Supply Chain Trends in Intermodal

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1 What’s your nextmove?™ |

Ken Miller VP Operations

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SERVICE REVIEW: MARKET SHARE

Market overview (segment specific) Market size: $12 Billion Capacity: 205,000 53‐foot Containers Industry outlook: Growing at > 7% Our position 25 ‐ 28% of overall market (revenue and/or capacity) Opportunities Highway Conversion Customer Deliveries New Services – Canada/Mexico/Eastern Network Expansion Roadblocks Market Share Competitor Actions

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Intermodal Rail Carrier Industry Comparison

INTERMODAL VOLUME 2011 SALES APPROACH CAPACITY 4.5 M 3.3 M 2.3 M 3.2 M BNSF & Motor Carriers Motor Carriers Unlimited

IMC Limited by fleet size

IMC & Motor Carriers Limited by fleet size Limited by fleet size LARGEST SEGMENT by volume Intermodal Industrial Products Coal Industrial Products Rail Owned Containers Containers Trailers & Containers EQUIPMENT OWNER

IMC & Motor Carriers Rail Owned Rail Owned Containers Type

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Estimated 53’ Domestic Container Fleet by Owner

Total Fleet Size

205,000 170 200 200 300 350 400 800 1,000 1,000 2,000 2,000 4,100 5,000 5,000 8,500 12,600 18,000 22,900 31,000 31,000 60,000 ‐ 10,000 20,000 30,000 40,000 50,000 60,000 70,000 KCS Marten Matson USA Truck Dart Universal Logistics Trailerbridge CH Robinson APL Logistics COFC Logistics Crowley CSX UPS CN Swift Schneider Pacer Hub EMHU UMAX JBH North American 53' Domestic Container Fleet Size by Owner

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Who are the players?

Union Pacific Based Providers Hub Group (Red, White, or Green Containers) EMP Rail Owned Equipment (White or Green Containers) UMAX (Blue Containers / Yellow and White Lettering) PACER (Blue Containers) 100’s of IMC Competitors (Intermodal Marketing Company) Largest Mexico Presence BNSF Based Providers Schneider Swift First Priority is Highway Conversion

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6 What’s your nextmove?™ | Source: Establish, Inc/Herbert W. Davis and Company 2006 Database LOGISTICS COST BREAKDOWN 50% 22% 10% 8% 4% 3% _2% _1%

Transportation Inventory Labor Customer Rent Admin Supplies Other

Transportation is generally the

greatest cost in the supply chain.

Focus on Transportation

Collaboration to reduce costs and increase capacity.

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Today’s Supply Chain Landscape

Shippers are looking for partners with flexible, comprehensive, value added solutions Steadily increasing freight demand Truckload capacity continues to tighten Supply/demand balance becoming an issue Intermodal volumes continue to rise and take highway share Diesel prices remain elevated CONFIDENTIAL

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Top Supply Chain Challenges (Next 2‐5 Years)

Tightening driver market

Government regulations

CSA EOBR mandates Hours of Service CARB

Aging equipment leads to replacement at higher cost basis Highway infrastructure – congestion and deterioration Access to capital Fuel Managing Budgets CONFIDENTIAL

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9 What’s your nextmove?™ | $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 Jan ‐19 95 Jul ‐19 95 Jan ‐19 96 Jul ‐19 96 Jan ‐19 97 Jul ‐19 97 Jan ‐19 98 Jul ‐19 98 Jan ‐19 99 Jul ‐19 99 Jan ‐20 00 Jul ‐20 00 Jan ‐20 01 Jul ‐20 01 Jan ‐20 02 Jul ‐20 02 Jan ‐20 03 Jul ‐20 03 Jan ‐20 04 Jul ‐20 04 Jan ‐20 05 Jul ‐20 05 Jan ‐20 06 Jul ‐20 06 Jan ‐20 07 Jul ‐20 07 Jan ‐20 08 Jul ‐20 08 Jan ‐20 09 Jul ‐20 09 Jan ‐20 10 Jul ‐20 10 Jan ‐20 11 Jul ‐20 11 Jan ‐20 12

Fuel is Gaining Executive Visibility in Freight Costs

Source: U.S. Dept. of Energy (EIA) $4.127/gal 3/31/2012 RECESSION

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Intermodal Remains Attractive

Source: IANA Intermodal Market Trends and Statistics Millions 0.85 0.90 0.95 1.00 1.05 1.10 1.15 1.20 1.25 1.30

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Yearly Intermodal Traffic Totals

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Intermodal Benefits Are Driving Change

Shippers, Carriers, Environment ● Economical ● Expanding capacity ● Greener shipping ● Less congestion ● Better jobs ● Economical ● Expanding capacity ● Greener shipping ● Less congestion ● Better jobs Shippers, Carriers, Environment ● Economical ● Expanding capacity ● Greener shipping ● Less congestion ● Better jobs CONFIDENTIAL

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What Freight Moves Intermodal Today?

Types of Intermodal Shipments ● Import shipments ● Inbound to DC and Outbound to Store ● Consolidation ● Temp‐Controlled ● Flatbed ● Import shipments ● Inbound to DC and Outbound to Store ● Consolidation ● Temp‐Controlled ● Flatbed Types of Intermodal Shipments ● Import shipments ● Inbound to DC and Outbound to Store ● Consolidation ● Temp‐Controlled ● Flatbed CONFIDENTIAL

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So Why Hasn’t More Freight Been Converted?

Some Shippers Say… ● “I had a bad experience with Intermodal 15 years ago.” ● “Shipping requirements won’t allow Intermodal.” ● “Intermodal transit is slow and variable.” ● “Won’t work for my customers.” ● “I had a bad experience with Intermodal 15 years ago.” ● “Shipping requirements won’t allow Intermodal.” ● “Intermodal transit is slow and variable.” ● “Won’t work for my customers.” Some Shippers Say… ● “I had a bad experience with Intermodal 15 years ago.” ● “Shipping requirements won’t allow Intermodal.” ● “Intermodal transit is slow and variable.” ● “Won’t work for my customers.” CONFIDENTIAL