1. Robert E. Martínez Vice President Business Development Norfolk Southern Corporation FHWA: Talking Freight Seminar March 2004

3. NS 2003 Revenues Total: $6.5 billion

4. Intermodal is growing fast.  It’s been growing very fast in the United States.  It’s been the single, fastest-growing “commodity” group at Norfolk Southern.

5. Intermodal Growth Year over Year (US and Canada)

6. What do we mean by “Intermodal”?  In railroad parlance it means something very specific.  COFC: Container on Flatcar  TOFC:Trailer on Flatcar

7. 14-Year Equipment Trends *First year measured UNITS: 5.7 million 8.1 million 10 million 11.4 million Source: AAR

8. Note:  Intermodal is point-to-point service, unlike traditional carload businesses.  For profitability, the intermodal network must not be balkanized.  You need sufficient volumes, few train blocks [segments].  You need carefully to analyze and work the capture region of a given facility.

10. The Norfolk Southern Intermodal System

11. NS Intermodal growth has been driven by:  Steady and fairly intense investment in infrastructure and facilities  New “product” development

12. New Products have been driving NS Intermodal growth  Cleveland  GPA ICTF in Savannah  Guaranteed services Transcon with UP (Blue Streak) and with BNSF  Hurricane with FEC  Dockside to Canada  Expedited service to Mexico with UP

14. Intermodal market share:  Chicago – Los Angeles84%  New York – Chicago38%  Northeast – Southeast 5%

15. Interline Operating Relationships are Critical for the Intermodal Product Connection NS IM Share  BNSF28.5%  BNSF/KCS 6.7%  UP15.6%  CP/D&H 1.5%  D&H/GTI 3%  KCS 2%  FEC 2%  NYSW 2%

16. Charlotte, 6 TH A.M. Charleston, 6 TH P.M. Savannah, 6 TH A.M. Jacksonville, 7 TH A.M. Miami, 8 th A.M. Alliance (Dallas) Atlanta /Austell 5 TH A.M. Chicago Erail, 5 TH A.M. Harrisburg, 5 TH A.M. Croxton, 6 TH A.M. Baltimore, 6 TH A.M. Norfolk, 7 TH A.M. Ameriport/ Morrisville, 6 TH A.M. Port of Long Beach BNSF Hobart Oakland/ Richmond San Bernardino Port of Los Angeles Clovis, NM NS-BNSF Transcon Services Columbus, 5 TH A.M.

17. NS-UP Improved Connections El Paso Dallas Charlotte, 7 TH P.M. Savannah, 7 TH A.M. Jacksonville, 6 TH P.M. Miami, 7 TH A.M. Atlanta /Austell 5 TH P.M. Cleveland, 5 TH, A.M. Columbus, 5 TH A.M. Ayer, 7 TH A.M. Baltimore, 6 TH A.M. Erail, 6 TH A.M. Norfolk, 8 TH A.M. Ameriport/ Morrisville, 6 TH A.M. Port of Seattle Port of Tacoma Granger Fremont Chicago Port of Long Beach Oakland Port of Los Angeles UP ICTF Harrisburg, 5 TH A.M. Memphis

18. We are pursuing opportunities to add value in other commodity and product areas as well.

19. Metals & Construction

22. In the paper and forest products sector

23. Paper Mill Certified Distribution Center(s) Paper Receiver Paper Receiver Paper Receiver Paper Receiver New Products and Services: Thoroughbred EXTRA

24. For chemicals and agricultural commodities: Thoroughbred Bulk Transfer Facilities “TBT’s”

26. TOP: The Thoroughbred Operation Plan

27. Operating Philosophy  Pre-TOP – Tonnage-Based Operations – Optimize Operations Within Separate Operating Divisions  Post-TOP – Scheduled Operating Plan – Optimize Operations Across Entire Railroad Minimize Blocking Complexity Eliminate Handlings Minimize Circuity

28. TOP Development  Running a Scheduled Railroad  Objectives – Improve service reliability and system velocity – Eliminate transit variation – Reduced railcar handling through the use of optimized blocking plan – Improve asset utilization – Improve Customer Satisfaction

29. The intent is not necessarily always to reduce transit time. It is to provide consistent reliability.

30. System Average Train Speed

31. Cars On Line

32. System Average Terminal Dwell

33. Train Performance

34. The End