Alp Presentation Draft 4 20 16

Amazon-ing
Trained Solutions
1
1
Agenda
I. Overview of Disruptor Organization
II. 3D Printing
III. 3rd Party Logistics Providers
IV. Visibility
V. Driverless Trucks
VI.Collapsible Containers
2
2
Disruptors are Organized into Watch and Do

Watch
Do
3D Printing
Visibility
3rd Party Logistics Providers
Autonomous Vehicles
Collapsible Containers
The
The Internet
Internet of
of Things
Things &
& Industry
Industry 4.0
4.0
3
3
The Internet of Things Supports all the Disruptors
Enterprise 3D Printing Grows and Refines

3D Printing Industry Expected Revenue
1000
800
600
Revenue (in million $)
400
200
0
5
5
3D Printing software reads a digital file and uses additive

manufacturing to make a 3-dimensional solid
67% of Manufacturers already own
Tool for prototyping, product development, innovation
Accounts for 95% of printed objects by volume
3D Printing Increases Time and Cost Expectations

3-D Printing Industry Market Segmentation
Total Industry:
Consumers; 11%
Medical companies; 23% $492.4 million
Manufacturing Companies; 39%

Construction and architecture companies; 27%
6
6
Time and
Efficiency
Cost
Business and
Manufacturing Plans
Time to market
Demand response
Lead time
Materials
Inventory
Labor
Materials
Flexibility
Digital Business
Component Assembly
Prepare through Monitoring, Visibility, and Network Adjustments

Time and Efficiency
Cost Sensitivity
Raw Materials for

Component Printing
Re-shoring and
Fragmented
Manufacturing Market
More Customer
Acquisition
Opportunities
7
7
Introduce new infrastructure to communicate costs and time.

Clearly defined lead times are paramount
Monitor the adaption of 3D printing, especially in industries

like footwear, toys, ceramics, and major partners of CSX
Rebalance customer portfolio to make it easy for smaller

manufacturers to partner
Adjust network to respond to localized production and

transportation
Introduce new services such as logistics consulting
3PLs offer more service through their value chain

Department Responsibilities
Raw material control, quality control,
planning, and scheduling
Manufacturing, packaging, quality
check, production control,
maintenance
Inbound Logistics
Operations
Finishing of goods, material

handling, dispatch, deliver, invoicing
Outbound Logistics
Customer support management,

order taking, market research, sales
optimization
Marketing and sales
Maintenance, warranty, training,

installation, upgrades of products
After-sales services
8
8
Value Added
Service
provided by
contract
logistics
provider
3PL Consolidations are on the Rise

3PL Acquisitions over $100M from 1999 15
Key Takeaways
M&A increasing
turns firms into logistics one-stop shops that
2015 Consolidation
service all its clients supply chain functions
Highly concentrated
Success Stories
XPO Logistics acquired Conway and Norbert Dentressangle
10
5
Result
157.2% revenue growth in 2015 of $606.3 million up from

$235.7 million in 2014
Column1
Success Stories
FedEx acquired French parcel delivery company TNT
Estimated 2014 Market Share for International Shipments in Europe
Others;FedEx;
12% 10%
TNT; 12%
DHL; 41%
9
9
UPS; 25%
Result
Increased market share from 10% to 22% in Europes

express delivery market
Impact on CSX
Logistics one stop-shops attract businesses outsourcing

more than one of their logistics functions (ex: intermodal and
transportation management)
Provide visibility from pre-rail to the end user
Likely increase customers willingness to pay higher prices

for premium services
Potentially take clientele from CSX
3PLs affect Service Expectations and Business Volume

Improve ShipCSX
App
Acquire a 3PL
10
10
Provide end-toend supply chain

visibility
Extends customer
base
Diversifies service
offerings
Expands
geographic
footprint and
access to
networks
Value added services

Provide real-time visibility
to customers
Shift perception of
ShipCSX app from
optional to necessary tool
Partner with 3PL
Horizontal alliances
Extends customer base
Diversifies product and
service offerings
Greater access to
transportation networks
Provide end-to-end supply
chain visibility
Visibility is an Essential Business Component
In a survey conducted by the Aberdeen Group of companies with predominately global

supply chains 63% of companies indicated visibility as a high priority for improvement
In CSXs survey, 94% responded to the question of over the next 5 years what is the
likelihood of supply chain visibility playing a role in your supply chain with either
extremely likely, very likely or moderately likely
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11
Opportunities to Expand Visibility
12
12
Recommendation: More Visibility and Freemium Pricing Model
13
13
Offer more visibility information through the

ShipCSX App
Use a freemium price versioning strategy
Maintain relationships with customers and

outstanding service
Offering the option to have access to visibility

information at a higher price point allows CSX
to determine
Demand
Scalability
Driverless trucks hinder economic growth
8.7 Million truck drivers exist, and also create network effects such as motels
businesses
Truck driver: the most common occupation by state
14
14
Driver Shortage Still on the Rise

Truck Driver Shortage Growth
40000
35000
30000
25000
20000
20000
15000
10000
5000
0
2008
38000
31000
2011
2014
Driverless Trucks will significantly affect the landscape of the trucking industry
Driver Shortages will be addressed with more companies going autonomous
CSX now has the potential for improved first mile and last mile delivery
Source : American Trucking Association. Driver Shortage Analysis 2015
15
15
Driverless Truck timeline is closer than expected
http://www.huffingtonpost.com/scott-santens/self-driving-trucks-are-going-to-hit-us_b_7308874.html
16
16
Opportunities for CSX to sophisticate operations

Driver Shortage
Eliminates the ever lasting problem logistics companies face.

CSX now neednt worry about pre and post freight transportation
Last Mile Delivery
Autonomous drones to help delivery to doorstep, as CSX looks

to enhance last mile delivery
Line Haul
Transportation
Environmental Impact
Safety
17
17
Helps to transport goods from offshore warehouses to

intermodal terminal
Lesser Carbon gas emissions through driverless trucks by factor

of 20%
A founding pillar for CSX. No requirement for drivers to stop

after 11 hours, and not prone to human error.
Implement Immediately to Respond to Autonomous Vehicles
Pros
First movers in the industry
Improved last miles delivery
Eliminates driver shortage
problem
Availability of outsourcing
18
18
Cons
Fairly new technology

Not fully tested
Government regulations
High switching costs
Collapsible Containers Reduce Space Requirements for

Empty Containers
Folds along hinges

Only requires forklift
Fits 5 containers in
space of 1 noncollapsed
Takes 30 seconds
19
19
Empty Containers are Stacking Up

Number of Containers Shipped From Ports
(Expressed as ratio vs. previous year)
Growing number of
empty containers due
to international trade
imbalance
Easier to ship
containers back to
refill quickly for max
revenue
Costing shipping lines
billions per year
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
LA
NY/NJ
2014
2015
Source: WSJ Logistics Report At U.S. Ports, Exports Are

Coming Up Empty
20
20
Collapsible Containers Improve Efficiency
Warehouse Fees
Shorter Length
Loading Speed
Fuel Efficiency
Smaller Footprint
21
21
Recommend CSX Invests with customers and competitors

Cons
Pros
Less Space
Smaller facilities
Shorter trains
Lower fees
Initial Investment poses

risk
Who buys first
Benefits others more than CSX
Retrofit or buy new?
Image greener
Training/learning time
Reduce LTV cost by 80%
Reduced rates possible for

customers with collapsible
Benefits truckers and

international shippers
more
Exact time to deploy

uncertain
Share
Share risk
risk and
and cost
cost by
by investing
investing with
with other
other container
container shippers
shippers
22
22
Acting earlier saves money

Technology is available
now
Could be seen as more
innovative and
progressive railroad
Competition will benefit
from tech more dont
let them get head start
23
23
Conclusion
Watch
3D Printing
3rd Party Logistics Providers
24
24
Do
Visibility
Autonomous Vehicles
Collapsible Containers

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Amazon-ing

Disruptors are Organized into Watch and Do

3rd Party Logistics Providers

The Internet of Things Supports all the Disruptors

Enterprise 3D Printing Grows and Refines

3D Printing software reads a digital file and uses additive

67% of Manufacturers already own

Tool for prototyping, product development, innovation

Accounts for 95% of printed objects by volume

3D Printing Increases Time and Cost Expectations

Manufacturing Companies; 39%

Prepare through Monitoring, Visibility, and Network Adjustments

Raw Materials for

Introduce new infrastructure to communicate costs and time.

Monitor the adaption of 3D printing, especially in industries

Rebalance customer portfolio to make it easy for smaller

Adjust network to respond to localized production and

Introduce new services such as logistics consulting

3PLs offer more service through their value chain

Finishing of goods, material

Customer support management,

Marketing and sales

Maintenance, warranty, training,

3PL Consolidations are on the Rise

XPO Logistics acquired Conway and Norbert Dentressangle

157.2% revenue growth in 2015 of $606.3 million up from

FedEx acquired French parcel delivery company TNT

Estimated 2014 Market Share for International Shipments in Europe

Increased market share from 10% to 22% in Europes

Logistics one stop-shops attract businesses outsourcing

Provide visibility from pre-rail to the end user

Likely increase customers willingness to pay higher prices

Potentially take clientele from CSX

3PLs affect Service Expectations and Business Volume

Provide end-toend supply chain

Value added services

Partner with 3PL

Visibility is an Essential Business Component

In a survey conducted by the Aberdeen Group of companies with predominately global

Opportunities to Expand Visibility

Recommendation: More Visibility and Freemium Pricing Model

Offer more visibility information through the

Use a freemium price versioning strategy

Maintain relationships with customers and

Offering the option to have access to visibility

Driverless trucks hinder economic growth

Driver Shortage Still on the Rise

Driverless Truck timeline is closer than expected

Opportunities for CSX to sophisticate operations

Eliminates the ever lasting problem logistics companies face.

Last Mile Delivery

Autonomous drones to help delivery to doorstep, as CSX looks

Helps to transport goods from offshore warehouses to

Lesser Carbon gas emissions through driverless trucks by factor

A founding pillar for CSX. No requirement for drivers to stop

Implement Immediately to Respond to Autonomous Vehicles

Fairly new technology

Collapsible Containers Reduce Space Requirements for

Folds along hinges