Railroads & Economic Development: On Parallel Tracks? Page Siplon Executive Director

1. Railroads & Economic Development: On Parallel Tracks? Page Siplon Executive Director Georgia’s Center of Innovation for Logistics

2. Fueling Logistics Competitiveness • Resource: • - Access to R&D and technology leaders • - Analysis of data and innovative trends • - Cross-sector connections and collaboration • - Collective industry voice • Result: • Increased opportunities for industry growth and success

3. What is Logistics?Who Cares?What is Georgia’s Story?

4. What is Logistics? And what makes a “Logistics Industry”? The line between disorder and order lies in logistics... Sun Tzu “…that part of Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.” A …………………………………………………. B

5. VOLUMEVELOCITYVISIBILITY3 V’s of Logistics

6. … Every Supply Chain is unique

7. 2008 total cost of logistics was $1.4 trillion, or 10.1% of the US GDP

9. Employment Size

11. … still a tight race!

12. What is Logistics?Who cares?What is Georgia’s Story?

13. EVERY YEAR RAILROADS IN THE USA MOVE: • 1.7 million carloads of wheat, corn, soybeans, and other agricultural products… • 1.5 million carloads of animal feed, beer, canned produce, corn syrup, flour… • 2 million carloads of chemicals… • 7.7 million carloads of coal (70% of total) • 1.3 million carloads of lumber and paper products • Tens of thousands of carloads of scrap paper • 12 million intermodal containers (60% of which consists of imports or exports) • 70% of the automobiles built in the United States • 1.7 million carloads of finished vehicles, parts, and accessories • …about 28 million total carloads, if you were curious

14. DID YOU KNOW? • If all freight rail traffic were shifted to trucks, rail shippers would have to pay an additional $69 billion per year • Average U.S. freight rail rates are half those in China and Japan, and 75% below those in major European countries • In 2008, U.S. railroads moved a ton of freight an average of 457 miles per gallon of fuel (up from 436 in 2007) • If 10% of the long-distance freight currently moving by truck moved by rail instead, fuel savings would exceed one billion gallons per year • In 2007, the average U.S. freight railroad employee earned wages of $68,200 and fringe benefits of $27,100 — for total compensation of $95,300. • In fiscal year 2008, some 600,000 beneficiaries received more than $10 billion in retirement and survivor benefits from the Railroad Retirement System.

17. What is Logistics?Who cares?What is Georgia’s Story?

22. RAIL TONS

23. So what really is Georgia’s rail impact?

24. Georgia’s Rail Impact? • 5,000+ miles of track; origin of 24 million tons; destination for 75 million tons • 21 short-lines & 2 Class-1 railroads • 7,900 railroad employees in the State • $481 million in payroll every year • Top 10 rail state by employment measures • Private rail industry invests over $215 million in maintenance and upkeep • 17% of total revenue goes back into infrastructure

25. Georgia’s Rail Impact? • 5,000+ miles of track; origin of 24 million tons; destination for 75 million tons • 21 short-lines & 2 Class-1 railroads • 7,900 railroad employees in the State • $481 million in payroll every year • Top 10 rail state by employment measures • Private rail industry invests over $215 million in maintenance and upkeep • 17% of total revenue goes back into infrastructure • True, but… NO

26. Georgia’s Rail Impact? • Rail is a critical component to 4,071 businesses in Georgia • Directly affecting 114,007 employees • Moves cargo valued at $209 billion every year, requiring 3.8 million movements

27. Georgia’s Rail Impact? • Rail is a critical component to 4,071 businesses in Georgia • Directly affecting 114,007 employees • Moves cargo valued at $209 billion every year, requiring 3.8 million movements • NO… but getting closer!

28. Georgia’s Rail Impact? • Y’all are not in the rail business just because you like trains … Right? • You are in the rail business to move cargo for your customers. • So, we also need THEIR stories and insight to complete this impact message. • So far, this only represents about 2/3 of the short-lines and the “Class-1’s” • We need as many future growth & potential stories as possible • We need to have a complete story to tell for this to be effective • Your CUSTOMERS need to help us tell it! • What/how/why have they expanded and grown because of rail in Georgia? • Why will they have or may shrink/close/move because of rail in Georgia? • This is a work in progress …

31. Thank you! Page Siplon psiplon@georgia.org

32. BACKUP DETAIL SLIDES

35. 2007 Truck Flow

37. TRUCK TONS

38. RAIL TONS

39. Logistics Focused Education Resources

43. Supply Chain Technology

45. Four Main 3PL Segments (defined) • Domestic Transportation Management – (Non Asset Based): • 3PLs providing value-added transportation management services dealing with shipments originating in and destined to North American points. Usually performed in conjunction with freight brokerage, often contractual. • Domestic Transportation Management – (Asset Based): • 3PLs providing dedicated contract carriage services supplying tractors, drivers and management. Trailers are normally included, contract terms are 1-7 years. Primarily dedicated contract carriage. • International Transportation Management – (Non Asset Based): • 3PLs providing value-added international transportation management services dealing with shipments originating in or destined to North American points usually performed in conjunction with freight forwarding, often contractual. • Value-Added Warehousing and Distribution –(Asset Based): • 3PLs normally providing long term contract warehousing or distribution center operations with a host of value-added services.