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

2. Center of Innovation for Logistics 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. Center of Innovation for Logistics What is Logistics? Who Cares? What is Georgia’s Story?

4. Center of Innovation for Logistics A …………………………………………………. B What is Logistics? And what makes a “Logistics Industry”? “…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.” The line between disorder and order lies in logistics... Sun Tzu

5. Center of Innovation for Logistics VOLUME VELOCITY VISIBILITY 3 V’s of Logistics

6. Center of Innovation for Logistics … Every Supply Chain is unique

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

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9. Employment Size

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11. … still a tight race!

12. Center of Innovation for Logistics Who cares? What is Logistics? Who cares? What is Georgia’s Story?

13. Center of Innovation for Logistics 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. Center of Innovation for Logistics 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. Center of Innovation for Logistics What is Georgia’s Story? What is Logistics? Who cares? What is Georgia’s Story?

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22. RAIL TONS

23. Center of Innovation for Logistics So what really is Georgia’s rail impact?

24. Center of Innovation for Logistics 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. Center of Innovation for Logistics 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. Center of Innovation for Logistics 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. Center of Innovation for Logistics 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. Center of Innovation for Logistics 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 …

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

32. Center of Innovation for Logistics BACKUP DETAIL SLIDES

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35. 2007 Truck Flow

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37. TRUCK TONS

38. Center of Innovation for Logistics RAIL TONS

39. Center of Innovation for Logistics Logistics Focused Education Resources

40. Center of Innovation for Logistics 2027 Truck TonsTruck ValueTruck Loads Intra-Georgia 328,141,735$426,861,660,70535,374,065 Export from Georgia 200,086,705$541,481,764,40615,356,021 Thru-Georgia 278,237,377$1,067,694,758,48415,910,278 Import into Georgia 152,183,974$475,674,612,34113,929,517 TOTAL:958,649,791$2,511,712,795,93680,569,881 2007 Truck TonsTruck ValueTruck Loads Intra-Georgia225,997,976$220,086,817,32923,562,840 Export from Georgia118,071,047$277,787,560,0009,348,556 Thru-Georgia190,323,924$663,233,710,00010,734,561 Import into Georgia106,381,822$281,806,330,0008,851,269 TOTAL:640,774,768$1,442,914,400,00052,497,226

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43. Supply Chain Technology

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45. 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. Four Main 3PL Segments (defined)