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

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Presentation on theme: "1. Central Indiana Intermodal Service Growth and Network Expansion Opportunities for BNSF February 12, 2008."— Presentation transcript:

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

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4 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

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

6 Value Proposition for BNSF Opportunity 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

7 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

8 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 2 nd in pass-thru tonnage, 5 th overall –Least congested infrastructure 5.3% peak congestion vs. 15.3% national average “Major Moves” fully funds 10-year transportation plan 8

9 Indiana: The Optimal Distribution Location 9 Median Center of U.S. Population

10 Distribution Growth Forecast 10

11 Distribution Growth Forecast 11

12 Indiana: Export & Manufacturing Powerhouse Exports totaled $22.6 billion in 2006 1 st in automotive manufacturing growth 3 rd in car/truck production by 2011 1 st in manufacturing output per capita 1 st in value-added manufacturing Honda building newest assembly plant in Greensburg, IN. Only state with 2 Toyota production sites 12

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

14 Indiana: Epicenter of U.S. Manufacturing 14

15 Indiana: Automotive Center of North America 15 Car/truck assembly plants within 650 miles of Indianapolis 84% of North American auto production

16 16 Manufacturing Locations Map IDName 1Royale Coach 2General Motors 3Delphi 4Isg Burns Harbor 5Accuride 6Evansville Bowing Association 7GE 8General Motors (Indianapolis) 9Rolls-Royce Corporation 10Autom0tive Components Holdings 11Hewlett-Packard 12Eli Lilly 13Wabash National Parts 14General Motors (Roanoke) 15Nappanee Wood Products 16Zimmer Holdings

17 17 Distribution Center Locations Map IDName 1Wabash National Parts 2AT&T 3Peyton’s Northern Distribution Center 4Monaco Coach 5Jayco 6Coachmen Recreational Vehicle 7Jasper Engine & Transmission Exchange 8Otis Elevator 9Phillips Products 10Incom Distributor Supply 11Pearson Education 12Whirlpool

18 Recent Large Business Investments in Indiana 18 CompanyIndustryCountyNew JobsInvestment HondaMfg. - AutoDecatur2,067$550,000,000 MedcoLife SciencesBoone1,306$165,000,000 WellPointInsurance - DistributionMarion1,200$12,000,000 American Commercial LinesMfg. - BargesClark1,157$17,500,000 Toyota Motor North America, Inc.Mfg. - AutoTippecanoe1,000$200,000,000 Really Cool FoodsMfg. - FoodWayne1,000$100,000,000 Advance Stores Company (Distribution Center)Mfg. - AutoJasper636$48,400,000 Wal-Mart Stores (Distribution Center)Dist. - Log.Grant600$60,000,000 O'Reilly Auto Parts (Distribution Center)Dist. - Log.Hendricks581$46,900,000 Dollar General Corp. (Distribution Center)Dist. - Log.Grant500$68,000,000 CumminsMfg. - AutoBartholomew458$250,000,000

19 Intermodal Freight Flow Study Browning-Duke commissioned study to estimate baseline international intermodal 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

20 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

21 21 Hendricks County, IN World-Class Trade Infrastructure CSX Yard AllPoints Midwest

22 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 already jointly planning improvements with CSX State/Ports of Indiana support - Potential Incentives, Financing, Foreign-Trade Zone 22

23 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 meetings with key leaders and tour of region 23

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