SCO 90 What it is What it Does

SCO 90 What it is? What it Does? How does it affect Car Hire? Todd Poland November 7, 2012 (Plagiarized Lisa Gering’s November 10, 2010 Presentation)

What is Special Car Order 90? A special car order to efficiently move surplus, empty, rail cars to the home railroad where there is no direct connection between the handling railroad and the car owner Approved by the AAR, EAC, and SOMC Minimizes the time, car hire, and transportation costs involved in returning these cars to the railroad owners or controllers For railroad marked cars as well as private marked cars with a railroad in the UMLER Lessee field Insures owning road gets equipment back into service it was acquired to protect. 1

Example for an MMA Box Car Bangor (MMA) CPRS NS UP San Francisco * *If the car started its loaded movement on the owner road or moved loaded via the owner; and upon unloading the holding road chooses not to reload the car, the car must move back in reverse of loaded shipment until it is on a direct connection of the car owner. 2

Example for an MMA Box Car Portland Bangor UP San Francisco * *Upon reloading this free running unassigned MMA Box Car will be assigned a • Transportation Code = T and Transportation Condition Code = blank and is governed by SCO 90 rules for empty return • 3

Example for an MMA Box Car Portland UP Bangor San Francisco NS CS XT Jacksonville 4

Example for an MMA Box Car Portland Bangor Petersburg CSXT San Francisco Jacksonville 5 5

Example for an MMA Box Car Portland Bangor Petersburg San Francisco Equipment Mark 6 Delivery Carrier Receiving Carrier Outlet City Outlet State MMA CSXT CN CECILE PQ MMA CSXT CN TOLEDO OH MMA CSXT CPRS SELKIRK NY MMA CSXT CPRS BUFFALO NY CSXT From SCO 90 Master Table on Railinc Website Jacksonville

Example for an MMA Box Car Portland Bangor (MMA) Selkirk (CPRS) SCO 90 Outlet Petersburg San Francisco Equipment Mark 7 Delivery Carrier Receiving Carrier Outlet City Outlet State MMA CSXT CN CECILE PQ MMA CSXT CN TOLEDO OH MMA CSXT CPRS SELKIRK NY MMA CSXT CPRS BUFFALO NY CSXT From SCO 90 Master Table on Railinc Website Jacksonville

Who Participates and Why Geography Delivering Carrier / Receiving Carrier / Both Sufficient Car Ownership Use of Transportation Codes and Condition Codes drives emtpy car movements Efficiencies in Empty Car Time and Miles are being realized 8

Transportation Code & Transportation Condition Codes To Identify Empty Cars Subject to SCO 90 Rules T – free running unassigned car. Cars can be reloaded by any carrier in the SCO 90 route home E – subject to CSD 145 and CSD 155 pool assignment that are reloaded by other than the pool assigned road. Generally can not be reloaded Codes added and removed in Umler on a daily basis 9

AAR Circular Number OT-10 (Circular TD-5) Empty handling options for the various Transportation Codes / Transportation Condition Codes for railroad marked freight cars / railroad leased freight cars TC/TCC Can RR Load Car without owner permission? EC No EG No Empty Car On Indirect Connection SCO 90 outlet. If no outlet reverse route Same as above Empty Car On Direct Connection To owner/car leasing railroad or reverse route if reverse route carrier is also direct connection. Same as above Order SCO 90/CSD 145, 155, 435 (Shipper Assigned) SCO 90/CSD 145, 435 (Contaminated Service) EJ Yes Same as above SCO 90/CSD 145 (Agents Pool) EP No Same as above SCO 90/CSD 145, 155, 435 (Commodity Pool) ER No Same as above SCO 90/CSD 145, 155, 435 (Agents Pool) 10 T Yes Same as above SCO 90 TO No Same as above CSD 175/SCO 90 (Lease Termination TU Yes, to or via home railroad Same as above CSD 150/SCO 90 (Unassigned Car)

T: Transportation Code & Transportation Condition Code that are applicable when the owner was not in the last loaded route. TC / TCC T TU TO 11 Description General service or unassigned railroad marked or privately marked cars with a railroad in the Lessee Field in Umler, boxcars, flat cars, and gondolas covered by SCO 90. Special equipped railroad marked or privately marked with a railroad in the Lessee Field in Umler, cars covered by the loading provisions of CSD 150 or 155 and subject to the empty handling provisions of SCO 90. Railroad marked or privately marked with a railroad in the Lessee Field in Umler cars subject to the empty handling provisions of SCO 90 being returned home for lease termination or repairs. Also car is subject to the provisions of CSD 175.

E: Transportation Code & Transportation Condition Code that are applicable when car is reloaded by a railroad other than the Umler Pool assigned railroad. 12 TC / TCC Description EC A railroad marked car or the private car with a railroad in the Lessee Field in Umler assigned to a Shipper Pool under CSD 145 or 155 that has been reloaded by other than the pool assigned road and will return empty via SCO 90. Car assigned to a C pool. EG A railroad marked car or the private car with a railroad in the Lessee Field in Umler assigned to a Contaminated Commodity Pool under CSD 145 or 155 that has been reloaded by other than the pool assigned road and will return empty via SCO 90. Car assigned to a G pool. EJ A railroad marked car or the private car with a railroad in the Lessee Field in Umler assigned to an Agent Pool under CSD 145 or 155 that has been reloaded by other than the pool assigned road and will return empty via SCO 90. Car assigned to a J pool. EP A railroad marked car or the private car with a railroad in the Lessee Field in Umler assigned to a Commodity Pool under CSD 145 or 155 that has been reloaded by other than the pool assigned road and will return empty via SCO 90. Car assigned to a P pool. ER A railroad marked car or the private car with a railroad in the Lessee Field in Umler assigned to an Agent Pool under CSD 145 or 155 that has been reloaded by other than the pool assigned road and will return empty via SCO 90. Car assigned to a T pool.

TC/TCC Stats Average count in Umler per month Sep 09 – Oct 10 13 TC/TCC Average T 10, 964 TO 2 TU 102 EC 2, 163 EG 12 EJ 188 EP 2, 988 13

SCO 90 Quarterly Balancing Goal of flow balancing is to redistribute empty return flows based on loaded traffic patterns for return empty movements, save empty car miles and attempt to balance empty car movement costs across the North America rail system. TRAIN II data (TRAIN 03/10 and TRAIN 01/31 events) is used to capture the loaded movements and empty return flows of cars covered by SCO 90 Actual car hire and transportation costs are used to assign debits and credits used in a Carrier Obligation Adjustment formula Reverse route cars are not included Reports on Railinc website 14

Debit / Credit Calculations for Balancing Bangor (MMA) CPRS NS UP San Francisco 15 If UP does not reload car; no debits or credits will be applied.

Debit / Credit Calculations for Balancing Bangor (MMA) CPRS NS UP San Francisco 16 If UP does reload car; CPRS and NS receive a loaded intermediate debit. UP receives a loaded junction destination (JD) debit

Debit / Credit Calculations for Balancing Portland UP gets a terminating credit (TC) equal to the inbound JD debit. No debit is calculated for UP’s online load UP to Portland San Francisco * 17 Bangor

Debit / Credit Calculations for Balancing Portland UP Bangor San Francisco NS UP, NS, and CSXT would receive no loaded debits for routing to Jacksonville because the MMA car was loaded closer to the owner CS XT Jacksonville 18

Debit / Credit Calculations for Balancing Portland Bangor CSXT receives no loaded debits for local shipment to Petersburg CSXT San Francisco Jacksonville 19

Debit / Credit Calculations for Balancing Portland Bangor (MMA) Selkirk (CPRS) SCO 90 Outlet Petersburg CSXT receives a origin junction (OJ) credit from Petersburg to Selkirk its SCO 90 outlet. CPRS receives an empty intermediate credit. San Francisco Jacksonville 20

2009 SCO 90 Automation Project Quarterly reports posted on Railinc website in SCO 90 Application § Obligation Adjustments § Detail of Intermediate Traffic; Summary of Junction. Destination and Origin-Junction Traffic; Mileage Debits and Credits; Termination Credits; Utilization Credits; and Closer Credits § Detail of Junction-Destination and Origin-Destination Traffic; Mileage Debits and Credits § Utilization Credits; Termination Credits; and Closer Credits 21

2009 SCO 90 Automation Project Data Manager § § 22 SCO 90 Master Zero Mileage Pairs Joint Industry Pairs ECODE Exception Pool Numbers

Transportation Code D – SCO 200 Railroad marked equipment that has never located on the car owner’s property Railroad marked equipment that has not been loaded on the railroad to which it is assigned Railroad marked equipment that has not been loaded on its leasing railroad Privately marked equipment prior to first load For empty handling refer to OT-10 Circular TD-5 23

Questions? 24

WHAT A DONKEY!!! One day a farmer's donkey fell down into a well. The animal cried piteously for hours as the farmer tried to figure out what to do. Finally, he decided the animal was old, and the well needed to be covered up anyway; it just wasn't worth it to retrieve the donkey. He invited all his neighbors to come over and help him. They all grabbed a shovel and began to shovel dirt into the well. At first, the donkey realized what was happening and cried horribly. Then, to everyone's amazement he quieted down. A few shovel loads later, the farmer finally looked down the well. He was astonished at what he saw. With each shovel of dirt that his back, the donkey was doing something amazing. He would shake it off and take a step up… As the farmer's neighbors continued to shovel dirt on top of the animal, he would shake it off and take a step up. Pretty soon, everyone was amazed as the donkey stepped up over the edge of the well, and happily trotted off! Life is going to shovel dirt on you, all kinds of dirt. The trick to getting out of the well is to shake it off and take a step up. Each of our troubles is a stepping stone. We can get out of the deepest wells just by not stopping, never giving up! Shake it off and take a step up. 25

1. 2. 3. 4. 5. Remember the five simple rules to be happy; Free your heart from hatred – Forgive! Free your mind from worries - Most never happen? Live simply and appreciate what you have. Give more. Expect less. NOW. . . . Enough of that! The donkey later came back and bit the farmer who had tried to bury him. The gash from the bite got infected and the farmer eventually died in agony from septic shock. MORAL FROM TODAY'S LESSON: When you try to cover your ass, it always comes back to bite you. 26