Rule 22 Automation Update ACACSO – Austin, TX November 2014

Background Recommended by Centralized Car Hire TAG (CCH) in September 2013 Unanimously approved by Equipment Assets Committee (EAC) in January 2014 TAG appointed by EAC and meetings began in February 2014 Approved by RPSWC in August 2014 contingent on EAC approval of Rule 22 verbiage and business rules

Tag Members GATX Greenbrier Companies GE Progress Rail Services Railinc ShipXpress TTX Company CN CP CSXT GWRR KCS NS UP

TAG Goals Create a set of standard business rules Simplify the existing Rule 22 verbiage Low cost industry implementation – LCS message Not to change the intent and current application of the rule

System Processing LCS message – To car mark owner or rack owner for multilevels Timing of transactions – No change to existing LCS processing rules (5 days) – Reclaim processing will evaluate 20 days of event reportings Covers 95% of all reclaim transactions “Clean-up” process – Beginning and ending events < 20 days no further processing – Beginning and ending events > 20 days Process will analyze events to ensure relief was appropriate If relief was not appropriate, a reversing transaction will be generated

Bilateral Agreements Designating non-participating carriers for relief – Loading point and/or holding point Shipper pools – designated by pool operator Joint, National, RELOAD pools – designated by any pool participant Other agreements – Limit or exemption of reclaim time and/or location – Exemption of specific cars from relief

Serving Areas vs. Switch Districts Serving areas - defined by each carrier based on: – Geography – 1 st two digits of SPLC – Railroad operations Information availability – Transparency – Automated notification when changes are made Dispute – Arbitration through Car Hire Rule 17

Shipper Pools Eligible equipment – Umler will reflect a pool number with a carrier’s numeric code as the first three digits (not 999 or 998) and the Pool Type in Umler must be “C” or – The Transportation/Transportation Condition Code will be C, DC or EC Eligible carriers – Only the pool operator or carriers designated by bilateral agreement are eligible for relief – For example, cars in pool (NS) will be allowed holding point and loading point relief – Allows for bilateral agreements between pool operator and other roads for loading point and/or held short reclaims

Joint Pools Eligible equipment – Umler will reflect a pool assignment that starts with 998 and the Pool Type in Umler must be “C” or – The Transportation/Transportation Condition Code will be C, DC or EC and – The handling carrier will be a participant in the pool. Eligible carriers – Only the carriers that participate in the pool will be eligible for relief. – For example, if pool is operated by carrier A and B, either carrier A or B will be allowed relief – Either of the pool participants will have the ability to establish bilateral agreements with other roads for loading point and/or held short reclaims

National Pools Eligible equipment – Umler will reflect a pool assignment that starts with 999 and the Pool Type in Umler must be “C” or – The Transportation/Transportation Condition Code will be DN or N – The North American Boxcar Pool (NABP) and specific equipment pools operated by TTX will be excluded from the relief process Eligible carriers – Any carrier that has contributed equipment to the pool will be eligible for relief – Any of the participants in the pool will have the ability to establish bilateral agreements with other roads for loading point and/or held short reclaims

National Pools - RELOAD RELOAD Eligibility – All carriers that participate in the TTX Reload Process will be eligible for holding point and loading point – Participating carriers will be identified via information contained in Umler (pool number and/or pool operator) Bilateral agreement – Any participant in the RELOAD pool will have the ability to establish bilateral agreements with other roads for loading point and/or held short reclaims

Loading Point – Subject to Demurrage System design: – All equipment subject to demurrage/storage unless updated by carrier – Beginning transaction – empty arrival – Ending transaction – empty placement (actual/constructive) – Missing events: Arrival or placement – no relief allowed LCS Transactions: Arrival at Loading Point EDelivery - R222 PlacementEReceipt - R222 Release LoadedL

Loading Point – Exempt from Demurrage System design: – All equipment subject to demurrage/storage unless updated by carrier – Beginning transaction – empty arrival – Ending transaction – release load or first loaded event – Missing events: Arrival – no relief allowed Release – relief ends on first loaded record LCS Transactions: Arrival at Loading PointEDelivery R222 PlacementE Release LoadedLReceipt R222

Holding Point System design: – Beginning transaction – empty arrival – Ending transaction –empty departure (same location) < 24hrs between beginning and ending transactions – Missing events: Arrival or release– no relief allowed LCS Transactions: Arrival at Holding PointEDelivery - R224 Departure from Holding PointEReceipt - R224

Next Steps TAG actions – Complete proposed business rules – Complete proposed Rule 22 verbiage change Potential project – Requires approval from EAC

Questions Robert Sanford Director Revenue Accounting Support Services