bert easthope - genesee & wyoming australia -strategies to grow rail’s share of container...
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Australia’s premier conference for the freight industry took place in Melbourne from 9-10 September. The expansive program covered issues critical to the continued sustainability of the industry. For more information about the event, please visit http://bit.ly/1uZWJSzTRANSCRIPT
1 Genesee & Wyoming Inc. September, 2014
AusIntermodal 2014
Genesee & Wyoming Australia
2 Genesee & Wyoming Inc.
Forward-Looking Statements This presentation contains “forward-looking statements” regarding future events and the future
performance of Genesee & Wyoming Inc. that involve risks and uncertainties that could cause
actual results to differ materially from those expressed or forecasted, including, but not limited
to, economic conditions, customer demand, increased competition in the relevant market, the
integration of RailAmerica railroads, and others, many of which are beyond our control. The
Company refers you to the documents that it files from time to time with the Securities and
Exchange Commission, such as the Company’s Forms 10-Q and 10-K, which contain additional
important factors that could cause its actual results to differ from its current expectations and
from the forward-looking statements discussed during this presentation. Forward-looking
statements speak only as of the date of this presentation or the date they were made.
Genesee & Wyoming Inc. does not undertake, and expressly disclaims, any duty to update any
forward-looking statement contained in this presentation whether as a result of new information,
future events or otherwise, except as required by law.
3 Genesee & Wyoming Inc. Private & Confidential
Agenda
1. Genesee & Wyoming Inc. Overview
2. Genesee & Wyoming Australia Overview
3. Genesee & Wyoming Australia
Intermodal Business
4. Genesee & Wyoming Australia
Intermodal Performance
4 Genesee & Wyoming Inc.
• Railroads: 112 worldwide with ~24,000 km of track and over 2,000 customers
• People: 5,000 worldwide
• Equipment: >1,000 locomotives and 22,000 wagons
• Annual Carloads: ~1.9 million
• Public Company: New York Stock Exchange-listed (GWR) with ~A$6 billion market capitalisation
• Operations: 40 U.S. states, four Canadian provinces, four Australian states & one territory, the Netherlands and Belgium
• Contract Switching & Port Operations: Serve 37 ports and ~50 industrial facilities and mines
Genesee & Wyoming Inc.
5 Genesee & Wyoming Inc.
The original Genesee & Wyoming Railroad 14 miles in upstate New York
serving one customer
Genesee & Wyoming Operations - 1899
5
6 Genesee & Wyoming Inc.
Genesee & Wyoming Operations - 2014
7 Genesee & Wyoming Inc.
Our Core Purpose
To be the safest and most respected rail service provider in the world.
8 Genesee & Wyoming Inc.
Industry-Leading Safety Performance
3.0 2.9
1.8
1.1 1.1 1.1 1.1 0.9
0.7
FRA
Gro
up
2
FRA
Gro
up
3
KC
S
UP
Cla
ss I
Avg
NS
BN
SF
CS
X
G&
W
Rai
lroad
s
G&W Peer Group
Large US Rail Roads
2013 Injury Frequency Rate per 200,000 man-hours
9 Genesee & Wyoming Inc.
Industry-Leading Customer Satisfaction
Genesee & Wyoming Australia Overview
11 Genesee & Wyoming Inc.
12 Genesee & Wyoming Inc.
Genesee & Wyoming Australia (GWA)
• 3,500+ km of owned track (2,200 km Tarcoola to Darwin)
• Accredited rail operator in six states and territories
• 550 employees • 100 locomotives and 1,000 wagons • 40+ daily train starts across South Australia,
the Northern Territory and Victoria
Key Freight Commodities • Intermodal • Iron Ore • Grain • Manganese • Copper • Gypsum
13 Genesee & Wyoming Inc.
GWA Safety Performance
0.48 0.81
0.55 0.53 0.27 0.47 0.0
1.0
2.0
3.0
2006 2007 2008 2009 2010 2011 2012 2013 14 YTD
1.42
Injury Frequency Rate per 200,000 Employee Hours
14 Genesee & Wyoming Inc.
G&W History in Australia Since 1996 1997
• GWI privatises Australia National’s South Australia business
1999 • Start-up of intra-facility contract to serve OneSteel Whyalla (now Arrium)
2000 • Formation of Australian Railroad Group (ARG) with partner Wesfarmers • ARG buys Westrail, owns and manages above and below rail services
2001 • GWI invests in FreightLink - begins operating construction trains • GWI crews operate first FreightLink train (2004)
2006 • QR and Babcock & Brown make unsolicited offer to purchase certain ARG assets • GWI retains original SA business, names it Genesee & Wyoming Australia (GWA)
2010 • GWA purchases FreightLink, expanding presence in central Australia
2012 • GWA signs long-term agreement to serve Arrium operations in South Australia
2013
• Bought in-house Terminal Operations - Alice Springs, Tennant Creek, Katherine and Darwin • Insourcing of track maintenance • Significant investment in locomotives & inline fuelling capability
2014 • Insourcing of mechanical maintenance
Genesee & Wyoming Australia Intermodal Business
16 Genesee & Wyoming Inc.
Intermodal Overview • Services departing Adelaide and Darwin 6 Days per week • Enroute services to Alice Springs, Tennant Creek and
Katherine • Container Services (both refrigerated and general) • Piggyback Services (bulk liquids trailers) • Terminals (Adelaide, Alice Springs, Tennant Creek, Katherine
and Darwin) • Commodities Include:
• Dry Groceries • Chilled/Frozen Groceries • Building/Construction Material • Automotive Vehicles and Parts • Mining Consumables • Liquor • Mail
17 Genesee & Wyoming Inc.
Customer Expectations • Reliability
– Trains arriving and departing in accordance with schedules
• Service – Capacity on scheduled services – Pick up and drop off of containers when required or in accordance with
schedules
• Competitive pricing – Ensuring that customers received competitive pricing for the service provided
18 Genesee & Wyoming Inc.
GWA Reliability Performance
*Freight Availability Target is 90%
19 Genesee & Wyoming Inc.
Initiatives to Improve Reliability
• Investment New Locomotives - 9 x 4,300 AC Locomotives – for Intermodal & other business were delivered June 2012 Track
• Insourcing of Track Maintenance.
• Katherine to Darwin rail grinding.
• Flood mitigation initiatives
• Ballasting and tamping programme for the complete Tarcoola to Darwin line
20 Genesee & Wyoming Inc.
Initiatives to Improve Reliability
• Operating initiatives
– Inline fuelling - Purchase of equipment for In-Line fuelling (Intermodal) – five systems purchased
– Reviewed train plan and schedules as a consequence of operational changes
21 Genesee & Wyoming Inc.
Freight Availability – Northbound
22 Genesee & Wyoming Inc.
Improving the Service
• Insourcing Terminal operations – New lifting equipment - Purchased of new lifting equipment for Alice Springs
& Darwin
– Engaging Employees to undertake the range of functions associated with Intermodal business
• Customer Communications – Single point of contact – Out of course running advice – Incident coordination for customers – Regular customer meetings
23 Genesee & Wyoming Inc.
Intermodal Business – Northbound
24 Genesee & Wyoming Inc.
Drivers for increased task
• Increase in domestic growth in the NT
• Previous customers returning to rail
• Road customers converting to rail
25 Genesee & Wyoming Inc.
The Future
• Continue to provide high levels of reliability and services over sustained periods
• Continue to work with our customers to ensure their logistics needs are being met for both existing and new business
• Seek out further opportunities for road to rail conversions
26 Genesee & Wyoming Inc.