Rule 22 Automation Update ACACSO Austin TX November

Rule 22 Automation Update ACACSO – Austin, TX November 2014

Background • Recommended by Centralized Car Hire TAG (CCH) in September 2013 • Unanimously approved by Equipment Assets Committee (EAC) in January 2014 • TAG appointed by EAC and meetings began in February 2014 • Approved by RPSWC in August 2014 contingent on EAC approval of Rule 22 verbiage and business rules

Tag Members • • GATX Greenbrier Companies GE Progress Rail Services Railinc Ship. Xpress TTX Company • • CN CP CSXT GWRR KCS NS UP

TAG Goals • Create a set of standard business rules • Simplify the existing Rule 22 verbiage • Low cost industry implementation – LCS message • Not to change the intent and current application of the rule

System Processing • LCS message – To car mark owner or rack owner for multilevels • Timing of transactions – No change to existing LCS processing rules (5 days) – Reclaim processing will evaluate 20 days of event reportings • Covers 95% of all reclaim transactions • “Clean-up” process – Beginning and ending events < 20 days no further processing – Beginning and ending events > 20 days • Process will analyze events to ensure relief was appropriate • If relief was not appropriate, a reversing transaction will be generated

Bilateral Agreements • Designating non-participating carriers for relief – Loading point and/or holding point • Shipper pools – designated by pool operator • Joint, National, RELOAD pools – designated by any pool participant • Other agreements – Limit or exemption of reclaim time and/or location – Exemption of specific cars from relief

Serving Areas vs. Switch Districts • Serving areas - defined by each carrier based on: – Geography – 1 st two digits of SPLC – Railroad operations • Information availability – Transparency – Automated notification when changes are made • Dispute – Arbitration through Car Hire Rule 17

Shipper Pools • Eligible equipment – Umler will reflect a pool number with a carrier’s numeric code as the first three digits (not 999 or 998) and the Pool Type in Umler must be “C” or – The Transportation/Transportation Condition Code will be C, DC or EC • Eligible carriers – Only the pool operator or carriers designated by bilateral agreement are eligible for relief – For example, cars in pool 5551234 (NS) will be allowed holding point and loading point relief – Allows for bilateral agreements between pool operator and other roads for loading point and/or held short reclaims

Joint Pools • Eligible equipment – Umler will reflect a pool assignment that starts with 998 and the Pool Type in Umler must be “C” or – The Transportation/Transportation Condition Code will be C, DC or EC and – The handling carrier will be a participant in the pool. • Eligible carriers – Only the carriers that participate in the pool will be eligible for relief. – For example, if pool 9981234 is operated by carrier A and B, either carrier A or B will be allowed relief – Either of the pool participants will have the ability to establish bilateral agreements with other roads for loading point and/or held short reclaims

National Pools • Eligible equipment – Umler will reflect a pool assignment that starts with 999 and the Pool Type in Umler must be “C” or – The Transportation/Transportation Condition Code will be DN or N – The North American Boxcar Pool (NABP) and specific equipment pools operated by TTX will be excluded from the relief process • Eligible carriers – Any carrier that has contributed equipment to the pool will be eligible for relief – Any of the participants in the pool will have the ability to establish bilateral agreements with other roads for loading point and/or held short reclaims

National Pools - RELOAD • RELOAD Eligibility – All carriers that participate in the TTX Reload Process will be eligible for holding point and loading point – Participating carriers will be identified via information contained in Umler (pool number and/or pool operator) • Bilateral agreement – Any participant in the RELOAD pool will have the ability to establish bilateral agreements with other roads for loading point and/or held short reclaims

Loading Point – Subject to Demurrage • System design: – All equipment subject to demurrage/storage unless updated by carrier – Beginning transaction – empty arrival – Ending transaction – empty placement (actual/constructive) – Missing events: • Arrival or placement – no relief allowed LCS Transactions: Arrival at Loading Point Placement Release Loaded E E L Delivery - R 222 Receipt - R 222

Loading Point – Exempt from Demurrage • System design: – All equipment subject to demurrage/storage unless updated by carrier – Beginning transaction – empty arrival – Ending transaction – release load or first loaded event – Missing events: • Arrival – no relief allowed • Release – relief ends on first loaded record LCS Transactions: Arrival at Loading Point Placement Release Loaded E E L Delivery R 222 Receipt R 222

Holding Point • System design: – Beginning transaction – empty arrival – Ending transaction –empty departure (same location) • < 24 hrs between beginning and ending transactions – Missing events: • Arrival or release– no relief allowed LCS Transactions: Arrival at Holding Point Departure from Holding Point E E Delivery - R 224 Receipt - R 224

Next Steps • TAG actions – Complete proposed business rules – Complete proposed Rule 22 verbiage change • Potential 2015 -2016 project – Requires approval from EAC

Questions Robert Sanford Director Revenue Accounting Support Services Robert. Sanford@nscorp. com 404 -529 -1011