Todd PolandNovember 7, 2012

(Plagiarized Lisa Gering’s November 10, 2010 Presentation)

SCO90 What it is? What it Does? How does it affect Car Hire?

22

A special car order to efficiently move surplus, empty, rail cars to the home railroad where there is no direct connection between the handling railroad and the car owner Approved by the AAR, EAC, and SOMCMinimizes the time, car hire, and transportation costs involved in returning these cars to the railroad owners or controllers For railroad marked cars as well as private marked cars with a railroad in the UMLER Lessee fieldInsures owning road gets equipment back into service it was acquired to protect.

What is Special Car Order 90?

3

Example for an MMA Box Car

San Francisco *

Bangor (MMA)

UP

NS

CPRS

*If the car started its loaded movement on the owner road or moved loaded via the owner; and upon unloading the holding road chooses not to reload the car, the car must move back in reverse of loaded shipment until it is on a direct connection of the car owner.

4

Example for an MMA Box Car

Portland

San Francisco *

Bangor

UP

•*Upon reloading this free running unassigned MMA Box Car will be assigned a•Transportation Code = T and Transportation Condition Code = blank and is

governed by SCO90 rules for empty return

5

Example for an MMA Box Car

Portland

San Francisco

Jacksonville

Bangor

UP

NS

CSXT

6

Example for an MMA Box Car

6

Petersburg

Portland

San Francisco

Jacksonville

Bangor

CS

XT

7

Example for an MMA Box Car

Equipment Mark

Delivery Carrier

Receiving Carrier Outlet City

Outlet State

MMA CSXT CN

CECILE PQ

MMA CSXT CN

TOLEDO OH

MMA CSXT CPRS

SELKIRK NY

MMA CSXT CPRS

BUFFALO NY

Petersburg

Portland

San Francisco

Jacksonville

Bangor

CS

XT

From SCO90 Master Table on Railinc Website

8

Example for an MMA Box Car

Petersburg

Portland

San Francisco

Jacksonville

Bangor (MMA)

Selkirk (CPRS)

SCO90 Outlet

CS

XTEquipment

MarkDelivery

CarrierReceiving

Carrier Outlet CityOutlet

State

MMA CSXT CN

CECILE PQ

MMA CSXT CN

TOLEDO OH

MMA CSXT CPRS

SELKIRK NY

MMA CSXT CPRS

BUFFALO NY

From SCO90 Master Table on Railinc Website

99

GeographyDelivering Carrier / Receiving Carrier / BothSufficient Car Ownership Use of Transportation Codes and Condition Codes drives emtpy car movementsEfficiencies in Empty Car Time and Miles are being realized

Who Participates and Why

1010

To Identify Empty Cars Subject to SCO90 RulesT – free running unassigned car. Cars can be reloaded by any carrier in the SCO90 route homeE – subject to CSD145 and CSD155 pool assignment that are reloaded by other than the pool assigned road. Generally can not be reloaded Codes added and removed in Umler on a daily basis

Transportation Code & Transportation Condition Codes

11

AAR Circular Number OT-10 (Circular TD-5)

TC/TCC

Can RR Load Car without owner permission?

Empty Car On Indirect Connection

Empty Car On Direct Connection Order

EC No SCO90 outlet. If no outlet reverse route

To owner/car leasing railroad or reverse route if reverse route carrier is also direct connection.

SCO90/CSD145, 155, 435

(Shipper Assigned)

EG No Same as above Same as above SCO90/CSD145, 435

(Contaminated Service)

EJ Yes Same as above Same as above SCO90/CSD145

(Agents Pool)

EP No Same as above Same as above SCO90/CSD145, 155, 435

(Commodity Pool)

ER No Same as above Same as above SCO90/CSD145, 155, 435

(Agents Pool)

T Yes Same as above Same as above SCO90

TO No Same as above Same as above CSD175/SCO90 (Lease Termination

TU Yes, to or via home railroad

Same as above Same as above CSD 150/SCO90 (Unassigned Car)

Empty handling options for the various Transportation Codes / Transportation Condition Codes for railroad marked freight cars / railroad leased freight cars

12

TC / TCC Description

T General service or unassigned railroad marked or privately marked cars with a railroad in the Lessee Field in Umler, boxcars, flat cars, and gondolas covered by SCO 90.

TU Special equipped railroad marked or privately marked with a railroad in the Lessee Field in Umler, cars covered by the loading provisions of CSD 150 or 155 and subject to the empty handling provisions of SCO 90.

TO Railroad marked or privately marked with a railroad in the Lessee Field in Umler cars subject to the empty handling provisions of SCO 90 being returned home for lease termination or repairs. Also car is subject to the provisions of CSD 175.

T: Transportation Code & Transportation Condition Code that are applicable when the owner was not in the last loaded route.

13

TC / TCC Description

EC A railroad marked car or the private car with a railroad in the Lessee Field in Umler assigned to a Shipper Pool under CSD 145 or 155 that has been reloaded by other than the pool assigned road and will return empty via SCO 90. Car assigned to a C pool.

EG A railroad marked car or the private car with a railroad in the Lessee Field in Umler assigned to a Contaminated Commodity Pool under CSD 145 or 155 that has been reloaded by other than the pool assigned road and will return empty via SCO 90. Car assigned to a G pool.

EJ A railroad marked car or the private car with a railroad in the Lessee Field in Umler assigned to an Agent Pool under CSD 145 or 155 that has been reloaded by other than the pool assigned road and will return empty via SCO 90. Car assigned to a J pool.

EP A railroad marked car or the private car with a railroad in the Lessee Field in Umler assigned to a Commodity Pool under CSD 145 or 155 that has been reloaded by other than the pool assigned road and will return empty via SCO 90. Car assigned to a P pool.

ER A railroad marked car or the private car with a railroad in the Lessee Field in Umler assigned to an Agent Pool under CSD 145 or 155 that has been reloaded by other than the pool assigned road and will return empty via SCO 90. Car assigned to a T pool.

E: Transportation Code & Transportation Condition Code that are applicable when car is reloaded by a railroad other than the Umler Pool assigned railroad.

14

TC/TCC Stats

TC/TCC Average

T 10,964

TO 2

TU 102

EC 2,163

EG 12

EJ 188

EP 2,988

14

Average count in Umler per month Sep09 – Oct10

1515

Goal of flow balancing is to redistribute empty return flows based on loaded traffic patterns for return empty movements, save empty car miles and attempt to balance empty car movement costs across the North America rail system. TRAIN II data (TRAIN03/10 and TRAIN01/31 events) is used to capture the loaded movements and empty return flows of cars covered by SCO90Actual car hire and transportation costs are used to assign debits and credits used in a Carrier Obligation Adjustment formulaReverse route cars are not included Reports on Railinc website

SCO90 Quarterly Balancing

16

Debit / Credit Calculations for Balancing

San Francisco

Bangor (MMA)

UP

NS

CPRS

If UP does not reload car; no debits or credits will be applied.

17

Debit / Credit Calculations for Balancing

San Francisco

Bangor (MMA)

UP

NS

CPRS

If UP does reload car; CPRS and NS receive a loaded intermediate debit. UP receives a loaded junction destination (JD) debit

18

Debit / Credit Calculations for Balancing

Portland

San Francisco *

Bangor

UP

UP gets a terminating credit (TC) equal to the inbound JD debit. No debit is calculated for UP’s online load to Portland

19

Debit / Credit Calculations for Balancing

Portland

San Francisco

Jacksonville

Bangor

UP

NS

CSXT

UP, NS, and CSXT would receive no loaded debits for routing to Jacksonville because the MMA car was loaded closer to the owner

20

Debit / Credit Calculations for Balancing

Petersburg

Portland

San Francisco

Jacksonville

Bangor

CS

XT

CSXT receives no loaded debits for local shipment to Petersburg

21

Debit / Credit Calculations for Balancing

Petersburg

Portland

San Francisco

Jacksonville

Bangor (MMA)

Selkirk (CPRS)

SCO90 Outlet

CS

XT

CSXT receives a origin junction (OJ) credit from Petersburg to Selkirk its SCO90 outlet. CPRS receives an empty intermediate credit.

2222

Quarterly reports posted on Railinc website in SCO90 Application Obligation Adjustments Detail of Intermediate Traffic; Summary of Junction-

Destination and Origin-Junction Traffic; Mileage Debits and Credits; Termination Credits; Utilization Credits; and Closer Credits

Detail of Junction-Destination and Origin-Destination Traffic; Mileage Debits and Credits

Utilization Credits; Termination Credits; and Closer Credits

2009 SCO90 Automation Project

2323

Data Manager SCO90 Master Zero Mileage Pairs Joint Industry Pairs ECODE Exception Pool Numbers

2009 SCO90 Automation Project

2424

Railroad marked equipment that has never located on the car owner’s propertyRailroad marked equipment that has not been loaded on the railroad to which it is assignedRailroad marked equipment that has not been loaded on its leasing railroadPrivately marked equipment prior to first loadFor empty handling refer to OT-10 Circular TD-5

Transportation Code D – SCO200

2525

Questions?

2626

One day a farmer's donkey fell down into a well. The animal cried piteously for hours as the farmer tried to figure out what to do.

                    Finally, he decided the animal was old, and the well needed to be covered up anyway; it just wasn't worth it to retrieve the donkey.

He invited all his neighbors to come over and help him.  They all grabbed a shovel and began to shovel dirt into the well. At first, the donkey realized what was happening and cried horribly.  Then, to everyone's amazement he quieted down.

A few shovel loads later, the farmer finally looked down the well. He was astonished at what he saw.  With each shovel of dirt that hit his back, the donkey was doing something amazing. He would shake it off and take a step up… As the farmer's neighbors continued to shovel dirt on top of the animal, he would shake it off and take a step up.

Pretty soon, everyone was amazed as the donkey stepped up over the edge of the well, and happily trotted off!

Life is going to shovel dirt on you, all kinds of dirt.  The trick to getting out of the well is to shake it off and take a step up. Each of our troubles is a stepping stone.  We can get out of the deepest wells just by not stopping, never giving up!  Shake it off and take a step up.

WHAT A DONKEY!!!

2727

NOW ....... Enough of that!  The donkey later came back and bit

the farmer who had tried to bury him.  The gash from the bite got infected and the farmer eventually died in agony from septic shock.

MORAL FROM TODAY'S LESSON:

When you try to cover your ass,it always comes back to bite

you.

Remember the five simple rules to be happy;

1. Free your heart from hatred – Forgive!

2. Free your mind from worries - Most never happen?

3. Live simply and appreciate what you have.

4. Give more.

5. Expect less.