Virginia
Harrisburg
Kenova
Prichard
Roanoke
Chicago Cleveland
Heartland Corridor
The Heartland CorridorThe Heartland Corridor
Portsmouth
Norfolk
664
664264
264
464
164
CIDMMA
PMT
NITNITNITNIT
APM
CRMSRP Project (Median Rail)CRMSRP Project (Median Rail)
CIMT(Proposed)
Columbus
Rickenbacker
Ashville
HuntingtonKenova
Prichard
WilliamsonWelch
Bluefield
RoanokePetersburgPetersburg
RichmondRichmond
Washington, DCWashington, DC
Christiansburg
Portsmouth
To Chicago, Detroit, & Points West
VA
OH
WV
KYPortsmouthPortsmouth
COMPONENTCOMPONENT LEGENLEGENDD
Central Corridor Double-Stack InitiativeCentral Corridor Double-Stack Initiative
Prichard Intermodal TerminalPrichard Intermodal Terminal
Roanoke Region Intermodal TerminalRoanoke Region Intermodal Terminal
Rickenbacker Intermodal TerminalRickenbacker Intermodal Terminal
Commonwealth Railway Mainline SafetyCommonwealth Railway Mainline SafetyRelocation Project (CRMSRP)Relocation Project (CRMSRP)