The Growing Role of Rail Cargo for Steel Logistics Eurometal Steel Net Forum Logistics 2207/00/08 June 26, 2008

1 Freight railroad company created in October 2006 by merging the CFL conventional freight division and the internal transportation department of ArcelorMittal in Luxembourg Shareholders : About CFL cargo

2 CFL cargo activities Industrial feeder services within ArcelorMittal’s Luxembourg mills Shunting services in Bettembourg, incl. single wagon feeder services, shipping/reception of single wagon loads from all across Europe, and constitution/disassembly of full trains connected to major European hubs Feeder services to the SaarLorLux region for increased consolidation of volumes Competitive door-to-door long-haul international transports, accomplished by own means or together with partners, depending on which configuration offers optimal cost Feeder and long-haul services in Germany and Denmark through subsidiaries CFL cargo Deutschland and CFL cargo Danmark Wagon maintenance through the maintenance and repair shop Ateliers de Pétange

3 CFL cargo wagon fleet Order for 540 additional Rbnss 25m placed, first deliveries 12/2008 Well adapted up to date wagon assets are key for steel customers

4 Spain Barcelona/Marseille Northern Italy Switzerland Benelux Antwerp/Rotterdam Northern Germany Scandinavia Hamburg/Bremen Poland Czech Rep. CFL cargo aims to develop Bettembourg as one of the major distribution hubs for European ports offering railroad connections to major destinations across Europe Examples of existing traffics out of Bettembourg: Antwerp Italy (Desio, Torino, Parma) Le Boulou for Spain Under development: Northern Germany Poland CFL cargo traffics - geographical coverage

5 Increasing interest to transfer goods from road to rail due to the fast growth of the transportation market, increasing congestion of the European road network, dramatic rise of fuel costs, more demanding environmental constraints, and changes in truck driver working conditions Market demand for a change in mindset towards a customer-oriented approach through improved quality, reliability & value creation, whereas incumbents are still turning their focus to internal issues, struggling with size, restructuring, end-of-lifetime rolling stock and social conditions Most customers are multinationals, pan-European companies wanting traffics from one single source, with one single responsibility spanning all across Europe, while incumbents very often still have a strong national focus A few players have already built up a strong know-how on handling international traffics. Improvement of railroad infrastructure, internationalisation of access conditions and licenses as well as rolling stock certification are still missing, creating cumbersome hurdles and prohibitively slowing down the process to build seamless pan-European traffics. Major challenges faced in today’s rail freight market

6 Railroad logistics are playing a more and more important role for steel industry Railroad transportation is environmentally friendly with 5x lower CO 2 emissions than road transportation The combination of a fast growing transportation market, exploding energy costs and increasing road congestion is boosting rail applications in new domains where rail formerly was unable to compete Railroad transportation is well adapted to the steel industry’s needs, given its ability to handle high bulk volumes of raw materials (such as iron ore, coal, scrap) as well as finished products (such as coils or beams and sheet piles with lengths above 20 m) Advanced planning and new logistics concepts, with shortening transportation time, will allow to improve predictability & traceability and to reduce wagon turnaround time, thus leading to reduced total costs & reliable time of arrival estimations Growing role of rail freight logistics for the steel industry

7 Customer driven collaborative traffic planning integrated with customers’ production planning systems

8 Listening to customers and reacting to their concerns Single responsibility door-to-door across Europe Optimised & customised supply chains, well adapted to the customers’ needs Advanced train scheduling & tracking tools integrated with the customers’ production planning Availability of a dedicated wagon fleet, providing a competitive advantage Reliable & long-lasting partnerships Competitive total costs What customers want Future preferred partners of industry: Railroad operators able to change their mindset towards a customer-oriented approach and value creation