1. Barbara Ward November 13, 2008 ACACSO Orlando, Florida Improving the LCS Process LCS UPDATE

2. Why do we need improvements? To boldly go where no one has gone before

3. Not even Car Accountants

4. History LCS was implemented in 1999 with the intent of eliminating all car hire time claims. What happened was not all roads were created equal… –some used all messages and others used changes only. –Since each road tended to “interpret” the LCS messages this caused a lot of situations in which the LCS records were not able to match. –Claims continued

5. And you pretty much have a recipe for disaster. Well, disaster is probably a little strong but definitely some of the challenges that we all face today is with the variations in train reporting. Haulage agreements Running rights agreements A little dash of suppressed interchanges Transfers of liability Rule 15 An Interesting Mix

6. -This led the LCS Tag to ask Railinc to begin a project to improve LCS in order to allow roads to accurately and easily calculate car hire liability. -This will lead to more timely settlement and accuracy of car hire settlements with less exceptions. Adapting LCS to today’s business

7. Current StateFuture State LCS considers shop time to be in the handling carriers account even though an interchange had been reported to SHOP. LCS will consider shop time to be in the car owner’s account. Rule 5 and 15 TOLs can overlap potentially causing car hire to be paid incorrectly by the carriers. Railinc will ensure that Rule 5 switches and Rule 15 offers will not be allowed to overlap with a new edit for Rule 5 A road can make an Offer and the other road can report receiving the car prior to the Offer. This results in a valid Offer message to the road that already has the car. Offers and LCS are coordinated to ensure clear and accurate continuity of liability. Recommended Areas Needing Change

8. CurrentFuture Inhibited/suppressed interchanges are reported using a Train31 message. These interchanges can be in conflict with other interchanges causing incorrect car hire calculations. LCS will use a new table to properly govern and prioritize inhibited interchanges LCS sends multiple type E messages because of the Changes Only option currently present in the application. This results in excessive messages being sent which may lead to confusion when calculating liability. LCS type E messages will be sent only when required. Haulage and Offer reporting conflicts and does not allow for proper allocation of car hire between carrier and haulage right carriers. Example: Haulage movement carrier offers to another carrier. LCS and the Offer process will be coordinated and will ensure that car hire is properly transferred. LCS will generate an “F” (fixed) interchange to maintain continuity. Recommended Areas Needing Change

9. CurrentFuture Rule 15 Offer may have no specific ending transaction and consequently a car may stay in a road’s account for an excessive period of time. The Offer and LCS process can cause 2 roads to pay for the same car. Example: Car offered to Road A and delivered to Road B. LCS will terminate Rule 15 Offers after 60 days or when the load/empty status changes. LCS will generate appropriate interchanges to ensure that Offer and LCS records are coordinated to ensure proper liability. LCS does not clearly mark the beginning and ending of Haulage. It is not possible to use LCS messages to determine liability due to Haulage. LCS clearly marks Haulage beginning and end. Cars are restencilled and new cars become active. There is no flag in LCS to indicate the old car has become active and may result in a duplicate payment. LCS will prompt users that an old car had been restencilled so proper investigation can be done. Recommended Areas Needing Change

10. CurrentFuture Multiple LCS records can occur at the same date, hour and minute potentially causing car hire to be paid incorrectly by the carriers. Additional information (example: sequence number) will be created to allow carriers to sort these records properly. In the case of Haulage moves with multiple haulage movement carriers, LCS requires each haulage movement carrier to report properly. LCS will use table logic to correctly assign liability even if Haulage movement carriers report regular interchanges LCS does not gap cars out of a road’s account if the car was in “suppressed interchange status”. Acar will get gapped out of a road’s account if in suppressed interchange status on the first of 3 consecutive moves. Recommended Areas Needing Change

11. Questions?