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M e x ic o The Last I ntermodal Frontier

M e x ic o The Last I ntermodal Frontier. How large is the market?. How much will convert?. Why now?. What barriers are in the way?. Lack of local customs broker relationship Terms of sale Investment in border infrastructure Carrier relationships. The Barriers.

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M e x ic o The Last I ntermodal Frontier

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  1. MexicoThe Last Intermodal Frontier

  2. How large is the market? How much will convert? Why now? What barriers are in the way?

  3. Lack of local customs broker relationship • Terms of sale • Investment in border infrastructure • Carrier relationships The Barriers

  4. Cross Border Shipments by Truck 2.6 million truckloadsoriginate or terminate in KCS’ Target Market 50 percent of loads move to/from locations deep into MexicoKCS operates the Laredo rail bridge on both sides of border Eastern Midwest Upper Midwest 64,872 175,863 Northeast Great Lakes 217,928 248,816 Central Plains 70,447 Southeast 120,730 Atlantic States 180,424 South Central 1,514,854 SOURCE: TranSystems, “Freight Flow Analysis”

  5. Setting Expectations The US model sets potential at 260,000 loads or 10% of the market

  6. United States Mode Share by Length of Haul (Millions of Trailers/Containers) Source: Transearch, Norbridge Analysis

  7. Length of Haul The US length of haul model expands potential to over 800,000 loads or 30% of the market

  8. Why Now?

  9. 2005 KCSM Purchase Complete Detroit Chicago St. Louis Kansas City Dallas Meridian Shreveport Jackson Houston Laredo Salinas Victoria Monterrey San Luis Potosi KCS Intermodal Cross Border Network Queretaro Toluca - Mex City Lazaro Cardenas

  10. 2006 • NS Gateway Opens to SE Detroit Chicago St. Louis Kansas City Charlotte Atlanta Dallas Meridian Meridian Shreveport Jackson Jacksonville Houston Laredo Salinas Victoria Monterrey San Luis Potosi KCS Intermodal Cross Border Network Queretaro Toluca - Mex City Lazaro Cardenas

  11. 2006 • NS Gateway Opens to SE • Jackson, MS to Mexico Service Begins

  12. 2008 • Kansas City Terminal Opens

  13. 2008 • Kansas City Terminal Opens • SNI Service from Marion, OH to Mexico Detroit Chicago Marion St. Louis Kansas City Charlotte Atlanta Dallas Meridian Meridian Shreveport Jackson Jacksonville Houston Laredo Salinas Victoria Monterrey San Luis Potosi KCS Intermodal Cross Border Network Queretaro Toluca - Mex City Lazaro Cardenas

  14. 2008 • Kansas City Terminal Opens • SNI Service from Marion, OH to Mexico • El Cayacal Terminal Opens at Lazaro Cardenas • KC to Mexico Svc Begins

  15. 2009 • Rosenberg Terminal Opens • Rosenberg – Victoria Line Opens

  16. 2010 • Purchase of Toluca-Mexico City Terminal • Upgrade of Monterrey Terminal

  17. Toronto • 2011 • New Service with CN: Jackson, MS to Chicago, Detroit & Toronto • Upgrade NS Service to SE and NE Detroit Chicago Harrisburg Marion St. Louis Kansas City Charlotte Atlanta Dallas Meridian Meridian Shreveport Jackson Jacksonville Houston Rosenberg Laredo Salinas Victoria Monterrey San Luis Potosi KCS Intermodal Cross Border Network Queretaro Toluca - Mex City Lazaro Cardenas

  18. 2011 • New Service with CN: Jackson, MS to Chicago, Detroit & Toronto • Upgrade NS Service to SE and NE • Upgrade of Toluca-Mexico City Terminal • Purchase of San Luis Potosi Terminal

  19. 2012 • Open Memphis Service with the CN • Open Birmingham Service with NS (Late 2012) • TMXU fleet introduced

  20. Toronto • 2012 • Open Memphis Service with the CN • Open Birmingham Service with NS (Late 2012) • TMXU fleet introduced Detroit Chicago Harrisburg Marion St. Louis Kansas City Charlotte Memphis Birmingham Atlanta Dallas Meridian Meridian Shreveport Jackson Jacksonville Houston Rosenberg Laredo Salinas Victoria Monterrey San Luis Potosi KCS Intermodal Cross Border Network Queretaro Toluca - Mex City Lazaro Cardenas

  21. Expanded Channel Engagement

  22. Port of Lazaro Cardenas

  23. “Change before you have to…” Jack Welch

  24. “ The world will end before Consolidated Freightways and Roadway go out of business” LTL Industry Executive

  25. “Intermodal is a forty-five foot trailer business…always has been, always will be…” Intermodal Industry Icon

  26. “ I was interested in cross border intermodal but I couldn’t change my terms of sale…” Major Shipper

  27. “Change before you have to…” Jack Welch

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