Norfolk Southern Corporation

1. February 15, 2010 Norfolk Southern Corporation Georgia Tech Global Logistics Scholars

3. Agenda • Overview of Rail Industry • Norfolk Southern • Systems • Network • Conclusion

4. Dustin Schneider • Education • B.S. in Logistics and Transportation from the University of Tennessee • M.S. in International Logistics (EMIL) from The Georgia Institute of Technology (in Progress) • Career • Dow Chemical – Transportation Department • Norfolk Southern • Trainmaster • Process Improvement • Transportation Planning – Train Scheduling, Car Blocking and Classification, Shipment Scheduling and Monitoring

5. Overview of Rail Industry

6. Railroad Industry • Rail industry is highly interdependent • Rail industry is international • CN operates from Montreal to New Orleans • KCS operates from Kansas City to Mexico City • Rail Industry is represented by AAR (American Association of Railroads)

7. Source: AAR (American Association of Railroads)

8. Warren Buffett • "The nation's future prosperity depends on having a well-maintained rail network that keeps the American economy moving.” • He said Berkshire's $34 billion investment in BNSF is "a huge bet on that company, CEO Matt Rose and his team, and the railroad industry." • “Railroads have become far more efficient over the years. There were a million and a half people employed in the rail industry after World War II. Now there are about— less than 200,000 in the United States, and they’re moving far more goods. So it’s really become efficient.”

10. Statistics Source: AAR (American Association of Railroads)

11. Ton-Miles of Freight by Mode in USA

12. Norfolk Southern - Systems

13. Blocking and Classification MACONP CHATTP CINTIP

14. Classification Yard Hump Receiving Yard Classification Yard Forwarding Yard Mechanical

15. Classification Yard

16. Inbound Train - Chattanooga

17. Outbound Train - Chattanooga CT01 - DCATRP CT02 - FRNFTP CT03 - ROMEP CT04 - CONWAP CT05 - DETP CT06 – CLEVELP CT07 - CSXT CT08 - CINTIP CT09 - LOUIVLP CINTIP ENGINES DCATRP FRNFTP

18. Outbound Train - Chattanooga

19. Blocking and Classification

21. Blocking and Classification • Identify Feasible Blocks • Distance Cost • Link Adjustment Factor • Block Type Adjustment Factor (Priority) • Block Adjustment Factor • Yard Type Cost • Class Yard Adjustment Factor

22. Blocking and Classification • Minimizes relative distance and handlings • Tactical vs. strategic

23. Train Scheduling

24. Train Scheduling • Considerations • Customer and service requirements • Time • Distance • Congestion • Minimize resource usage – manpower, locomotives, track configuration, dwell time, etc. • Tactical vs. strategic

25. Shipment Planning and Monitoring

26. Shipment Planning and Monitoring • Automated re-trip process • Provide ETA’s • Website • EDI – Steamship Lines, Other Railroads, Etc. • Monitor – Customer Service Center • Shipment ETA Accuracy is key corporate metric

27. Shipment ETA Accuracy • Measures proper execution of operating plan • Local pickup and delivery • Train performance • Connections • Shipment consistency and transit time become product of operating plan was operational discipline is established

28. Shipment ETA Accuracy

29. Shipment Planning - Intermodal • Current • Train Arrival • Grounding • In Development • Place to Ramp (PLRM) • Pull from Ramp (PURM)

30. Shipment Planning - Intermodal • Why is Place to Ramp Important? This is the point at which transportation turns car over to intermodal operations • What needs to be done? • Develop scheduled placement to and pull from ramp times • Develop placement event reporting • Develop metric to compare the two

31. Yard Inventory Management • Train Arrival – Report inventory into a yard • Train Departure – Report inventory out of a yard • Track Move – Report movement of cars within a yard • Interchanges – Report movement of cars to or from another carrier • Industry – Report pull or placement of cars at a customer’s facility

32. Train Control System • New generation system necessitated by security risks • System wide dispatching system with disaster recovery capability • Movement Planner optimizes train movements based on business objectives and real time events

33. Track Line View

34. Intermodal Inventory Management • Transportation systems for all traffic • Blocking and classification • Train scheduling • Yard inventory management • Train control • Intermodal specific applications • Intermodal equipment (trailer, container, chassis, etc. • Shipment planning and monitoring

35. Norfolk Southern - Network

36. Norfolk Southern – Business Mix

37. PanAm Southern Corridor Mechanicville Ayer Detroit Bethlehem Chicago NY/NJ Harrisburg Philadelphia Columbus Decatur Heartland Corridor Cincinnati St Louis Lynchburg Pritchard Roanoke MidAmerica Corridor Norfolk Fulton Charlotte Corinth Memphis Birmingham Atlanta Crescent Corridor Shreveport Meridian Meridian Speedway Jacksonville New Orleans Titusville Titusville

38. Meridian Speedway Lathrop Chicago Memphis Atlanta Shreveport Previous Routes New Route Los Angeles

39. Chicago Norfolk Los Angeles Shreveport Previous Routes New Route Meridian Speedway

40. Heartland Corridor Route Heartland Corridor Route Norfolk Southern Intermodal Network • Reduce Transit to Chicago by 1 Day • Will Shave Approx. 225 Route Miles Off Each Container Move to Chicago • Greater Efficiencies NS Intermodal Network Terminals Current DS Route Secondary DS Route Current Single Stack Route Port-Heartland High Speed Doublestack Corridor

41. Project Overview • 30 Tunnels ( 4-VA, 2-KY, 24 WV) • 26 Completed • 8 Through Truss Modifications – All Completed • 3 Overhead Bridges – 1 remaining

42. Three Phases of Tunnel Work • Phase I: October 2007 – May 2009 • Phase II: August 2008 – March 2010 • Phase III: July 2009 – July 2010

43. Virginia Division Map Pembroke Tunnel Eggleston #1 Tunnel Eggleston #2 Tunnel Phase 1 Cowan Tunnel

44. Pocahontas Division Map WV Hemphill #2 Tunnel Big Sandy Tunnel #7 Antler #1 Tunnel Big Sandy Tunnel #4 Hemphill #1 Tunnel Antler #2 Tunnel Twin Branch #1 Tunnel Welch Tunnel Big Sandy Tunnel #3 Twin Branch #2 Tunnel Big Sandy Tunnel #2 Huger Tunnel WB Vaughn Tunnel Big Sandy Tunnel #1 Huger Tunnel EB Williamson Tunnel Big Four #2 Tunnel Hatfield Main 2 Tunnel Hatfield Main 1 Tunnel Big Four #1 Tunnel KY Glen Alum Tunnel Phase 1 Cooper Tunnel Gordon Tunnel Phase 2 West Vivian Tunnel VA Phase 3 Laurel Tunnel Roderfield Tunnel

45. 1st Phase of Crescent

46. Crescent Corridor Riverton Major Terminal Investments

47. Greencastle, PA • Encompasses roughly 209 total acres • Purchase Price- Approx. $20M • Final closing in June 2010

48. McCalla – Birmingham, AL • Encompasses over 311 acres • Purchase price – Approx. $12M • All acquisitions closed by mid December 2009

49. Encompasses almost 949 total acres Purchase price- Approx. $14.5M Acquisitions closed December 30, 2009 Rossville, TN

50. Transportation – Speed29 Hour Goal - Memphis to Harrisburg • Eliminate speed restrictions in cities and other areas • Upgrading signal systems - 60 mph instead of 40 or 50 mph. • Modifying track geometry- faster speeds around curves • Evaluate faster speeds for intermodal trains around curves – top of rail lubrication • Improve interlockings and connections • Motive power review • Cars with ECP brakes