Amazon-ing

Trained Solutions
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Agenda
I. Overview of Disruptor Organization
II. 3D Printing
III. 3rd Party Logistics Providers
IV. Visibility
V. Driverless Trucks
VI.Collapsible Containers

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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

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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

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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%

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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

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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

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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

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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%

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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

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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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Opportunities to Expand Visibility

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Recommendation: More Visibility and Freemium Pricing Model

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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
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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

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Driverless Truck timeline is closer than expected

http://www.huffingtonpost.com/scott-santens/self-driving-trucks-are-going-to-hit-us_b_7308874.html

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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

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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

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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

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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

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Collapsible Containers Improve Efficiency

Warehouse Fees
Shorter Length
Loading Speed
Fuel Efficiency
Smaller Footprint

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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

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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

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Conclusion
Watch
3D Printing
3rd Party Logistics Providers

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Do

Visibility

Autonomous Vehicles

Collapsible Containers