EXHIBIT 10.20
AMENDED AND RESTATED
INTERMODAL
TRANSPORTATION AGREEMENT NO. 11111
DATED MAY 15, 2002
BETWEEN
CSX INTERMODAL, INC.,
PACER INTERNATIONAL, INC.,
d/b/a PACER STACKTRAIN
(f/k/a APL LAND TRANSPORT SERVICES, INC.,)
APL LIMITED
AND
APL CO. PTE LTD.
TABLE OF CONTENTS
Page
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1. INTERPRETATION .................................................... 1
2. RECITALS .......................................................... 2
3. TERM .............................................................. 2
4. CSXI'S SERVICES ................................................... 2
5. APL'S/LTS' RESPONSIBILITIES ....................................... 5
6. SOUTH KEARNY TERMINAL ............................................. 7
7. RAIL RATES AND OTHER CHARGES ...................................... 7
8. RATE ADJUSTMENTS .................................................. 9
9. COMPETITIVE PROPOSALS ............................................. 9
10. SERVICE LEVEL COMMITMENT .......................................... 9
11. PAYMENT OF PRICES AND CHARGES ..................................... 9
12. COMMUNICATIONS .................................................... 10
13. USE OF CSXI'S FACILITIES; COMPLIANCE WITH LAWS .................... 11
14. LIABILITY AND CLAIMS PROCEDURES ................................... 12
15. INDEMNIFICATION ................................................... 13
16. FORCE MAJEURE ..................................................... 13
17. CONFIDENTIALITY ................................................... 14
18. FEDERAL CONTRACTOR REQUIREMENTS ................................... 14
19. DEFAULT ........................................................... 15
20. INDEPENDENT CONTRACTOR ............................................ 16
21. ASSIGNMENT ........................................................ 16
22. DISPUTE RESOLUTION ................................................ 17
23. AUDIT ............................................................. 19
24. GENERAL ........................................................... 20
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APPENDIX LIST
Appendix Page
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APPENDIX 1.1 DEFINITIONS ............................................ 1
APPENDIX 4.1 RAIL SERVICES AND LINEHAUL RATES ....................... 8
APPENDIX 4.3 TERMINAL AND CONTAINER YARD SERVICES ................... 9
APPENDIX 4.4 COOPERATIVE EFFORTS TO MINIMIZE COSTS .................. 10
APPENDIX 4.5 NS EXCLUSIVE POINT SERVICE ............................. 11
APPENDIX 4.8 TRAIN SCHEDULES AND ROUTING ............................ 12
APPENDIX 4.9 CSXI'S RIGHT TO MODIFY ................................. 13
APPENDIX 4.11 APPLICABILITY OF DIRECTORY NO. 1 ....................... 14
APPENDIX 4.13 OTHER TYPES OF TRAFFIC ................................. 15
APPENDIX 5.2 VOLUME COMMITMENT ...................................... 16
APPENDIX 5.8 NOTIFICATION TO CUSTOMERS OF DIRECTORY NO. 1 ........... 18
APPENDIX 6 SOUTH KEARNY TERMINAL ..................................
APPENDIX 7.2 NONAPPLICABILITY OF RATES FOR CERTAIN SHIPPERS ......... 19
APPENDIX 7.3 NO CO-LOADING .......................................... 20
APPENDIX 7.5 FAK CARGO ONLY ......................................... 21
APPENDIX 7.6 CONVENTIONAL/STACK CAR RATES ........................... 22
APPENDIX 7.10 EFFECTIVE DATE OF NORTHEAST RATES ...................... 23
APPENDIX 8 RATE ADJUSTMENTS ....................................... 24
APPENDIX 9 COMPETITIVE PROPOSALS .................................. 32
APPENDIX 10 SERVICE LEVEL COMMITMENT ............................... 40
APPENDIX 14.1 CSXI'S LIABILITY FOR CARGO ............................. 44
APPENDIX 14.3 CLAIMS BY SHIPPING CUSTOMERS ........................... 45
APPENDIX 17.4 INTERNAL DISCIPLINE .................................... 46
APPENDIX 21.1.3 TRANSFERS OR ASSIGNMENTS TO RAILROAD ................... 47
APPENDIX 23.1.2 MATTERS SUBJECT TO CSXI'S AUDIT ........................ 48
APPENDIX 23.2.2 MATTERS SUBJECT TO APL/LTS AUDIT ....................... 49
APPENDIX 23.3 AUDITS UNDER APPENDIX 9 ................................ 50
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EXHIBIT LIST
EXHIBIT 1.1.30 EASTERN STATES
EXHIBIT 1.1.31 EASTERN ZONES AND WESTERN ZONES
EXHIBIT 1.1.37 EXISTING LESS-THAN-TRUCKLOAD SHIPPERS
EXHIBIT 1.1.38 EXISTING TPI CUSTOMERS
EXHIBIT 1.1.62 PREMIUM O/D PAIRS
EXHIBIT 4.1.1 LINEHAUL RATES FOR APL'S MOVEMENTS IN TRANSCONTINENTAL
INTERNATIONAL SERVICE
EXHIBIT 4.1.2 LINEHAUL RATES FOR LTS' MOVEMENTS OF APL OR LTS CONTAINERS IN
TRANSCONTINENTAL DOMESTIC SERVICE
EXHIBIT 4.1.3 LINEHAUL RATES FOR EXISTING TPI CUSTOMERS
EXHIBIT 4.1.4 LINEHAUL RATES FOR TEMPERATURE CONTROLLED CONTAINERS
EXHIBIT 4.1.5 LINEHAUL RATES FOR EMPTY CONTAINERS MOVING WITHIN THE EASTERN
STATES THAT HAVE A PRIOR AND SUBSEQUENT TRANSCONTINENTAL
MOVEMENT
EXHIBIT 4.3 TERMINAL SERVICES AND RATES
EXHIBIT 4.4 DEDICATED TRAINS
EXHIBIT 4.11 EXCEPTIONS TO DIRECTORY NO. 1
EXHIBIT 6.1 KEARNY TERMINAL
EXHIBIT 6.9 INVENTORY OF LIFT AND YARD EQUIPMENT
EXHIBIT 9.2 METHODOLOGY DESCRIPTION
EXHIBIT 9.3 EXAMPLE OF COMPETITIVE PROPOSAL CALCULATION FOR
TRANSCONTINENTAL DOMESTIC CONTAINERS
EXHIBIT 9.3.2 COST FACTORS
EXHIBIT 14.2.1 DEPRECIATION FORMULA
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AMENDED AND RESTATED
INTERMODAL TRANSPORTATION AGREEMENT NO. 11111
THIS AMENDED AND RESTATED INTERMODAL TRANSPORTATION AGREEMENT NO.
11111 ("Agreement"), dated as of May 15, 2002, and effective as of the Effective
Date (as defined in Section 3.4 of this Agreement), is between CSX INTERMODAL,
INC. ("CSXI"), a Delaware corporation, whose address is 000 Xxxx Xxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000, PACER INTERNATIONAL, INC., d/b/a PACER STACKTRAIN
(f/k/a APL LAND TRANSPORT SERVICES, INC.), a Tennessee corporation, whose
address is 0000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx 00000 ("LTS"), and APL
LIMITED, a Delaware corporation, whose address is 0000 Xxxxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000, and APL CO. PTE LTD., a Singapore corporation, whose address
is 000 Xxxxxxxxx Xxxx, 00-00, XXX Xxxxxxxx, Xxxxxxxxx 0000 (collectively,
"APL").
R E C I T A L S:
APL and LTS wish to purchase and CSXI wishes to arrange for or provide
certain transportation and related services. CSXI, APL and LTS wish to enter
into this Agreement to amend and restate the existing agreement between them
(the "Original Agreement") in order to give effect to the agreement and
understanding among the parties with respect to the provision of terminal
services and rates, to make certain technical changes and corrections, and to
set forth the terms and conditions pursuant to which APL and LTS agree to
purchase and CSXI agrees to arrange for or provide such services.
A G R E E M E N T:
For and in consideration of the mutual covenants herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby mutually acknowledged, the parties agree as follows:
1. INTERPRETATION
1.1 Definitions. Defined terms are set forth in Appendix 1.1.
1.2 Other Terms. Other capitalized terms shall have the meaning given them
in the text of this Agreement.
1.3 Headings. The section headings contained in this Agreement are for
reference and convenience only and shall not enter into the interpretation of
this Agreement. References to Articles shall mean articles of this Agreement
unless otherwise stated. References to Sections shall mean sections of this
Agreement, including sections in an Appendix, unless otherwise stated.
References to Sections in an Appendix shall mean sections of that Appendix
unless otherwise stated. References to Paragraphs in an Exhibit shall mean
paragraphs in that Exhibit unless otherwise stated.
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1.4 Plural; Singular Usage. All terms used in the plural shall include the
singular; and all terms used in the singular shall include the plural.
2. RECITALS
The above recitals are true and correct and are incorporated herein by this
reference.
3. TERM
3.1 Commencement. This Agreement shall become effective on and as of the
date first written in the first paragraph of this Agreement. The Original
Agreement became effective as follows:
3.1.1 Southeastern Traffic. As to the southeast traffic, January 1,
2000.
3.1.2 Northeastern Traffic. As to the Conrail northeast traffic, the
date one hundred eighty one (181) days after the Closing Date.
3.1.3 Kearny Terminal. As to the obligations with respect to
integration of the Terminal in South Kearny, New Jersey set forth in
Article 6, upon the signing of the Original Agreement.
3.2 Termination. This Agreement will terminate at 11:59 p.m. on December
31, 2014, subject to Section 3.5 of this Agreement.
3.3 Early Commencement. APL/LTS may jointly commence the Agreement as to
their southeast traffic prior to January 1, 2000 by providing CSXI with no less
than sixty (60) days prior notice of such election.
3.4 Effective Date. The date that the Original Agreement became effective
with respect to each area of traffic or responsibility shall be the "Effective
Date" with respect to that area.
3.5 Renewal. This Agreement will automatically renew for two successive
five (5) year periods, unless terminated by CSXI, APL or LTS upon no less than
one hundred eighty (180) days notice prior to the expiration of the original or
first renewal term.
4. CSXI'S SERVICES
4.1 Rail Services and Linehaul Rates. Upon the Effective Date and during
the term of this Agreement, CSXI will arrange for rail transportation linehaul
services for the movements described in Appendix 4.1 and at the rates set forth
in the Rate Exhibits, in each case as the same shall have been and shall be
adjusted in accordance with the terms and provisions of this Agreement.
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4.2 Services Included in Linehaul Charges. CSXI shall provide the
following services as part of the linehaul movement between CSXI origin or
destination and CSXI interchange, and such services are included in the linehaul
charges provided in the Rate Exhibits:
4.2.1 Lifts. CSXI will perform, when necessary, one lift of Equipment
onto an Intermodal Car and secure Equipment thereto and unsecure Equipment
and perform one lift of Equipment from an Intermodal Car.
4.2.2 Placement on Chassis. CSXI will place Containers on APL or LTS
Chassis when timely supplied by APL or LTS. If there are sufficient Chassis
in a Chassis pool at the Terminal to which APL and LTS have access, such
Chassis shall be considered to be timely supplied.
4.2.3 EIRs and Interchange Inspections. CSXI will prepare Equipment
receipt and interchange inspection reports evidencing the apparent
condition of the Equipment at times of interchange to motor carriers.
4.2.4 Notifications. CSXI will provide notification of arrival and
availability of shipments to APL/LTS in accordance with Section 4.6 of this
Agreement.
4.2.5 CY Inventories. Upon request of APL/LTS, CSXI will provide
daily CY inventory reports verifying the number of APL or LTS Containers
and Chassis at each CSXI-served rail CY. In addition, CSXI shall perform a
physical yard check once a week and shall provide a report to APL/LTS by
yard and equipment number. This report will be given to appropriate offices
of APL/LTS as specified in writing from time to time.
4.2.6 Physical Possession. CSXI will exercise reasonable efforts to
give physical possession of Chassis and Containers only to authorized
individuals. APL/LTS will provide CSXI's Director of Intermodal Operations
with a complete list of all authorized entities prior to the Effective
Date. Thereafter APL/LTS shall give CSXI at least five (5) days notice of
any change in the identity of authorized entities.
4.2.7 Outgate and Ingate Notification. CSXI will provide notification
of ingate and outgate times for each Container and Chassis by EDI or other
mutually agreeable means.
4.2.8 Storage Charges. CSXI will assess and collect any Equipment
storage charges due at any Terminal beyond the applicable free time. CSXI
will directly assess storage charges for loaded shipments in Domestic
Service or for TPI Customers against the customer or its agent, including
but not limited to LTS if LTS is the notify party or is providing or
arranging for destination motor carrier service. Other provisions regarding
storage charges are set forth in Exhibits 4.3 and 6.1. CSXI may elect to
xxxx the responsible party or collect such charges at the time of outgate.
CSXI will calculate free time and assess storage charges against parties
other than APL or LTS in accordance with Directory No. 1. Any storage
charges so collected will be for CSXI's account.
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4.3 Terminal and Container Yard Services. Terminal and CY services shall
be provided on the terms and conditions set forth in Appendix 4.3.
4.4 Dedicated Trains.
4.4.1 Request and Scheduling of Dedicated Trains. Upon no less than
twenty-four (24) hours verbal notice by APL/LTS to CSXI's Operations
Center, CSXI will arrange for locomotives and a crew to operate a Dedicated
Train for APL/LTS between the points and at the charges set forth in
Exhibit 4.4. If APL/LTS requests that a Dedicated Train be operated under a
mutually agreed upon pre-arranged and ongoing schedule, then CSXI will
operate the Dedicated Train under that schedule. If APL/LTS requests
movement of a non-scheduled Dedicated Train, such train will depart the
origin terminal at the time agreed upon between APL/LTS and CSXI. Such
agreement will be made at the time the non-scheduled Dedicated Train is
requested by APL/LTS. Further, such train will be operated from origin to
destination under a transit schedule no greater than the maximum number of
hours shown in Exhibit 4.4.
4.4.2 Dedicated Train Pricing. Pricing for Dedicated Trains is set
forth in Exhibit 4.4.
4.4.3 Cancellation of a Dedicated Train. APL will have the option to
cancel a Dedicated Train on no less than seven (7) hours' notice to CSXI
before the scheduled departure.
4.4.4 Cooperative Efforts to Minimize Costs. Provisions regarding the
parties' efforts to minimize costs are set forth in Appendix 4.4.
4.5 NS Exclusive Point Service. Terms and conditions regarding CSXI's
service for rail points exclusively served by NS are set forth in Appendix 4.5.
4.6 Notification and Reporting. CSXI will notify the notify party
specified in the shipping documents of the arrival of a Container and its
availability for pickup. If no notify party is specified on the shipping
documents, CSXI will notify the appropriate offices of APL/LTS as specified in
writing from time to time. CSXI will supply to APL/LTS via direct computer
access (or until such access is available, via electronic mail or facsimile
transmission) a network status report or an update on changes thereto containing
the following items: (a) train symbol and date, (b) number of APL/LTS Equipment
on each train, (c) billed destination of Equipment on each train, (d) current
location, on-time vs. schedule and delay amount and explanation and ETA train
destination and (e) bad-ordered cars and a recovery plan (by telephone) and new
ETA for the car at destination (by telephone). CSXI will supply to APL/LTS
weekly service bulletins and proactive maintenance of way advisories and current
organization charts and contact lists periodically when changed. To the extent
that it is not presently available, CSXI will work with APL/LTS to develop
efficient and effective computer systems to provide APL/LTS with direct
electronic access to this operational data.
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4.7 Loading Containers. CSXI shall use commercially reasonable efforts to
load the Containers tendered under this Agreement onto Intermodal Cars in a
timely fashion and to load Intermodal Cars properly in accordance with any safe
operating procedures given by connecting rail carriers to CSXI or established by
CSXI or any regulatory agency. At Terminals where stack Intermodal Car
capability exists, CSXI will give preference to loading APL/LTS Containers on
stack Intermodal Cars in lieu of standard flat Intermodal Cars.
4.8 Train Schedules and Routing. Provisions for train schedules and
routing are set forth in Appendix 4.8.
4.9 CSXI's Right to Modify. CSXI may modify, add or delete Terminal
services, hours of operation, Terminals or other facilities and change the
services it offers to customers from time to time. CSXI will notify APL/LTS of
any such modifications, additions or deletions at least sixty (60) days in
advance (unless law, regulation or overriding commercial circumstances require a
shorter notice period) and on a continuing basis through communications between
the CSXI Customer Service Center and appropriate offices of APL/LTS, semi-annual
service improvement meetings and APL/LTS and CSXI service design group
discussions. The consequences of a failure to agree on subsequent changes to
CSXI's services related to Terminals are set forth in Appendix 4.9.
4.10 No Obligation To Provide Temperature Protection Services. CSXI does
not provide protective services for refrigerated Containers, and the rates set
forth in the Rate Exhibits do not include such protective services.
4.11 Applicability of Directory No. 1. The provisions relating to the
applicability of Directory No. 1 to APL/LTS are set forth in Appendix 4.11.
4.12 Applicability of Standard Practice and Industry Rules. All services
provided by CSXI to APL and LTS will also be subject to CSXI's standard hours of
operation and AAR rules, unless modified in this Agreement.
4.13 Other Types of Traffic. Movements not covered in the Rate Exhibits
will be handled as set forth in Appendix 4.13.
5. APL'S/LTS' RESPONSIBILITIES
5.1 Payments. APL and LTS shall pay all sums owed to CSXI pursuant to
this Agreement in a timely manner and as set forth in Article 11.
5.2 Volume Commitment. Appendix 5.2 sets forth APL's/LTS' volume
commitments to CSXI and the remedies if APL or LTS fails to meet those
commitments.
5.3 Condition of Equipment. All Equipment tendered by APL or LTS to CSXI
or its underlying carriers for movement hereunder will be in good working order
without defects and shall comply with all applicable AAR and governmental
standards. All Containers tendered by APL or LTS to CSXI or its underlying
carriers for movement hereunder will be suitable to be stacked (on top and
bottom) for transportation on stack Intermodal Cars.
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5.4 Draymen. APL and LTS will, with respect to trucking activities
involving a Terminal, engage or cause to be engaged only draymen with which both
APL/LTS and CSXI have a motor carrier interchange agreement or a Uniform
Intermodal Interchange Agreement.
5.5 Tendering of Chassis. APL and LTS will provide a sufficient number
of APL or LTS Chassis of the proper dimensions to accommodate the volumes of APL
or LTS Containers at each Terminal. CSXI will store up to the number of APL and
LTS Chassis set forth in the applicable Terminal exhibits at no charge to APL or
LTS. To the extent that APL and LTS provide Slider Chassis, CSXI will make or
arrange for adjustment of the size of Slider Chassis as required to accommodate
APL/LTS daily Container volumes. If sufficient numbers of APL and LTS Chassis of
the proper dimensions are not available upon train arrival, CSXI may, in order
to expedite the unloading of trains, use other available Chassis and provide
secondary lifts as necessary at the rates set forth in Directory No. 1;
provided, however, an APL or LTS Container will not be allowed to exit the
Terminal when loaded on other than an APL/LTS Chassis. To the extent that CSXI
must transfer an APL or LTS Container from a non-APL/LTS Chassis, CSXI will
assess and APL/LTS will pay an extra lift fee as set forth in Exhibit 4.3 or
6.1, whichever is applicable to that Terminal. CSXI may use APL or LTS Chassis
to handle the Containers of other CSXI customers or for CSXI Containers;
provided, however, that if in APL's/LTS' opinion CSXI abuses this right, APL/LTS
may revoke this right. CSXI will not allow bare APL or LTS Chassis or APL or LTS
Chassis with a non-APL/LTS Container to leave a Terminal without the specific
authorization of APL or LTS. If CSXI should allow bare APL or LTS Chassis or an
APL or LTS Chassis with a non-APL/LTS Container to leave a Terminal without
authorization, CSXI will use commercially reasonable efforts to return the
Chassis to APL's or LTS' possession, will pay reasonable Chassis rental charges
therefor and will be responsible for any loss or damage to that Chassis in
accordance with Section 14.2 of this Agreement. If APL or LTS receives any
Chassis rental charges, reimbursement of loss or damage to Chassis or other
amounts from the party to whom the Chassis was interchanged and CSXI has also
been required to pay these amounts to APL or LTS under the foregoing sentence,
APL or LTS will pay the amounts remitted by the other party to CSXI.
5.6 Customs Services.
5.6.1 Movement under APL's, LTS' or TPI Customer's Bond. All
in-bond shipments under this Agreement shall move under APL's, LTS' or
the Existing TPI Customer's U.S. Customs custodial bond, unless otherwise
mutually agreed in writing.
5.6.2 Allocation of Responsibility. The following sets forth the
respective responsibilities and liabilities of APL/LTS and CSXI with
respect to in-bond shipments.
(a) APL and LTS' Responsibility. APL and LTS shall be
liable for, and shall defend and indemnify CSXI, its Affiliates and
their respective officers, directors, employees, and agents
against, any Losses imposed by the U.S. Customs Service or the
Internal Revenue Service related to their Containers moving in-bond
unless otherwise provided in Section 5.6.2(b) of this Agreement.
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(b) CSXI's Responsibility. CSXI will, upon confirmation of
Customs clearance, interchange a Container to APL's/LTS' motor
carrier or its agents or employees in accordance with the relevant
interchange agreement during the Terminal's normal business hours.
CSXI shall be responsible for any duties or fines arising from
Customs violations actually and directly caused by CSXI during the
period in-bond Containers are in its or its agent's possession and
control. CSXI agrees not to open any APL or LTS in-bond Containers
without U.S. Customs Service supervision and approval, except in a
force majeure condition or other emergency, such as a leaking
Container, or with APL or LTS' permission.
5.7 Compliance with Directory No. 1. APL and LTS will comply with all
requirements of Directory No. 1 with respect to shipments under this Agreement,
unless those requirements conflict with or are excluded or modified by the terms
of this Agreement.
5.8 Notification to Customers of Directory No. 1. APL and LTS shall
inform its customers that the provisions of Directory No. 1 apply to their
shipments using CSXI's transportation services and they must comply with
provisions of Directory No. 1 as more specifically set forth in Appendix 5.8.
5.9 Prior Notice. To facilitate loading of trains at each Terminal, APL
and LTS will make a good faith effort to provide CSXI's Terminal Manager with
twenty-four (24) hours advance notice of the expected number of pieces of
Equipment to be received by CSXI at each Terminal.
5.10 Point of Contact. CSXI shall not be required to provide notices to,
interact with or obtain the agreement of APL and LTS acting as separate entities
under this Agreement with respect to any daily operational matters. CSXI shall
be required to provide notices to, interact with or obtain the agreement of APL
and LTS acting as separate entities under this Agreement with respect to any
changes in this Agreement, including but not limited to the Rate Exhibits,
Exhibit 4.3 and Directory No. 1 and if APL pays CSXI directly, with respect to
charges billed under Article 11. Accordingly, APL and LTS shall appoint a single
joint point of contact for each functional area to represent both APL and LTS in
working on a daily basis with CSXI and CSXT under this Agreement.
5.11 Routing. With respect to Container movements subject to the volume
commitments under Section 5.2 of this Agreement, APL and LTS shall route their
Containers in Transcontinental International or Domestic Service through
Gateways served by CSXI.
6. SOUTH KEARNY TERMINAL
Appendix 6 sets forth the parties' mutual obligations and
responsibilities regarding rail terminal operations at south Kearny, N.J.
7. RAIL RATES AND OTHER CHARGES
7.1 Linehaul Rates. Linehaul rates made available under this Agreement
are set forth in the Rate Exhibits, Directories Nos. 3 and 8 and by SPQ. To the
extent that the rates in
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Directories Nos. 3 or 8 applicable to a type and size of Container between any
O/D Pair are lower than the applicable rate in the Rate Exhibits, then the lower
Directory rate shall apply.
7.2 Nonapplicability of Rates. Provisions regarding the inapplicability
of APL's/LTS' linehaul rates are set forth in Appendix 7.2.
7.3 No Co-Loading. APL/LTS shall not use the linehaul rates provided
under this Agreement for movements of empty or loaded Containers owned or leased
by certain other parties as set forth in Appendix 7.3.
7.4 Combination of Prices. The rates set forth in Rate Exhibits may not
be combined to construct a lower price where a through price for an O/D Pair is
set forth in a Rate Exhibit.
7.5 FAK Cargo Only. The rates set forth in the Rate Exhibits apply only
to cargo which is accepted under freight, all kinds ("FAK") pricing as defined
in Directory No. 1; provided, however, that the rates in the Rate Exhibits shall
apply to certain other freight as specified in Appendix 7.5. If APL or LTS wish
to transport non-FAK cargo (other than that cargo specified in Appendix 7.5) in
movements otherwise covered under a Rate Exhibit, APL or LTS may request an SPQ.
7.6 Conventional/Stack Car Rates. Separate rates are set forth in the
Rate Exhibits for Containers moving in stack Intermodal Car service and
Containers moving TOFC in conventional service and shall apply depending on
whether the shipments are moved in stack or conventional service. CSXI
acknowledges that prior to the Effective Date, APL and LTS moved a certain
percentage of its Containers in the Southeast in stack service and the remaining
percentage in conventional service. The future application of rates as between
stack service and conventional service is set forth in Appendix 7.6.
7.7 Changes in Container Sizes. If ISO standard dimensions for
Containers or the sizes and types of other Containers are otherwise changed,
CSXI will propose linehaul rates for Containers with such new dimensions. Such
rates will take effect upon the mutual agreement of the parties.
7.8 Addition of New O/D Pairs. If from time to time CSXI adds O/D Pairs
to the Core Network as a result of corporate transactions or otherwise, CSXI
will propose linehaul charges for these new O/D Pairs. Such rates will take
effect upon the mutual agreement of the parties. CSXI and APL/LTS shall also
agree as to which Eastern Zone the new origin or destination shall be allocated.
7.9 Rates for Moves Not Covered by Rate Exhibit. Movement of Containers
covered by this Agreement for which no rate is provided under a Rate Exhibit may
be moved at the rates set forth in Directory Nos. 3 or 8 or pursuant to an SPQ.
7.10 Northeast Rates. Provisions regarding the effective date of
linehaul rates for Northeastern traffic are set forth in Appendix 7.10.
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8. RATE ADJUSTMENTS
Appendix 8 sets forth the adjustment mechanisms applicable to CSXI's
linehaul rates and charges.
9. COMPETITIVE PROPOSALS
Appendix 9 sets forth provisions for the adjustment of CSXI's rates and
charges to APL as a result of specified market conditions and competitive
circumstances.
10. SERVICE LEVEL COMMITMENT
Appendix 10 sets forth the standards for CSXI's service performance and
the remedies if CSXI fails to meet those standards.
11. PAYMENT OF PRICES AND CHARGES
11.1 Payment of Charges Owed to CSXI. CSXI will provide APL/LTS with a
detailed statement of linehaul and other charges for transportation, terminal
and other services rendered by CSXI and any other sums owed CSXI pursuant to
this Agreement, via EDI transmission or, if EDI transmission is not available,
by facsimile transmission or overnight courier. Each statement will bear a
unique number. APL/LTS must notify CSXI of any disputed charges listed on the
statement and provide documentary evidence to support its dispute of any charges
by 12:00 noon (EST) no later than twenty five (25) calendar days from the date
the statement is received. No response within this period will constitute
APL's/LTS' acknowledgment that the statement is accurate. The parties will work
together to resolve any disputed charges. If the parties are unable to resolve
disputed charges, either party may invoke the dispute resolution procedures in
Article 22. APL and LTS will pay amounts owed for undisputed charges (including
the undisputed portion of disputed charges) by electronic funds transfer within
twenty-five (25) days from the date the statement is received. APL and LTS will
pay disputed charges that have been resolved within fifteen (15) days of the
date of resolution. APL, LTS and CSXI will develop procedures for promptly
acknowledging receipt of CSXI's statement xxxx.
11.2 Payment of Charges Assessed by APL/LTS. APL/LTS will provide CSXI
with a statement for any charges properly assessed against CSXI. The statement
will be delivered via EDI transmission or, if EDI transmission is not available,
by facsimile transmission or overnight courier to the address set forth in
Section 24.3 of this Agreement. The parties will work together to resolve any
disputed charges. If the parties are unable to resolve the disputed charges,
either party may invoke the dispute resolution procedures in Article 22. CSXI
will pay undisputed charges (including the undisputed portion of disputed
charges) by electronic funds transfer within twenty-five (25) days from the date
of the statement is received. CSXI will pay disputed charges that have been
resolved within fifteen (15) days of the date of resolution. CSXI, APL and LTS
will develop procedures for promptly acknowledging receipt of APL's or LTS'
statement.
11.3 No Offset. Each party shall pay all transportation and other
charges due under this Agreement and shall not offset such charges in any
circumstances against amounts alleged to
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be due as a result of prior billing error, unsettled loss or damage claims,
unpaid items, or other dispute with the other party.
11.4 Late Fee. Any payment that is not received when due will be subject
to a late payment charge equal to a rate of one and one-half percent (1 1/2%)
per month (or the maximum rate permitted by law if less than 1 1/2% per month).
No late fee will accrue on disputed charges unless it is determined under the
dispute resolution procedures that the disputing party had no reasonable basis
for the dispute or was not acting in good faith in connection with the dispute.
12. COMMUNICATIONS
12.1 Shipping Order. Prior to gate arrival of APL and LTS Containers for
gate interchange to CSXI, APL/LTS shall provide CSXI with a single final
shipping order by EDI in the format specified by CSXI and including the data
required under Directory No. 1 except as such data requirements are modified in
Exhibit 4.11. APL and LTS acknowledges that it is CSXI's policy that no APL or
LTS Containers will be accepted for gate interchange onto a Terminal unless a
shipping order in accordance with Directory No. 1, as modified in Exhibit 4.11,
has been provided for the Container prior to ingate or appropriate documentation
physically accompanies the Container. For a reasonable transition period, CSXI
will work with APL/LTS to facilitate APL's/LTS' compliance with this policy.
Thereafter, APL and LTS shall comply and cause its draymen to comply with this
policy. CSXI will handle exceptions to the policy requested by APL/LTS on a
case-by-case basis. The format specified by CSXI for shipping or destination
transmission may be changed from time to time to conform to then current ANSI or
other standards for electronic information exchange. CSXI will provide APL/LTS
with six (6) months prior notice of any change in its EDI format, and APL/LTS
will transmit data in such revised format no later than six (6) months after
such notice.
12.2 APL'S/LTS' Responsibility for Data. APL and LTS will be responsible
for correctly transmitting shipping order and other electronic data to CSXI.
12.3 Information on Cargo Not Eligible for FAK pricing. If the subject
cargo cannot be shipped under FAK pricing, the transmission (or any written
documentation provided at the Terminal gate if permitted by CSXI) must include
all relevant information regarding such shipment, including, but not limited to,
in the case of hazardous material as defined by the Hazardous Material
Regulations of the Department of Transportation, all descriptive elements
required by 49 Code of Federal Regulations, part 172, Subpart C, and in the case
of cargo requiring refrigeration services a description of the specific
commodity (i.e., frozen fish, tomatoes) being transported.
12.4 Shipping Order Changes. Diversion or re-consignment of a shipment
will only be permitted prior to loading of the Container onto the train at the
origin Terminal. Diversion or re-consignment must be arranged and have been
approved by CSXI in advance. If the number of diversion and re-consignments
requested by APL or LTS become burdensome to CSXI, CSXI reserves the right to
charge a processing fee of $10.00 per diversion or re-consignment. This fee will
be in addition to any diversion or re-consignment charges assessed by a rail
carrier, charges for the shipment as originally tendered and any charges quoted
at the time of request. Diversion
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or re-consignment requests must be confirmed by APL/ LTS via EDI transmission or
in writing. CSXI agrees to attempt to make the diversion requested in those
situations where the request is timely received and a confirmed agreement of
diversion is entered into in time for shipping orders to be issued to the proper
party for the diversion, but CSXI will not guarantee nor be responsible if the
relevant carrier cannot or does not effectuate or complete the diversion.
12.5 Voids of Shipping Order. Requests to void a shipping order will not
be accepted after the loading of the Container onto the train at the origin
Terminal.
12.6 Transportation Incidents and Exceptions. CSXI shall use reasonable
efforts to notify APL/LTS as soon as reasonably possible of all major incidents
affecting the movement of APL's/LTS' shipments. Incidents shall include, but are
not limited to, set-outs, bad-order cars, derailments and reroutes and any
matter considered by CSXI to constitute a force majeure condition as described
in Article 16.
12.7 Day-to-Day Management. CSXI will arrange for APL/LTS to have
suitable and direct lines of communications with both CSXI's Director of
Intermodal Train Operations and appropriate CSXT operational personnel.
13. USE OF CSXI'S FACILITIES; COMPLIANCE WITH LAWS
13.1 Subcontractor's Access to CSXI Facilities. In order to efficiently
and safely operate the Terminals and its other facilities, CSXI must, among
other precautions, limit access by APL and LTS and other parties to its
facilities. Accordingly, neither officers, employees or agents of APL or LTS nor
any APL or LTS Subcontractor shall have access to the Terminals or other
facilities of CSXI or CSXT without the prior written consent of the relevant
CSXI Terminal General Manager or the supervisors of the Terminal General
Managers, which consent shall not be unreasonably withheld. CSXI will inform
APL/LTS from time to time of those officers authorized to grant such access to
Terminals. If CSXI does permit an APL or LTS officer, employee or agent or a
Subcontractor to have access to a Terminal or other premises, CSXI reserves the
right thereafter to exclude such persons from the Terminals and other facilities
and to require APL and LTS officers, employees and agents and each Subcontractor
to execute a separate access agreement with CSXI as a condition to their access.
13.2 Compliance with Laws and Rules. APL, LTS and CSXI shall comply, and
APL and LTS shall cause Subcontractors to comply, at all times, with (a) all
applicable laws, rules, regulations, policies, procedures, and ordinances,
whether state, federal, municipal or other, (b) all of CSXI's operating rules,
policies and procedures, including without limitation safety inspection,
training and operations guidelines, accident reporting rules, and Terminal and
yard guidelines and requests; (c) applicable AAR rules and procedures; and (d)
any other laws, regulations, ordinances or standards relating to railroad, safe
container, trucking or other transportation operations, environmental
protection, clean air and water, workers' compensation, industrial accidents,
employer liability, safety and health.
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14. LIABILITY AND CLAIMS PROCEDURES
14.1 CSXI's Liability for Cargo. CSXI's liability for loss, damage,
destruction or delay to cargo shall be governed by the terms of Directory No. 1
and Appendix 14.1.
14.2 CSXI's Liability for Equipment.
14.2.1 Determination of CSXI's Equipment Liability. Responsibility
for loss, damage, maintenance and repair of Equipment shall be governed
by the Container Rules. The cost of repairs to Equipment will be
allocated as set forth in this Section. APL will pay for or perform the
owner's responsibility repairs under the Container Rules. CSXI will pay
for or perform those handling carrier responsibility repairs under the
Container Rules that become necessary while Equipment is in the
possession of CSXI. If after joint investigations by APL/LTS and CSXI,
the responsible party cannot be determined, APL/LTS and CSXI shall share
the cost of handling carrier responsibility repairs equally. As between
APL/LTS and CSXI and except as provided in Section 5.5 of this Agreement,
APL and LTS shall be responsible for all repairs while Equipment is in
the possession of a third party, including but not limited to a motor
carrier and other rail carriers. If either party performs repairs to
Equipment for which the other party is responsible under this Section,
the responsible party shall pay the performing party as set forth in the
Container Rules. If APL or LTS Equipment in CSXI's possession is lost,
stolen, destroyed or becomes a constructive total loss, CSXI will
promptly notify APL or LTS. Within thirty (30) days after the Equipment's
depreciated value is calculated, CSXI will promptly pay APL or LTS the
depreciated value of the Equipment, less salvage value if the Equipment
is returned to APL of LTS. For purposes of this Section, depreciation
will be calculated according to the formula in Exhibit 14.2.1. Equipment
will be considered a constructive total loss if the estimated repair cost
of the Equipment exceeds its depreciated value, less salvage. If
Equipment in CSXI's possession becomes a constructive total loss, CSXI
will provide APL or LTS with a list of major items of damage to the
Equipment within fifteen (15) days after the Equipment's depreciated
value is calculated. APL or LTS will advise CSXI of its desired
disposition of the Equipment within ten (10) days after receipt of the
list. If APL or LTS requests return of its Equipment and if in the sole
judgment of CSXI return of the Equipment is practicable, APL or LTS will
pay CSXI transportation and other charges (including conditioning and
loading) applicable to the return. If APL or LTS does not desire the
return of the Equipment or if CSXI determines that return is not
practicable, APL or LTS will provide CSXI with title to the Equipment
prior to CSXI's payment to APL of the depreciated value of the Equipment.
14.2.2 CSXI's Payment of Repairs. If CSXI is responsible for
repairs to a Container under Section 14.2.1 of this Agreement, it will
pay the vendor providing the repairs directly. If CSXI does not have a
direct billing relationship with the repair vendor and APL/LTS arranges
the repairs, CSXI will pay APL/LTS, as applicable, the amount billed to
it by its repair vendor for such repairs as evidenced by the vendor's
invoice. Payments by CSXI to APL/LTS will be subject to the procedures
set forth in Section 11.2 of this Agreement.
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14.3 Submission of Claims. The procedures for submitting claims to CSXI
are set forth in Appendix 14.3.
14.4 Xxxxxxx Liability. CSXI has declined to purchase Xxxxxxx Amendment
liability coverage from its rail carriers. If APL, LTS or its shipping customers
wish to purchase Xxxxxxx Amendment liability coverage, APL, LTS and its shipping
customers must obtain such coverage through an SPQ.
14.5 General Disclaimer of Certain Damages. NO PARTY SHALL BE LIABLE
TO ANY OTHER PARTY TO THIS AGREEMENT FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL
OR PUNITIVE DAMAGES EXCEPT AS EXPRESSLY PROVIDED FOR HEREIN OR EXCEPT WHERE A
PARTY TO THIS AGREEMENT IS REQUIRED TO PAY SUCH DAMAGES TO A THIRD PARTY AND TO
THE EXTENT THAT PARTY IS ENTITLED TO FULL OR PARTIAL INDEMNITY FROM ANOTHER
PARTY UNDER THIS AGREEMENT.
15. INDEMNIFICATION
15.1 Indemnification by APL and LTS. Subject to the terms, conditions
and limitations of liability set forth in this Agreement, APL and LTS shall
defend, indemnify and hold harmless CSXI, its Affiliates and the respective
officers, directors, employees, and agents of each from and against Losses
associated with (a) damage to property or injury or death of any persons to the
extent resulting from or arising out of APL's or LTS' or their Subcontractors'
or their officers', directors', employees', or agents' negligence or willful
misconduct, (b) damage to property and injury or death to persons to the extent
resulting from or arising out of APL's or LTS' breach of this Agreement; or (c)
claims by any person or entity other than APL or LTS related to loss, damage,
destruction or delay to cargo or Equipment in excess of the limitations in, or
other than as permitted by Directory No. 1 as it applies to APL/LTS hereunder if
APL or LTS failed to comply with Appendix 5.8. If, however, APL or LTS
demonstrates that it has complied with Appendix 5.8, it shall have no obligation
to indemnify CSXI under Section 15.1(c).
15.2 Indemnification by CSXI. Subject to the terms, conditions and
limitations of liability set forth in this Agreement (including Directory No.
1), CSXI shall defend, indemnify and hold harmless APL and LTS and their
officers, directors, employees, and agents from all Losses associated with (a)
damage to property or injury or death of any persons to the extent resulting
from or arising out of CSXI's or its Subcontractors' or their officers',
directors', employees', or agents' negligence or willful misconduct or (b)
damage to property and injury or death to persons to the extent resulting from
or arising out of its breach of this Agreement.
16. FORCE MAJEURE
A party shall be excused from fulfilling its contractual obligations
hereunder if it is prevented or delayed in such performance by force majeure
conditions beyond such party's reasonable control including, but not limited to,
fire or explosions; lockouts; strikes; labor shortages or disturbances; acts of
God, including, but not limited to, floods, hurricanes, tornadoes, earthquakes,
unusually severe weather, and natural disasters; war; insurrection;
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derailment that causes the normal route of movement to be impassable or other
casualty; acts of the public enemy; acts of governmental authority; embargo;
quarantine; and acts or omissions of third parties. The party claiming force
majeure will, within five (5) business days from the date of disability, notify
the other when it learns of the existence of a force majeure condition and will
similarly notify the other within a period of two (2) business days when the
force majeure condition has ended. The party claiming force majeure shall take
all commercially reasonable efforts to continue to perform its obligations to
the extent practicable and to recommence performing all obligations as soon as
possible after the force majeure condition has ended.
17. CONFIDENTIALITY
17.1 Confidentiality Obligations. Each party agrees to hold in confidence
any Confidential Information of the disclosing party acquired during the term of
this Agreement, not to disclose the Confidential Information to any third
parties, to restrict disclosure to those employees, partners, shareholders or
Subcontractors with a need to know and bind such employees, partners,
shareholders or Subcontractors to these confidentiality restrictions, and not to
use the Confidential Information for any purpose except as contemplated by this
Agreement. Either party may disclose Confidential Information to the extent
required by a governmental agency, under a court order or as otherwise required
by law, provided that the party subject to the legal requirements has notified
the other party of such governmental or court action prior to disclosing the
Confidential Information.
17.2 Exclusion of Certain Information. This Article 17 will not prohibit or
limit a party's use of information (a) previously known to it and not subject to
any confidentiality restrictions, (b) independently developed by it, (c)
acquired by it from a third party which is not, to such party's knowledge, under
an obligation not to disclose such Confidential Information, or (d) which is or
becomes publicly available through no breach by such party of these
confidentiality obligations.
17.3 Right to Equitable Relief. Each party acknowledges the value of the
Confidential Information to the other party and the inadequacy of money or
damages in the event of breach or threatened breach and agrees that the other
shall be entitled to obtain an injunction against a breach of these
confidentiality obligations from any court of competent jurisdiction immediately
upon request, without being required to post a bond or prove that damages are
inadequate.
17.4 Internal Discipline. Appendix 17.4 sets forth internal procedures to
preserve the confidentiality of APL's/LTS' rates.
18. FEDERAL CONTRACTOR REQUIREMENTS
18.1 Compliance with Federal Contractor Requirements. To the extent
applicable, APL/LTS and CSXI will comply with and give all representations and
assurances required by any law or regulation applicable to federal contracts and
subcontracts including but not limited to the following:
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18.1.1 Renegotiation and Contract Work Hours and Safety Standards
Act. To the extent applicable, the Renegotiation Act of 1951, as amended
(50 U.S.C(s)(s)35, 45), and the Contract Work Hours and Safety Standards
Acts, as amended (40 U.S.C(s)(s)327,333).
18.1.2 Certain Executive Orders. To the extent applicable, Executive
Order No. 11246, dated September 14, 1965, as amended, concerning equal
employment opportunity and affirmative action in employment of persons
without regard to race, religion, sex, or national origin; Executive Order
No. 11701, dated January 24, 1973, concerning affirmative action in
employment of certain veterans; Executive Order No. 11758, dated January
15, 1974, concerning affirmative action in employment of handicapped
individuals; Executive Order No. 11625, dated October 13, 1971, concerning
assistance to minority business enterprises; Executive Order No. 12138,
dated May 18, 1979, concerning assistance to women's business enterprises;
the Age Discrimination Act of 1975; all applicable regulations of the
Secretary of Labor, including but not limited to 41 C.F.R(s)60-1.4 et
seq., 41 C.F.R(s) 60-250 et seq., and 41 C.F.R(s)60-741 et seq., and all
applicable Federal Procurement Regulations, including but not limited to 41
C.F.R(s)1-1.13 et seq.; and
18.1.3 Defense Acquisition Regulations. To the extent applicable,
Defense Acquisition Regulations 7-104.14, concerning use of small business
and minority business concerns, and 7.104.20, concerning use of labor
surplus area concerns.
18.2 No Segregated Facilities. To the extent applicable and required, APL,
LTS and CSXI each hereby certify to the other that it does not and will not
maintain any facilities for employees that are unlawfully segregated or permit
employees to perform services at any location under its control or that of its
subcontractors where unlawfully segregated facilities are maintained and that it
will require its nonexempt subcontractors to furnish a similar certification
prior to the award of any nonexempt subcontract.
19. DEFAULT
19.1 Events of Default. The following shall be deemed an Event of Default:
(a) APL's or LTS' failure to make timely payments under this Agreement unless
such failure is cured within five (5) days of the date of CSXI's notice of such
failure or (b) any other material breach of the terms and conditions of this
Agreement which has or is likely to have a material adverse effect on the
nondefaulting part(ies) if such breach is not cured within sixty (60) days of
the date of the non-defaulting party's notice of such breach.
19.2 Remedies Upon an Event of Default. In addition to any other remedies
under this Agreement, at law or in equity, the nondefaulting part(ies) may, upon
any Event of Default by the defaulting party, terminate this Agreement as to the
defaulting party upon written notice of such termination or suspend performance,
in whole or in part, of this Agreement with respect to the defaulting party
until such Event of Default is cured. All rights and remedies which may have
accrued prior to any termination upon an Event of Default shall survive
termination of this Agreement.
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19.3 Obligations During Notice Period. Each party shall continue to
perform its respective responsibilities hereunder through the effective date of
termination.
19.4 Obligations Upon Termination. Upon termination of this Agreement for
any reason, each party shall complete their performance and fulfill all
obligations which accrued prior to the date of termination, including but not
limited to APL's and LTS' obligation to pay all accrued charges and CSXI's
obligation to provide transportation for all Containers previously tendered and
to return to the defaulting party, at an interchange point or other location or
locations mutually agreed upon, all Containers and Chassis owned or provided by
the defaulting party. If solely as a result of a default by one party, a
nondefaulting party terminates this Agreement as to the defaulting party
pursuant to Section 19.2 of this Agreement the transportation of Containers and
Chassis owned or provided by the defaulting party to an interchange point
or other location or locations mutually agreed upon will be at the sole cost
and expense of the defaulting party.
19.5 Transition Cooperation. Upon the failure of the parties to agree upon
renewal of this Agreement or upon giving by a party of notice of intent to
terminate this Agreement, pursuant to Section 19.2 of this Agreement, the
parties will use good faith efforts to establish a reasonable schedule and
reasonable procedures for cessation of transportation and related Terminal and
other activities with respect to the party being terminated that will endeavor
to minimize the disruption to the extent reasonably possible to the parties and
their customers. The terms of this Agreement will govern transportation and
related Terminal services and other activities during this transition.
20. INDEPENDENT CONTRACTOR
APL/LTS agree that CSXI will be an independent contractor and not an agent
of them. This Agreement does not grant APL or LTS authority to enter into any
contracts or obligations on behalf of CSXI or otherwise bind CSXI, and neither
APL nor LTS shall hold itself out as having such authority. This Agreement shall
not be construed to grant CSXI authority to enter into any contracts or
obligations on behalf of APL or LTS or otherwise bind APL or LTS, and CSXI shall
not hold itself out as having such authority.
21. ASSIGNMENT
21.1 Assignment by APL or LTS.
21.1.1 No Assignment without CSXI Approval. Except as provided for
herein, neither APL nor LTS, as the case may be, may assign this Agreement
without the prior written approval of CSXI.
21.1.2 Effect of Certain Transactions. For purposes of this Article
21, a merger, sale of all or substantially all business and assets, a
reorganization, a consolidation or other change in control of a party
hereto shall not constitute an assignment of this Agreement by that party
so long as such successor-in-interest or surviving entity retains or
succeeds to ownership and control of all or substantially all of
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the business and assets of APL or LTS, as applicable, and is and shall be
bound by the terms of, and shall assume all obligations of such party
under, this Agreement.
21.1.3 Transfers or Assignments To Railroad. Section 21.1.2 of this
Agreement notwithstanding, the prior written approval of CSXI shall be
required with respect to a merger, sale of all or substantially all
business and assets, a reorganization, a consolidation or other change in
control of APL or LTS if the successor-in-interest or surviving entity is a
railroad or an Affiliate thereof. If CSXI withholds such approval, APL or
LTS, as applicable, may elect to proceed with such transaction with a
railroad or an Affiliate thereof, and upon consummation of such
transaction, this Agreement shall terminate as to such party. If CSXI
grants its approval in certain circumstances as set forth in Appendix
21.1.3, Section 9.3 of Appendix 9 and Exhibits 9.3 and 9.3.2 shall be void.
21.2 Assignment by CSXI. CSXI may not assign this Agreement without the
prior written approval of each of APL and LTS, except to an Affiliate (other
than Sea-Land Service, Inc. or its successor or any other ocean carrier
Affiliate) of CSXI.
21.3 Binding Effect. To the extent not prohibited hereunder, the
covenants, terms, provisions and conditions of this Agreement shall apply to,
bind and inure to the benefit of the respective permitted successors and assigns
of APL, LTS and CSXI.
22. DISPUTE RESOLUTION
22.1 Disputes Subject To Procedures. All disputes, whether sounding in
contract, tort or otherwise, arising out of or relating to this Agreement,
including but not limited to the arbitrability of a party's claim or dispute or
the breach of this provision, default under or breach of any provision in this
Agreement, termination of this Agreement, all claims for indemnification,
payments for services, liability for cargo loss or damage, and liability for
personal injuries shall be resolved pursuant to the provisions of this Article
22 exclusively.
22.2 Internal Review. The parties intend to expeditiously and amicably
resolve any and all disputes that may arise between them. Within fifteen (15)
days after receipt by either party of written notice from the other party of the
existence of a dispute, the party receiving the notice shall deliver to the
other party a written response. The foregoing notice and response shall describe
the nature and circumstances of the dispute, state the party's position with
respect to the dispute and summarize the evidence and arguments supporting the
position. The managers participating in the dispute shall arrange to meet, in
person or by teleconference, at a mutually agreeable time and location as soon
as practicable and shall diligently attempt to resolve the dispute over the next
fifteen (15) days following receipt of the response. If the parties'
participating managers are not able to resolve the dispute within this fifteen
(15) day period, either party may submit the dispute to CSXI's Executive Vice
President of Marketing and Sales and APL's/LTS' Vice President-Transportation
Purchasing or such other senior executives as may be mutually agreed upon by the
parties from time to time. The submission shall be accompanied by the original
notice of dispute and response thereto and any additional evidence and arguments
that may be relevant. The designated executives shall then arrange to meet, in
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person or by teleconference, at a mutually agreeable time and location as soon
as practicable and shall diligently attempt to resolve the dispute over the next
fifteen (15) days following submission of the dispute to them. If such
executives do not agree upon a decision within fifteen (15) days after
submission of the dispute to them, or such longer time as they may agree upon,
then either party may, by providing a notice of arbitration to the other party,
submit the dispute to arbitration in accordance with the following provisions.
23.3 Arbitration Procedures. All disputes described in Section 22.1 of this
Agreement which are not resolved under Section 22.2 of this Agreement shall be
submitted for final resolution pursuant to the Commercial Arbitration Rules of
the American Arbitration Association then in effect, and the parties hereby
consent to the entry of judgment by any court of competent jurisdiction with
respect to the decision of the arbitrator(s). The provisions of this Agreement
shall control if they conflict with the Commercial Arbitration Rules. The U.S.
Arbitration Act, 9 U.S.C. Sections 1-16, to the exclusion of any provisions of
state law inconsistent therewith or which would produce a different result,
shall govern the arbitrability of all claims. The arbitration shall be before an
arbitrator selected in accordance with the Commercial Arbitration Rules. Any
decision of the arbitrator shall be rendered within thirty (30) days after the
completion of the presentation of evidence and witnesses. The arbitrator shall
have the authority to award costs, such as pre-award interest, post\award
interest, expert fees and attorneys fees as deemed equitable considering the
circumstances, the outcome of the arbitration and the conduct of the parties,
but shall not have the authority to award indirect, special, consequential or
punitive damages or to issue equitable relief.
22.4 Discovery and Rules. The arbitrator shall permit and facilitate such
discovery as he or she shall determine is appropriate under the circumstances
taking into account the needs of the parties, the relevance of the requested
discovery to the matter in controversy, and the desirability of making discovery
expeditious and cost-effective. The rules of arbitration may not deprive a party
of the right to be represented by counsel, to present evidence, or to
cross-examine witnesses presented by another party.
22.5 Allocation of Expenses. Subject to the arbitrator's power to award
costs, each party shall be responsible for the expenses, fees and costs of the
arbitrator.
22.6 Location for Arbitration. Any non-telephonic arbitration shall be
held in Atlanta, Georgia.
22.7 Judicial Proceeding. The parties agree that the only circumstances in
which the parties may initiate judicial proceedings under this Agreement are to
obtain injunctive relief under Section 17.3 of this Agreement or to enforce this
Article 22. In any judicial proceeding to enforce this Article 22, the only
issues to be determined will be the existence of an agreement to arbitrate and
the failure of a party to comply with such agreement, and those issues will be
determined summarily by the court without a jury.
22.8 Conduct of Operations. Pending resolution of any dispute brought in
good faith, each party will continue to perform its obligations under this
Agreement, including, but not
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limited to, the payment of all amounts due to the other party that are not in
dispute, provided that the other party also continues to perform its obligations
under this Agreement.
22.9 Confidentiality of Arbitration. All aspects of the arbitration,
including but not limited to all documents, testimony, information or other
things produced, inspected or otherwise made available in connection with the
arbitration, shall be treated as Confidential Information. Neither the parties
nor the arbitrators may disclose the existence, content or results of the
arbitration, except as necessary to comply with applicable law or regulatory
requirements. Before making any disclosure required by law, a party shall give
written notice to all other parties and shall allow such parties a reasonable
opportunity to protect their interests. In no event shall such disclosure to
comply with legal or regulatory requirements be deemed to waive the confidential
nature of the disclosed information.
23. AUDIT
23.1 CSXI's Right to Audit.
23.1.1 Timing of CSXI's Audit. CSXI shall have the right to audit
APL and LTS as described in this Section from time to time upon thirty (30)
days written notice to the applicable party, but no more frequently than
once per six month period; provided however, that CSXI may conduct a
follow-up audit within three (3) months of completion of any audit that
reveals any material irregularities or noncompliance in the obligations
being audited. CSXI's right to audit will remain in effect for twelve
months after any termination or expiration of this Agreement. APL/LTS shall
have the right to approve the auditor, which approval may not be
unreasonably withheld or delayed.
23.1.2 Matters Subject to CSXI's Audit. CSXI shall have the right,
at its own cost and expense, to cause an independent auditor to audit APL's
and LTS' books and records to confirm compliance with the items set forth
in Appendix 23.1.2.
23.1.3 Conduct of Audit. Any such audit shall be conducted at CSXI's
expense during normal business hours at APL or LTS' offices and at times
which do not unreasonably interfere with their business operations. The
independent auditor shall protect the Confidential Information of APL and
LTS and such auditor will execute confidentiality agreements in forms
reasonably acceptable to CSXI and APL/LTS.
23.1.4 Maintenance of Books and Records. APL and LTS shall maintain
all necessary books and records containing information needed to
effectively perform an audit for a period of three (3) years (or such
longer period as may be required by law) from the date of the event
reflected in such books or records and shall provide the auditor with
reasonable access to such books and records.
23.1.5 Expenses; Subject to Arbitration. If an audit determines
that, as a result of misinformation provided by APL or LTS, or LTS' other
failure to comply with this Agreement, CSXI undercharged APL or LTS by five
percent (5%) or more with respect to any audited matter, APL and LTS will
reimburse CSXI for the reasonable out-of-pocket
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expense of such audit. If APL or LTS disagrees with the report of any
audit, the matter will be submitted to arbitration pursuant to
Article 22.
23.2 APL's/LTS' Right to Audit.
23.2.1 Timing of APL's/LTS' Audit. APL/LTS shall have the right to
audit CSXI as described in this Section from time to time upon thirty (30)
days written notice to CSXI, but no more frequently than once per six month
period; provided however that APL/LTS may conduct a follow-up audit within
three (3) months of completion of any audit that reveals any material
irregularities or noncompliance in the obligations being audited. This
APL/LTS right to audit will remain in effect for twelve months after any
termination of this Agreement. CSXI shall have the right to approve the
auditor, which approval may not be unreasonably withheld or delayed.
23.2.2 Matters Subject to APL and LTS Audit. APL/LTS shall have the
right, at its own cost and expense, to cause an independent auditor to
perform an audit of CSXI's books and records solely for the purposes of
verifying the matters set forth in Appendix 23.2.2.
23.2.3 Conduct of Audit. Any such audit shall be conducted, at
APL's/LTS' expense, during normal business hours at CSXI's offices and at
times which do not unreasonably interfere with its business operations. The
independent auditor shall protect the Confidential Information of CSXI, and
such auditor will execute confidentiality agreements in forms reasonably
acceptable to CSXI and APL/LTS.
23.2.4 Maintenance of Books and Records. CSXI shall maintain all
necessary books and records containing information needed to effectively
perform an audit for a period of three (3) years (or such longer period as
may be required by law) from the date of the event reflected in such books
or records and shall provide the auditor with reasonable access to such
books and records.
23.2.5 Expenses; Subject to Arbitration. If an audit determines
that, as a result of misinformation provided by CSXI, CSXI's failure to
properly apply the methodologies under Article 9 or other failure to comply
with this Agreement, CSXI overcharged APL or LTS by five percent (5%) or
more with respect to any audited matter, CSXI shall reimburse APL or LTS,
as applicable, for the expense of such audit.
23.3 Audits Under Appendix 9. Provisions for payment of audit costs under
Appendix 9 are set forth in Appendix 23.3.
24. GENERAL
24.1 Additional Documents. Subject to the terms and conditions of this
Agreement, each party will use reasonable efforts to do, or cause to be done,
all actions and things necessary or advisable to consummate the transactions
contemplated by this Agreement.
Confidential
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24.2 Modification. This Agreement constitutes the entire agreement between
the parties with respect to the transportation under this Agreement and
supersedes all previous oral or written understandings, agreements and
commitments as to the subject matter hereof. This Agreement, other than Exhibits
which may be modified by one party as set forth herein, may not be modified,
changed or altered except by written agreement signed by authorized
representatives of the parties.
24.3 Notices. Except as otherwise provided in this Agreement, any notice,
request, demand or approval to be given hereunder shall be in writing and shall
be considered delivered three (3) days after deposit with United States mail,
postage prepaid, certified or registered mail, return receipt requested, or one
day after deposit with UPS or other nationally recognized overnight courier
service, postage prepaid or upon hand delivery, as follows:
If to CSXI: CSX Intermodal, Inc.
000 Xxxx Xxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attn: Executive Vice President of Marketing and Sales
If to APL: APL Limited/APL Co. Pte Ltd.
0000 Xxxxxxxx
Xxxxxxx, XX 00000
Attn: Law Department
If to LTS: Pacer International, Inc.
d/b/a Pacer Stacktrain
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Vice President Transportation Purchasing
Any party may change the person to be notified or its address by written notice
to the other.
24.4 Waiver. If a party delays or fails to enforce any term or condition of
this Agreement, it will not be considered a waiver of enforcement or further
enforcement of that or any other term or condition. If a party consents or
approves of any act by the other party, it will not be considered to waive or
render unnecessary consent to or approval of any subsequent similar act.
24.5 Severability. Each and every clause of this Agreement shall be
severable from each other. In the event that any particular clause herein shall
be held invalid and null and void in any judicial proceeding, such finding shall
have no effect on the remaining clauses.
24.6 Applicable Law. This Agreement is subject to, and shall be construed
and enforced in accordance with, the laws of the State of Florida (excluding the
principles thereof governing conflicts or choice of law).
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24.7 Jurisdiction and Venue. Subject to the parties' agreement to
arbitrate, each party (a) agrees that any suit, action or other legal proceeding
arising out of or relating to this Agreement may be brought in any court of
competent jurisdiction in the City of Jacksonville or in the United States
District Court for the Middle District of Florida, (b) consents to the
jurisdiction of each such court in any such suit, action or proceeding, and (c)
waives any objection which it may have to the laying of venue of any such suit
or proceeding in any of such courts.
24.8 Survival. The provisions of Articles 11, 13, 14, 15, 17, 22 and 23,
and the Exhibits and Appendices referenced in such Articles, and Sections 19.4,
19.5, 24.6, 24.7 and 24.8 of this Agreement and any other provision that by its
terms or meaning is intended to survive, shall survive any termination of this
Agreement.
24.9 Benefit of Parties. Nothing in this Agreement shall be construed to
give any person or entity other than CSXI, APL and LTS, and their respective
successors and permitted assigns, any legal or equitable right, remedy or claim
under this Agreement.
24.10 Time is of Essence. Time is of the essence in the performance of each
party's obligations under this Agreement.
24.11 Interpretation. The parties acknowledge that the terms and conditions
of this Agreement are the result of their cooperative effort and, as such, no
provision shall be more strictly construed against a party on the basis that
such party was responsible for drafting such provision.
24.12 Joint and Several Liability. APL and LTS each agree that it shall be
jointly and severally liable for all APL or LTS obligations hereunder.
24.13 Cumulative Remedies. All rights and remedies conferred under this
Agreement or by any other instrument or law shall be cumulative and may be
exercised singularly or concurrently.
24.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers the day and year first above written.
CSX INTERMODAL, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Print Name: Xxxxxxxx X. Xxxxxx
--------------------------
Title: President
-------------------------------
PACER INTERNATIONAL, INC.,
d/b/a PACER STACKTRAIN
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Print Name: Xxxxx Xxxxxxxx
--------------------------
Title: Executive Vice President
-------------------------------
APL LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Print Name: Xxxxxxx X. Xxxxxx
--------------------------
Title: Vice President
-------------------------------
APL CO. PTE LTD.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Print Name: Xxxxxxx X. Xxxxxx
--------------------------
Title: Vice President
-------------------------------
Confidential
APPENDIX 1.1
DEFINITIONS
The following capitalized terms used in this Agreement will have the
following meanings:
1.1.1 "AAR" means the Association of American Railroads.
1.1.2 "Affiliate" means any entity that, under the principles of
statutory or common law, controls, is controlled by or is under common
control with another entity; "Affiliate" shall not, however, include (a)
entities related to LTS if they are not involved in or in need of
intermodal transportation of Containers or Trailers within the Eastern
States or (b) any entity or holding acquired or held by an Apollo Entity
(other than LTS and its Affiliates, as defined above through subparagraph
(a)) which is not operationally (other than as a customer), managerially or
otherwise related to LTS or APL, except through its affiliation with an
Apollo Entity.
1.1.3 This "Agreement" means this Intermodal Transportation Agreement,
as amended and in effect from time to time, including all Exhibits,
Appendices and other documents referenced herein.
1.1.4 "APL/LTS" means APL and LTS.
1.1.5 "APL/LTS Kearny Costs" shall have the meaning set forth in
Section 6.3.2 of Appendix 6.
1.1.6 "APL Movement" means a movement of a Container or Trailer
arranged by or for the benefit of APL.
1.1.7 "Apollo Entity" means Apollo Management, L.P. or any its
Affiliates.
1.1.8 "CFS" means APL's container freight station in South Kearny, New
Jersey.
1.1.9 "Chassis" means a wheeled underframe that can be attached to a
Container with a device for coupling to a self-powered tractor for movement
over the highway.
1.1.10 "Closing Date" means the date that the transaction between
Conrail, CSX Corporation and others is closed pursuant to the Transaction
Agreement dated June 10, 1997 between the parties to that transaction.
1.1.11 "Combined Terminal" means the Terminal in South Kearny, New
Jersey resulting from the combination of the Conrail intermodal terminal
and the APL terminal known as "APINY".
App. - 1 - Confidential
1.1.12 "Competitor" means a single business entity and its Affiliates
(excluding agents for alliances and consortia) that has a written
transportation agreement with CSXI with a term of at least five (5) years
under which the business entity commits to tender to CSXI either (i) 95% of
its and its Affiliates' volume or (ii) volumes of its and its Affiliates'
Containers and Trailers that are at least equal to those moved from time to
time by APL and LTS under this Agreement.
1.1.13 "Confidential Information" means the terms and conditions of
this Agreement and information that is proprietary to or held in confidence
by CSXI or APL/LTS, including, but not limited to, customer lists and
information, pricing formulas and data, rail rates and other charges set
forth herein, origin and destination information, traffic volumes and
commodities moved, train schedules and/or performance, cost data, financial
information, operating procedures and business plans and strategies.
1.1.14 "Conrail Agreement" means the API-Conrail Transportation
Service Agreement, as amended, dated June 1, 1988 between Conrail, American
President Intermodal Company, Ltd. and American President Lines, Ltd.
1.1.15 "Container" means a freight vehicle meeting ISO standards with
devices to enable ready attachment to a Chassis and which when loaded can
be stacked on a stack Intermodal Car.
1.1.16 "Container Rules" mean the Container and Trailer (TOFC/COFC)
Interchange Rules of the AAR, as amended and in effect at the time of
transportation under this Agreement.
1.1.17 "Conrail" means Consolidated Rail Corporation.
1.1.18 "Core Network" means those railroad O/D Pairs served from time
to time by CSXI's Affiliate, CSXT, including any O/D Pairs added in the
future by CSXI or its Affiliates as a result of corporate transactions or
otherwise.
1.1.19 "Cross-town Service" shall have the meaning set forth in
Paragraph B. 2.3.(8) of Exhibit 9.2.
1.1.20 "CSXI" means CSX Intermodal, Inc.
1.1.21 "CSXT" means CSX Transportation, Inc.
1.1.22 "CY" means a container yard.
1.1.23 "Dedicated Train" means a scheduled or non-scheduled train
carrying APL/LTS shipments (and shipments added by western carriers in
similar Equipment with the same destination as the APL/LTS shipments) that
is operated by CSXI at the specific request of APL/LTS.
App. - 2 - Confidential
1.1.24 "Directory No. 1" means CSXI's Service Directory No. 1, as it
may be amended, supplemented or superseded from time to time and in effect
on the date of service.
1.1.25 "Directory No. 3" means CSXI's Intermodal Directory No. 3, as
it may be amended, supplemented or superseded from time to time and in
effect on the date of service.
1.1.26 "Directory No. 8" means CSXI's Intermodal Directory No. 8, as
it may be amended, supplemented or superseded from time to time and in
effect on the date of service.
1.1.27 "Domestic Service" means rail transportation service of a
loaded or empty Container without a prior or subsequent waterborne
movement.
1.1.28 "Domestic Container" means a Container used in Domestic
Service.
1.1.29 "Door Move" means an APL or LTS Movement for which APL or LTS
is responsible for transportation of the cargo beyond the intermodal rail
ramp to the actual destination.
1.1.30 An "Eastern State" means a state specified in Exhibit 1.1.30.
1.1.31 An "Eastern Zone" means one of five areas within the Eastern
States specified in Exhibit 1.1.31.
1.1.32 "EDI" means electronic data interchange.
1.1.33 "Effective Date" shall have the meaning set forth in Section
3.4 of the Agreement.
1.1.34 "EMP/NACS R/T Rate" shall have the meaning set forth in
Paragraph B.2.3(11) of Exhibit 9.2.
1.1.35 "Equipment" means Containers and Chassis.
1.1.36 "ETA" means estimated time of arrival.
1.1.37 "Existing LTL Shippers" mean those existing LTL Shippers of LTS
set forth in Exhibit 1.1.37 as it may be amended from time to time upon
mutual agreement of the parties.
1.1.38 "Existing TPI Customers" mean those existing international
shipping customers of LTS set forth in Exhibit 1.1.38 as it may be amended
from time to time upon mutual agreement of the parties.
1.1.39 "FAK" has the meaning set forth in Appendix 7.5.
App. - 3 - Confidential
1.1.40 "FEU" means forty (40) foot equivalent units. For example, one
40 foot, one 45 foot, one 48 foot or one 53 foot Container equals one FEU
and two 20 foot Containers equal one FEU.
1.1.41 "Finished Vehicles" means (as described in STCC 3711) (i)
vehicles whose titles are held by any primary vehicle manufacturer, their
subsidiaries or their Affiliated companies or (ii) vehicles which are
destined for distribution and sale by any retail automobile dealership.
1.1.42 "Gateway" means any area within or near the western border of
Michigan, Illinois, Missouri, Kentucky, Tennessee, Mississippi, or
Louisiana, within which rail cars and their Containers are interchanged
between CSXT and another rail carrier, including but not limited to New
Orleans, Louisiana; Memphis, Tennessee; Chicago, Illinois and East St.
Louis, Illinois.
1.1.43 "Hot Container" means a priority shipment designated by APL/LTS
in accordance with Section 6.5.2 of Appendix 6.
1.1.44 "IMC" means intermodal marketing company.
1.1.45 "IMS" means APL Intermodal Management Services, a division of
American Consolidation Services of North America, Ltd., which is a
subsidiary of APL Limited offering retail intermodal services.
1.1.46 "Intermodal Cars" mean standard railroad flat cars or stack
cars designed to transport Domestic and International Containers and
Chassis in intermodal service.
1.1.47 "International Container" means a container used in
International Service.
1.1.48 "International Service" means rail transportation service of a
Container that has a prior or subsequent waterborne movement on the Pacific
Ocean. Such a Container will be considered to be in "International Service"
according to the following:
(a) If the Container moving over the Pacific Ocean made
landfall loaded with cargo, it will be and remain in International
Service for so long as it remains loaded and, if it is first unloaded
within the Eastern States, it will be and remain in International
Service for so long as and only if it remains empty until it leaves
the Eastern States.
(b) If the Container made landfall empty, it will be and remain
in International Service for so long as it remains empty and, if it is
first loaded with cargo in the Eastern States, it will be in
International Service for so long as and only if it remains loaded and
is intended to be placed on a ship for waterborne transportation on
the Pacific Ocean.
App. -4- Confidential
(c) If the Container is loaded or unloaded within the Eastern
States, will be and remain in International Service for so long as and
only if it remains in that loaded or empty condition until it is
placed on a ship for waterborne transportation on the Pacific Ocean.
1.1.49 A "Lane" means a rail movement on a round-trip basis between
two rail service points (i.e., O/D Pairs).
1.1.50 "Losses" mean any and all claims, liabilities, demands,
damages, losses, penalties, fines, costs and expenses, including but not
limited to attorneys', paralegals' and experts' fees and expenses and other
costs of defense.
1.1.51 "LTL Shippers" mean motor transportation providers moving less
than truckload size shipments.
1.1.52 "LTS Directory" means the LTS Stacktrain Services Directory, as
it may be amended, supplemented or superseded from time to time and in
effect on the date of service.
1.1.53 "LTS Movement" means a movement of a Container or Trailer
arranged by or for the benefit of LTS, other than an APL Movement in
International Service.
1.1.54 "LTS R/T Rate" shall have the meaning set forth in Paragraph
B.2.3(11) of Exhibit 9.2.
1.1.55 "Methodology" means the methodology for comparing the APL/LTS
rates to rates offered to other CSXI customers set forth in Exhibit 9.2.
1.1.56 "Mirror Period" shall have the meaning set forth in Paragraph
A.11.3 of Exhibit 9.2.
1.1.57 A "movement of the same type and size" means a movement of
Containers of the same type (whether loaded or empty, whether International
or Domestic) and size (whether 20', 40', 45', 48', 53' or other).
1.1.58 "Network Service Standard" shall have the meaning set forth in
Section 10.1.1 of Appendix 10.
1.1.59 "NOL" means Neptune Orient Lines Ltd.
1.1.60 "NS" means the Norfolk Southern Corporation and its Affiliates.
1.1.61 An "O/D Pair" means one way from an origin to a destination.
App. -5- Confidential
1.1.62 "Premium O/D Pair" means one of up to eight high-volume, high-
density O/D Pairs set forth in Exhibit 1.1.62 as it may be amended from
time to time upon mutual agreement of the parties.
1.1.63 "Premium O/D Service Standard" shall have the meaning set forth
in Section 10.1.2 of Appendix 10.
1.1.64 "Rail Allocation" means that portion of any change in the RPU
for LTS Movements in Transcontinental Domestic Service that is pursuant to
agreement shared among the rail carriers.
1.1.65 "Ramp Move" means an APL or LTS Movement for which APL's or
LTS' responsibility for transportation of the cargo ends at the intermodal
rail ramp.
1.1.66 "Rate Exhibits" mean Exhibits 4.1.1 to 4.1.5 setting forth
linehaul rates for transportation of shipments of the type and size
described therein.
1.1.67 "RCAF" means the Rail Cost Adjustment Factor, unadjusted for
productivity, published by the AAR from time to time.
1.1.68 "RPU" means linehaul revenues earned per Container.
1.1.69 "Slider Chassis" mean Chassis types that accommodate more than
one size of Container.
1.1.70 "SPQ" means a Special Price Quotation provided by CSXI based
upon the beneficial owner of the cargo, type of cargo, Equipment or the
origin and destination of a movement.
1.1.71 "STCC" means Standard Transportation Commodity Code.
1.1.72 "Subcontractors" mean inspectors, repairmen, vendors,
subcontractors, representatives and agents.
1.1.73 "Terminal" means any one of the intermodal terminals operated
by CSXI or its Affiliates serving the Core Network from time to time.
1.1.74 "TPI Customer" means an international shipping enterprise
(other than APL and its Affiliates) which has engaged APL or LTS to arrange
Transcontinental International Service for Containers owned or leased by
that international shipping enterprise.
1.1.75 "Trailers" means a vehicle equipped with a permanent
undercarriage or wheel assembly, with a device for coupling to a
self-powered tractor for movement.
App. -6- Confidential
1.1.76 "Truckload Shippers" means motor transportation providers
moving only truckload size loads, other than X.X. Xxxx and Xxxxxxxxx and
their respective Affiliates.
1.1.77 "Transcontinental" or "Transcontinentally" is used to describe
a movement (i) from a point outside the Eastern States that is west of the
Continental Divide to a point inside the Eastern States or (ii) from a
point inside the Eastern States to a point outside the Eastern States that
is west of the Continental Divide.
1.1.78 "Western Zone" means one of the three areas on the west coast
of the United States as set forth in Exhibit 1.1.31.
App. -7- Confidential
APPENDIX 4.1
RAIL SERVICES AND LINEHAUL RATES
Upon the Effective Date and during the term of this Agreement, CSXI will
arrange for rail transportation linehaul services for the movements described
below:
4.1.1 APL Movements in Pacific International Service. APL Movements of
Containers (including but not limited to temperature controlled, flat racks
and tank Containers) owned or leased by APL or its Affiliates in
Transcontinental International Service. Rates for those APL Movements
between O/D Pairs established to date are set forth in Exhibit 4.1.1.
4.1.2 APL and LTS Transcontinental Domestic Movements. APL or LTS
Movements of Containers (excluding temperature controlled and tank
Containers) owned or leased by APL or its Affiliates or Containers owned or
leased by LTS or its Affiliates in Transcontinental Domestic Service. Rates
for those APL or LTS Movements between O/D Pairs established to date are
set forth in Exhibit 4.1.2.
4.1.3 TPI Movements. APL or LTS Movements of Containers (including but
not limited to temperature controlled, flat racks and tank Containers)
owned or leased by Existing TPI Customers in Transcontinental International
Service. Rates for those APL or LTS Movements for Existing TPI Customers
between O/D Pairs established to date are set forth in Exhibit 4.1.3.
4.1.4 Temperature Controlled Movements. LTS Movements of temperature
controlled Containers owned or leased by third parties in Transcontinental
Domestic Service. Rates for those LTS Movements between O/D Pairs
established to date are set forth in Exhibit 4.1.4.
4.1.5 Empty Movements with Prior and Subsequent Transcontinental
Movements. APL or LTS Movements of empty Containers (including but not
limited to temperature controlled, flat racks and tank Containers) owned or
leased by LTS or APL or their Affiliates between an origin and a
destination which are both in the Eastern States and where that movement
has immediately prior and subsequent Transcontinental movements. Rates for
those APL or LTS Movements between O/D Pairs established to date are set
forth in Exhibit 4.1.5.
App. -8- Confidential
APPENDIX 4.3
TERMINAL AND CONTAINER YARD SERVICES
CSXI will provide the Terminal and CY services, and APL/LTS will use and
pay for such services, at the Terminals as described and at the charges set
forth in Exhibit 4.3 and as set forth in Directory No. 1 as modified herein. At
any time and from time to time three (3) years or more after the Effective Date,
upon thirty (30) days' prior notice to APL/LTS, CSXI may propose changes to
Exhibit 4.3. APL/LTS may object to any changes to Exhibit 4.3 that have a
material economic impact on their business. The parties agree to negotiate in
good faith to contractually modify any such change to address APL's/LTS'
objection. If, after good faith negotiations, CSXI and APL/LTS are unable to
reach agreement, either CSXI or APL/LTS may submit their dispute to arbitration
under Article 22. In determining how to resolve a dispute regarding a change to
Exhibit 4.3, the arbitrator shall consider, among other relevant factors, (a)
changes in the governmental regulations affecting the transportation industry
resulting in increased costs in providing these Terminal services, (b) a
material disparity between the actual costs to CSXI to provide these Terminal
services and the Terminal charges then in effect such that the profitability of
performing these services for APL/LTS has become materially less than it was on
the Effective Date of this Agreement, and (c) the economic disadvantages to APL
and LTS and APL's or LTS' capability to competitively increase rates to its
customers to compensate for the increased costs which APL and LTS will incur as
a result of the proposed changes. No change to which APL/LTS has objected will
take effect until APL/LTS has agreed to the original or modified change or the
matter has been resolved by arbitration. CSXI, at its option, may provide any
Terminal services not described in Exhibit 4.3 or in Directory No. 1 requested
by APL or LTS on terms and rates mutually agreed to by the parties.
App. -9- Confidential
APPENDIX 4.4
COOPERATIVE EFFORTS TO MINIMIZE COSTS
It is the parties' intent that, at the onset of this Agreement, APL and
LTS shall not incur a cost increase or dilute the rate reductions secured under
this Agreement by utilizing Dedicated Trains under Section 4.4 of the Agreement
in an effort to substantially duplicate schedules and frequency of service
enjoyed prior to the Effective Date. The parties will coordinate train schedules
and otherwise cooperate with each other in order to minimize each party's cost
exposure from operating an increased number of Dedicated Trains when compared to
the number operated prior to the Effective Date.
App. -10- Confidential
APPENDIX 4.5
NS EXCLUSIVE POINT SERVICE
4.5.1 Ramp Moves. For locations where the NS provided direct service to
APL or LTS but CSXI does not provide such service, the rates for Ramp Moves in
effect on the Effective Date either (a) include an amount reflecting the motor
carrier expense which CSXI incurs on behalf of APL or LTS or (b) are lower rates
which reflect the fact that APL or LTS pays the motor carrier directly. In
either case, except as a result of rate adjustments under this Agreement, APL
and LTS will pay no more for the total move to these NS exclusive points than
they were paying on a per Container basis before the Effective Date. The parties
agree to coordinate intermodal access to these locations to minimize the cost of
Ramp Moves to APL/LTS and CSXI.
4.5.2 Door Moves. With respect to those locations where CSXI does not
provide direct rail service but the NS does provide direct rail service, if the
move has been designated as a Door Move, in performing the services under
Sections 4.1.1, 4.1.2, 4.1.3, 4.1.4 and 4.1.5 of Appendix 4.1, CSXI and APL/LTS
will coordinate delivery of cargo to the customer's door from either a Terminal
or CSXI's drop lot so as to offer a transit schedule to that customer
substantially equivalent to or better than that enjoyed via APL's/LTS' routing
on the NS in 1998. The parties will coordinate intermodal access to these
locations that minimizes each party's cost exposure.
App. -11- Confidential
APPENDIX 4.8
TRAIN SCHEDULES AND ROUTING
CSXI will work jointly with APL/LTS to establish mutually agreeable
train schedules for each origin/destination pair on the Core Network. Such train
schedules will be equal to or faster than those offered to other similarly
situated intermodal customers of CSXI, including train schedules used to
transport shipments in CSXI owned or leased Containers or Trailers. CSXI will
notify APL/LTS of any changes in a train schedule at least sixty (60) days in
advance (unless law, regulation or overriding commercial circumstances require a
shorter notice period) and on a continuing basis through communications between
the CSXI Customer Service Center and appropriate offices of APL/LTS, semi-annual
service improvement meetings and APL/LTS and CSXI service design group
discussions. CSXI will consult with APL/LTS, will consider the harm to APL's and
LTS' competitiveness from the change in the train schedule and endeavor to
accommodate APL's/LTS' reasonable requests to the extent commercially
practicable in making its determination regarding the train schedule. If CSXI
and APL/LTS are unable to agree on a change to the train schedule and CSXI makes
the train schedule change, APL or LTS may divert Container traffic in that Lane,
and the volume commitments shall be adjusted as to that Lane provided that APL
or LTS is able to demonstrate that it would suffer substantial economic harm as
a result of the train schedule change and CSXI is unable to remedy that economic
harm. Unless APL or LTS exercises this right to divert Container traffic within
one hundred eighty (180) days of the change in the train schedule, the volume
commitment shall not be adjusted as to that Lane. Events that constitute
"substantial economic harm" from a train schedule change include but are not
limited to: (a) shipments that under the train schedule prior to the change were
available between 6:00 a.m. and 8:00 a.m. are not available prior to 10:00 a.m.;
(b) the train schedule change results in an additional day in the availability
when compared to its availability prior to the train schedule change; and (c)
shipments that under the prior train schedule were available between 9:00 a.m.
and 11:59 a.m. are no longer available prior to 2:00 p.m. For purposes of this
Appendix 4.8, the term "availability" refers to a Container's availability at a
Terminal or west coast destination.
App. -12- Confidential
APPENDIX 4.9
CSXI'S RIGHT TO MODIFY
CSXI may modify, add or delete Terminal services, hours of operation,
Terminals or other facilities and change the services it offers to customers
from time to time. CSXI will notify APL/LTS of any such modifications, additions
or deletions at least sixty (60) days in advance (unless law, regulation or
overriding commercial circumstances require a shorter notice period) and on a
continuing basis through communications between the CSXI Customer Service Center
and appropriate offices of APL/LTS, semi-annual service improvement meetings and
APL/LTS and CSXI service design group discussions. CSXI will consult with
APL/LTS, will consider the harm to APL's and LTS' competitiveness from these
changes and endeavor to accommodate APL's/LTS' reasonable requests to the extent
commercially practicable in making its determination regarding these changes. If
CSXI and APL/LTS are unable to agree on a change to CSXI's services and CSXI
makes the change to its service, APL or LTS may divert Container traffic
affected by the change in CSXI service, and the volume commitments shall be
adjusted as to that Container traffic provided that APL or LTS is able to
demonstrate that it would suffer substantial economic harm as a result of the
services change and CSXI is unable to remedy that economic harm. Unless APL or
LTS exercises this right to divert Container traffic within one hundred eighty
(180) days of the change in CSXI service, the volume commitment shall not be
adjusted as to that Container traffic.
App. -13- Confidential
APPENDIX 4.11
APPLICABILITY OF DIRECTORY NO. 1
All services provided to APL/LTS by CSXI on the Core Network or at any
Terminal under this Agreement are subject to the provisions of Directory No. 1
as modified in Exhibit 4.11. In the event of any conflict between the terms of
this Agreement and terms of Directory No. 1, the terms of this Agreement shall
prevail. APL and LTS acknowledge receipt of the current Directory No. 1. CSXI
may amend or reissue Directory No. 1 from time to time upon thirty (30) days'
prior written notice. APL/LTS may object to any changes in an amended or
reissued Directory No. 1 that have a material economic impact on their business.
The parties agree to negotiate in good faith to contractually modify any such
change to address APL's/LTS' objection. If, after good faith negotiations, CSXI
and APL/LTS are unable to reach agreement, either CSXI or APL/LTS may submit
their dispute to arbitration under Article 22. In determining how to resolve a
dispute regarding a change to Directory No. 1, the arbitrator shall consider,
among other relevant factors, (a) changes in the governmental regulations
affecting the transportation industry resulting in increased costs that are not
then accounted for in the Directory charges then in effect, (b) a material
disparity between CSXI's costs in performing these Directory No. 1 services and
the amount it is permitted to charge APL or LTS under this Agreement such that
the profitability of performing these services for APL/LTS has become materially
less than it was on the Effective Date of this Agreement and (c) the economic
disadvantages to APL and LTS and APL's or LTS' capability to competitively
increase rates to its customers to compensate for the increased costs which APL
and LTS will incur as a result of the proposed changes. No change to which
APL/LTS has objected will take effect until the APL/LTS has agreed to the
original or modified change or the matter has been resolved by arbitration.
APL/LTS will, however, comply in full with, and shall not have the right to
object to, all provisions in Directory No. 1 related to requirements of federal,
state, and local laws or ordinances or provisions related to safety, hazardous
materials, and environmental issues.
App. -14- Confidential
APPENDIX 4.13
OTHER TYPES OF TRAFFIC
Services and linehaul rates for any APL or LTS Movements of Containers
owned or leased by APL, LTS or their respective Affiliates in International or
Domestic Service with a prior or subsequent waterborne movement on the Atlantic
Ocean or the Gulf of Mexico will be set forth in a separate agreement.
Similarly, services and linehaul rates for any APL or LTS Movements of
Containers owned or leased by APL, LTS or their respective Affiliates in
Domestic Service with both the initial rail origin and final rail destination in
the Eastern States, other than empty Container movements described in Section
4.1.5 of Appendix 4.1, will be set forth in a separate agreement.
App. -15- Confidential
APPENDIX 5.2
VOLUME COMMITMENT
5.2.1 APL's International Volume Commitment. During each calendar year
of this Agreement, APL will tender to CSXI, through LTS or otherwise, a minimum
of 95% of all rail APL Movements of Containers (including but not limited to
temperature controlled, flat racks and tank Containers) owned or leased by APL
or its Affiliates (including but not limited to NOL) in Transcontinental
International Service involving rail movements east of a Gateway.
5.2.2 APL and LTS' Transcontinental Domestic Volume Commitment. During
each calendar year of this Agreement, APL and LTS will tender to CSXI a minimum
of 95% of all rail APL and LTS Movements in Transcontinental Domestic Service
involving rail movements east of a Gateway of Containers (excluding temperature
controlled and tank Containers) owned or leased by APL or its Affiliates
(including but not limited to NOL) and Containers owned or leased by LTS or its
Affiliates.
5.2.3 LTS' TPI Volume Commitment. During each calendar year of this
Agreement, APL and LTS will tender to CSXI a minimum of 95% of all rail APL or
LTS Movements of Containers (including but not limited to temperature
controlled, flat racks and tank Containers) owned or leased by Existing TPI
Customers in Transcontinental International Service involving rail movements
east of a Gateway. To the extent that CSXI provides rates and service to
additional TPI Customers obtained by APL or LTS from time to time and such
additional TPI Customers are added to Exhibit 1.1.38, then APL and LTS will be
subject to the foregoing volume commitment with respect to such additional TPI
Customers.
5.2.4 Empty Container Volume Commitment. During each calendar year of
this Agreement, APL and LTS will tender to CSXI a minimum of 95% of all APL and
LTS Movements by rail of empty Containers (including but not limited to
temperature controlled, flat racks and tank Containers) owned or leased by LTS,
APL or their respective Affiliates (a) between an origin and destination which
are both in the Eastern States where that movement has immediately prior and
subsequent Transcontinental movements and (b) moving in Domestic Service to or
through a Gateway.
5.2.5 LTS' Transcontinental Temperature Controlled Volume Commitment.
During each calendar year of this Agreement, LTS will tender to CSXI a minimum
of 95% of all rail LTS Movements in Transcontinental Domestic Service involving
rail movements east of a Gateway of temperature controlled Containers owned or
leased by third parties.
5.2.6 Exemption for Low Volume Lanes. The foregoing volume commitments
shall not apply to any Lane in which APL's and LTS' combined annual volume is
less than 500 Containers of all sizes and types.
5.2.7 Compliance with the Volume Commitments. APL and LTS shall not
arrange for, solicit or permit the rail transportation of (a) cargo or
Containers in Transcontinental International Service, (b) cargo or Containers in
Transcontinental Domestic Service, (c) empty
App. -16- Confidential
Containers in Domestic Service or (d) third parties' temperature controlled
Containers through persons or entities in a manner that results in avoidance of
the volume commitments. However, APL shall not be in violation of this Section
5.2.7 of this Appendix 5.2 when IMS does not tender its shipments to LTS
provided that APL or LTS cannot use this exception to avoid the volume
commitments.
5.2.8 Reports on Volume Guarantee. Within thirty (30) days following
the end of each calendar year and at the request of CSXI, APL/LTS shall provide
to CSXI a certification as to whether or not APL and LTS are in compliance with
the volume commitments set forth in this Appendix 5.2. If the certification
shows that APL or LTS is not in compliance with the volume commitments, APL/LTS
shall certify the extent thereof.
5.2.9 Liquidated Damages. APL and LTS shall pay to CSXI, as liquidated
damages and not as a penalty, an amount equal to Seventy-Five and 00/100 Dollars
($75.00) multiplied by the number of Containers by which APL and LTS failed to
comply with each of the volume commitments under this Appendix 5.2. This amount
shall be paid with the certification described in Section 5.2.8 of this Appendix
5.2.
App. -17- Confidential
APPENDIX 5.8
NOTIFICATION TO CUSTOMERS OF DIRECTORY NO. 1
APL and LTS shall inform its customers that the provisions of Directory
No. 1 apply to their shipments using CSXI's transportation services and they
must comply with provisions of Directory No. 1. If (a) LTS states in the LTS
Directory that Directory No. 1 applies to any services rendered by CSXI and that
CSXI has a maximum limitation of liability of $250,000 per Container, (b) the
LTS Directory is provided to LTS' customer and (c) the customer's contract with
LTS incorporates the LTS Directory, then LTS will be deemed to have met its
obligation to inform its customers of the applicability of Directory No. 1. If
APL develops an equivalent procedure for notifying its customers of the
applicability of Directory No. 1 and of its limitations of liability, then APL
will be deemed to have met its obligation to inform its customers of the
applicability of Directory No. 1.
App. -18- Confidential
APPENDIX 7.2
NONAPPLICABILITY OF RATES FOR CERTAIN SHIPPERS
Movements for X.X. Xxxx and Xxxxxxxxx (whether or not moving in
Containers owned or leased by LTS, APL or their respective Affiliates), other
Truckload Shippers (unless moving in APL or LTS owned or leased Containers),
United Parcel Service, LTL Shippers other than the Existing LTL Shippers, TPI
Customers other than the Existing TPI Customers, the United States Postal
Service and Finished Vehicle Shipments may not be transported at the rates set
forth in the Rate Exhibits. LTS shall be permitted to offer applicable APL/LTS
linehaul rates available under this Agreement to its Existing LTL Shippers and
Existing TPI Customers.
App. -19- Confidential
APPENDIX 7.3
NO CO-LOADING
APL/LTS shall not use the linehaul rates provided under this Agreement
for movements of empty or loaded Containers owned or leased by asset-owning
transportation providers other than its Existing TPI Customers, Existing LTL
Shippers or Affiliates of APL or LTS.
App. -20- Confidential
APPENDIX 7.5
FAK CARGO ONLY
The rates set forth in the Rate Exhibits apply only to cargo which is
accepted under freight, all kinds ("FAK") pricing as defined in Directory No. 1;
provided however, that the rates in the Rate Exhibits shall apply to bundled
Chassis and cigarettes moved in Containers. If APL or LTS wish to transport
non-FAK cargo (other than bundled Chassis and cigarettes) in movements otherwise
covered under a Rate Exhibit, APL or LTS may request an SPQ.
App. -21- Confidential
APPENDIX 7.6
CONVENTIONAL/STACK CAR RATES
Separate rates are set forth in the Rate Exhibits for Containers moving
in stack Intermodal Car service and Containers moving TOFC in conventional
service and shall apply depending on whether the shipments are moved in stack or
conventional service. CSXI acknowledges that prior to the Effective Date, APL
and LTS moved a certain percentage of its Containers in the Southeast in stack
service and the remaining percentage in conventional service. It is the parties'
intent that, at the onset of this Agreement, APL and LTS shall not incur a cost
increase or dilute the rate reductions secured under this Agreement if the
decrease in the percentage of APL and LTS shipments in stack service results
from certain Lanes in the Core Network not being cleared for stack Intermodal
Car service or results from the train schedules implemented by CSXI. The parties
will cooperate with each other in order to minimize each party's cost exposure
from operating a decreased percentage of stack Intermodal Cars when compared to
the percentage operated prior to the Effective Date.
App. -22- Confidential
APPENDIX 7.10
EFFECTIVE DATE OF NORTHEAST RATES
It is contemplated by the parties that the Closing Date will be June 1,
1999 and the rates in the Rate Exhibits applicable to Northeastern traffic will
be effective on December 1, 1999. If the Closing Date is later than July 1,
1999, CSXI will refund to APL and LTS the difference between the total freight
charges paid to Conrail at the current Conrail rates and the freight charges
that APL and LTS would have paid under the Rate Exhibits for Northeastern
traffic for the period of time commencing January 1, 2000, until the rates in
the Rate Exhibits become effective. Payment of such refund will be made within
thirty (30) days of the effective date of the Rate Exhibits as they apply to
Northeastern traffic.
App. -23- Confidential
APPENDIX 8
RATE ADJUSTMENTS
8.1 Rate Changes. The linehaul rates set forth in the Rate Exhibits shall
be adjusted as set forth in this Appendix 8.
8.2 APL International Rate Adjustments.
8.2.1 RCAF Adjustment. Beginning July 1, 2000, the linehaul rates set
forth in Exhibit 4.1.1 shall be adjusted semi-annually by a percentage
equal to fifty percent (50%) of the percentage change in the RCAF
calculated as set forth below. The percentage change will be calculated to
the third decimal place. Any adjustments to linehaul rates shall be rounded
to the nearest whole dollar. The adjusted linehaul rates shall be computed
as follows:
Step 1.)
For July 1 Adjustment
((1/st/ Quarter Current Year RCAF) - (3rd Quarter Prior Year RCAF)) = A (as a %)
-----------------------------------------------------------------
3/rd/ Quarter Prior Year RCAF
For January 1 Adjustment
((3/rd/ Quarter Prior Year RCAF) - (1/st/ Quarter Prior Year RCAF)) = A (as a %)
-----------------------------------------------------------------
1/st/ Quarter Prior Year RCAF
Step 2.)
Take A for the adjustment date at issue multiply by (.5) = 50% of RCAF change
= B as a %
Step 3.)
Take current rate multiply by (1 + B) = Adjusted Rate
8.2.2 Limitations on Adjustments. Notwithstanding the foregoing, the
adjustment set forth in this Section 8.2 of this Appendix 8 shall not
exceed two percent (2%), up or down in any calendar year period.
8.3 LTS Transcontinental Domestic Rate Adjustments. Beginning April 1,
2000, the linehaul rates for loaded Containers set forth in Exhibit 4.1.2, as
then in effect, shall be adjusted quarterly in the following manner:
App.- 24 - Confidential
8.3.1 Year 1 to Year 4 Adjustment. For the first four calendar years of
this Agreement, LTS will, within fifteen (15) days after the end of each three
month period ending February 28 (or 29 in a leap year), May 31, August 31 or
November 30, notify CSXI of average RPU changes, by O/D Pair and type and size
of Container, that it has experienced in arranging Transcontinental Domestic
Service for its customers in Containers owned or leased by APL, LTS or their
respective Affiliates during that three month period. The linehaul rate set
forth in Exhibit 4.1.2 as then in effect for each O/D Pair and type and size of
Container will be adjusted up or down by 12% of the LTS average RPU change for
that O/D Pair and type and size of Equipment. For example: if the average
eastbound loaded 53' rate from March 1 through May 30, 2000 between Chicago and
Jacksonville was $2000 and for the same traffic from June 1 to through August
31, the rate enjoyed by LTS was $2200, then CSXI's charges to LTS would increase
by 12% of $200, or $24 for the 3 month period between October 1 and December 31,
2000.
8.3.2 Year 5 to Year 8 Adjustment. Beginning in the fifth calendar year of
this Agreement, Transcontinental Domestic linehaul rates set forth in Exhibit
4.1.2, as then in effect, will be adjusted quarterly, in the following manner:
(a) Each linehaul rate set forth in Exhibit 4.1.2 will be divided in
half creating "Half #1" and "Half #2".
(b) Half #1 will be adjusted in the manner described in Section 8.3.1
of this Appendix 8. However, the adjustment factor will be 16% of the
dollar change in the LTS average RPU. The same quarterly data will apply.
(c) Half #2 will be adjusted in the manner described in Section 8.2
of this Appendix 8.
(d) Half #1 and Half #2 will be summed, resulting in a new linehaul
rate to LTS.
(e) Since the Half #2 adjustment is taken semi-annually, only the
Half #1 adjustment will be calculated in connection with the April 1 and
October 1 adjustment.
8.3.3 Year 9 to Year 12 Adjustment. Beginning in the ninth calendar year of
this Agreement, Transcontinental Domestic linehaul rates set forth in Exhibit
4.1.2, as then in effect, will be adjusted in the same manner as in Section
8.3.2 of this Appendix 8 hereof, except the adjustment factor to Half #1
described in Section 8.3.2(b) of this Appendix 8 will be 20%.
8.3.4 Year 13 to Year 15 Adjustment. Beginning in the thirteenth calendar
year of this Agreement, Transcontinental Domestic linehaul rates set forth in
Exhibit 4.1.2, as then in effect, will be adjusted in the same manner as in
Section 8.3.2 of this Appendix 8 except the adjustment factor to Half #1 as
described in Section 8.3.2(b) of
App. - 25 - Confidential
this Appendix 8 will be 39% of the Rail Allocation; provided, however, that
if 39% of the Rail Allocation is less than 20% of the RPU change or if
there is no Rail Allocation, the Half #1 adjustment factor shall be 20%,
and further provided that if 39% of the Rail Allocation is greater than 24%
of the RPU change, the Half #1 adjustment factor shall be 24%. For example,
if the then current arrangements with rail carriers results in a 60% Rail
Allocation of any RPU change, then 40% of a $100 RPU change, or $40,
accrues to LTS and 60% of that $100 RPU change or $60 accrues to the rail
carriers. Thirty-nine percent of the Rail Allocation, 39% of $60, equals
$23.40 whereas twenty percent (20%) of the RPU change of $100 is $20 and
twenty four percent of the RPU change of $100 is $24. Accordingly, since
39% of the Rail Allocation is not over 24% of the RPU change and is not
under 20% of the RPU change, CSXI will adjust Half #1 of the linehaul rate
by $23.40. If the Rail Allocation is 35%, 39% of the Rail Allocation would
equal $13.65, and since $13.65 is less than $20 (20% of the RPU change of
$100), CSXI will adjust Half #1 by $20. If the Rail Allocation is 70%, 39%
of the Rail Allocation would equal $27.30, and since $27.30 is more than
$24 (24% of the RPU change of $100), CSXI will adjust Half #1 by $24.
8.4 TPI Rate Adjustments. The linehaul rates for Existing TPI Customers set
forth in Exhibit 4.1.3 shall be adjusted in the manner set forth in Section 8.2
of this Appendix 8.
8.5 Temperature Controlled Rate Adjustments. The linehaul rates for
temperature controlled Containers set forth in Exhibit 4.1.4 shall be adjusted
in the manner set forth in Section 8.2 of this Appendix 8.
8.6 Empty Container Rate Adjustments. The linehaul rates for empty
Containers set forth in Exhibits 4.1.2 and 4.1.5 shall be adjusted in the manner
set forth in Section 8.2 of this Appendix 8.
8.7 Dedicated Train Rate Adjustments. Dedicated Train pricing shall be
adjusted in the manner set forth in Section 8.2 of this Appendix 8.
8.8 Inequities. If the application of the methodologies described in
Sections 8.2 and 8.3 of this Appendix 8 result in inequities whether through the
application of only fifty percent (50%) of the RCAF or the 2% cap, the party
suffering the inequity may initiate negotiations to further adjust applicable
rates. If the parties are unable to agree on a plan to remedy the inequity, a
party may submit the dispute to arbitration for resolution under Article 22. For
purposes of this Section 8.8 of this Appendix 8, an "inequity" will include but
is not limited to (a) extraordinary fuel price increases, (b) change in the
governmental regulations affecting the transportation industry resulting in
increased costs that are not accounted for in the rate adjustments resulting
from the application of this Appendix 8 and (c) a material disparity between the
changes in actual costs used by CSXI for general pricing/costing analysis
compared to the rate adjustments resulting from application of this Appendix 8
such that the profitability of shipments under this Agreement becomes materially
less than it was on the Effective Date of the Agreement. When resolving disputes
regarding the application of this Appendix 8, the arbitrator shall consider the
factors set forth in the prior sentence and the economic disadvantages to APL
and LTS and APL's or LTS' capability to competitively increase rates to its
customers to compensate for the
App. - 26 - Confidential
increased costs which APL and LTS will incur as a result of the proposed rate
adjustments. No "inequity" shall be deemed to result from the application of
Article 9.
8.9 Adjustment for Fuel Rate Increases. The parties recognize that the
cost of fuel can be highly dynamic; that is, fuel costs can rise and fall
dramatically over relatively short periods of time. The parties further
recognize that, in such situations, it is to their mutual benefit to initiate a
process whereby the adjustment of the linehaul rates under this Appendix 8 is
accomplished on a more timely basis than is provided for in the preceding
paragraphs. Specifically, in the event that there is a dramatic and immediate
rise in the cost of fuel to CSXI, APL and LTS shall use their best efforts to
assess and collect a fuel surcharge per loaded Container to the maximum extent
allowed by the market as an addition to the rates which they assess their
customers. APL and LTS shall pay to CSXI the amount of fuel surcharge which they
collect from their customers but in no event will the amount paid by APL and LTS
exceed the amount of fuel cost increase that CSXI has incurred on a per
Container basis. The parties will work together to develop a procedure to adjust
the RCAF factor used to apply the Section 8.2 of this Appendix 8 methodology
during the period in which a fuel surcharge is in effect.
8.10 Timing of Adjustments Effectiveness. The rate changes calculated
under the methodology in Section 8.2 of this Appendix 8 will become effective on
January 1 and July 1 of each year, with the first adjustment taking effect on
July 1, 2000. The rate adjustment set forth in Section 8.3 of this Appendix 8
will become effective on July 1, October 1, January 1 and April 1 of each year,
with the first adjustment taking effect on April 1, 2000.
8.11 Successor to RCAF; Rebasing of RCAF. If the AAR discontinues
publication of the RCAF, then the successor index to the RCAF published by the
AAR shall be used. If no such successor index is published, APL, LTS and CSXI
will use a rail cost adjustment factor mutually determined. If the parties are
unable to agree on a successor rail adjustment factor, the issue shall be
submitted to arbitration in accordance with Article 22. The new index agreed
upon by the parties or determined in accordance with Article 22 shall be
effective from and after the date that publication of the RCAF is discontinued.
The parties agree to pay the rates applicable using the new index retroactively
to the adjustment date immediately following the discontinuance of the RCAF. If
the RCAF is rebased between any two (2) measurement periods, the earlier index
will be restated to the new base for purposes of computing the percentage
change.
8.12 Impact on Competitive Proposals Compliance.
8.12.1 Impact on Section 8.2 Adjustments. In adjusting linehaul rates
under Sections 8.2, 8.4, 8.5, 8.6, and 8.7 of this Appendix 8, the
following provisions regarding the interrelationship with Appendix 9 shall
apply. If CSXI is unable to adjust the rate fully by the 50% RCAF (with the
2% cap) because that rate increase would have resulted in CSXI no longer
being in compliance with Article 9, then at such time as that lower
comparable rate is no longer in effect, the APL/LTS linehaul rates can be
increased to a level no greater than that which would have applied in the
absence of the Article 9 limitation plus any normal adjustments that would
have applied to the APL/LTS rates
App. - 27 - Confidential
under the application of the Section 8.2 of this Appendix 8 methodology, so long
as and to the extent that the resulting rate is then in compliance with Article
9.
8.12.2 Impact on Section 8.3 Adjustments. In adjusting linehaul rates under
Section 8.3 of this Appendix 8, the following provisions regarding the
interrelationship with Article 9 shall apply. In calculating the adjustment of
rates under Section 8.3 of this Appendix 8, linehaul rates shall first be
adjusted by the Half #2 adjustment factor. If when the rate then in effect is
also adjusted by the appropriate Half #1 adjustment factor (or the adjustment
factor under Section 8.3.1 of this Appendix 8), CSXI would no longer be in
compliance with Article 9, then application of the Article 9 methodologies will
be suspended until the later of ninety (90) days from the discovery of the
noncompliance or the date CSXI is first contractually able to change that
customer's lower comparable rate to a level where it is in compliance with
Article 9. If CSXI is unable to adjust the rate fully by the Half #2 adjustment
because that Half #2 adjustment would have resulted in CSXI no longer being in
compliance with Article 9, then at such time as that lower comparable rate is no
longer in effect the APL/LTS linehaul rates can be increased to a level no
greater than that which would have applied in the absence of the Article 9
limitation plus any normal adjustments that would have applied to the APL/LTS
rates under the application of the Section 8.3 of this Appendix 8 methodology,
so long as and to the extent that the resulting rate is then in compliance with
Article 9. If the rate after adjustment by the Half #2 factor would not be in
compliance with Article 9 but upon adjustment by the Half #1 factor the
resulting rate would comply with Article 9, CSXI may then adjust the rate by the
Half #2 factor to the extent it may do so and remain in compliance with Article
9. If the suspension of the application of Article 9 with respect to a Half #1
adjustment under this Section 8.12.2 has enabled CSXI to provide a customer with
a rate for a given type and size of Container and O/D pair that is lower than
the APL/LTS rate then in effect and CSXI subsequently lowers that customer's
rate during the suspension of Article 9, then CSXI shall lower the APL/LTS rate
by the dollar increment that CSXI has subsequently lowered that customer's rate.
App. - 28 - Confidential
APPENDIX 9
COMPETITIVE PROPOSALS
9.1 Competitive Objectives.
9.1.1 Acknowledgement of Competitive Environment. The parties
acknowledge that there is vigorous competition in the delivery of
intermodal transportation services to shippers, including competition from
various intermodal carriers, rail carriers, steamship lines, air cargo,
trucks and other forms of transportation.
9.1.2 Long Term Arrangement. The parties intend for this Agreement to
establish, on a long-term basis, competitive intermodal transportation
rates that will allow CSXI and APL/LTS to compete more effectively for the
business of shippers.
9.1.3 Acknowledgement of Favorable Rates. The parties acknowledge
that this Agreement is intended to provide substantial rate reductions to
APL and LTS as of the Effective Date over the rates they had been obligated
to pay prior to the Effective Date, and that this Agreement also provides
for favorable rate escalation limitations over the life of the Agreement.
9.1.4 Need for Relationship. APL and LTS have no rail transport
resources of their own in the Lanes contemplated by this Agreement and as a
result have a strong, independent business interest in a long, stable and
predictable relationship with CSXI for such intermodal transport.
9.1.5 Relation of Volume Commitment to Favorable Rates. In order to
assure continued access to CSXI's transportation resources and favorable
and reasonably stable rates for such access, APL and LTS jointly have
requested an Agreement for a term of fifteen (15) years with two (2)
potential renewals of five (5) years each. With such access and pricing
assured, APL and LTS also desire to ship virtually all of certain
categories of their volumes through CSXI under this Agreement. Accordingly,
APL and LTS have proposed the 95% volume commitments under Appendix 5.2.
The parties believe that substantial efficiencies can be generated on the
Core Network associated with the volume of business that APL and LTS intend
to move under this Agreement.
9.1.6 Agreement for Competitive Proposals Protection. In view of the
length of the Agreement term and APL's/LTS' reliance on the Core Network
for the transport of their Containers in Transcontinental Domestic Service
and International Service, APL and LTS have further requested that CSXI
provide them with its most favorable rates as set forth in this Appendix 9
and the Exhibits referred to herein.
9.2 Competitive Protection for APL's and LTS' Transcontinental Movements.
For APL or LTS Movements of Containers under Sections 4.1.1, 4.1.2 and 4.1.3 of
Appendix 4.1 interchanged to or from CSXI at Gateways where CSXI participates in
Transcontinental movements on an Interline or Rule 11 basis, CSXI agrees to
compare the linehaul rates set forth
App. - 29 - Confidential
in Exhibits 4.1.1, 4.1.2 and 4.1.3 to other CSXI customer's linehaul rates in
accordance with the Methodology, subject to the following:
9.2.1 Exception. If in any calendar year during the term of
this Agreement (a) APL's and LTS' annual combined volume of Containers
moved under this Agreement decreases to less than 75% of the higher of
(i) APL's/LTS' 1998 combined volume of 358,621 Containers or (ii) their
combined Transcontinental annual volume in 1999, and (b) APL's and LTS'
volume of a type and size in a Lane is less than 75% of a Competitor's
volume of a similar type and size in that Lane, then CSXI shall have
the right to offer linehaul rates to the Competitor in that Lane for
that type and size of Container as much as $80 per round-trip below
that offered to APL and LTS. If APL and LTS are later able to increase
their volume to above (a) 75% of the higher of such 1998 or 1999 volume
or (b) 75% of a Competitor's volume of a similar type and size in that
Lane, CSXI shall reinstate the Methodology without the up to $80 rate
differential to linehaul rates in that Lane for the calendar year
following the calendar year in which APL and LTS were again able to
meet such criteria.
9.2.2 Early Expiration Option. If (a) a Competitor has lower
rates than APL and LTS in one or more Lanes under Section 9.2.1 of this
Appendix 9 and (b) the contract of the Competitor would expire prior to
expiration of this Agreement, APL/LTS may elect to terminate the volume
commitment under this Agreement with respect to those Lanes where the
Competitor has been provided lower rates under Section 9.2.1 of this
Appendix 9; provided however, that APL/LTS election will be void if, as
hereinafter provided, CSXI notifies APL/LTS that it will no longer
offer the lower rate to that Competitor under Section 9.2.1 of this
Appendix 9 under a new agreement with that Competitor for the remaining
term of this Agreement. The date of this Lane-specific volume
commitment termination will coincide with the termination of the
Competitor's contract. CSXI will notify APL/LTS when the conditions of
this Section 9.2.2 of this Appendix 9 have been met and of the
expiration date of the Competitor's contract. APL/LTS must notify CSXI
of its election to terminate its volume commitment with respect to such
a Lane no less than one hundred eighty (180) days prior to that date.
If, within sixty (60) days of CSXI's receipt of notice from APL/LTS of
its election to terminate its volume commitment with respect to a Lane,
CSXI notifies APL/LTS that, for the remaining term of this Agreement,
it agrees to no longer offer the lower rate under Section 9.2.1 of this
Appendix 9 to that Competitor upon expiration of the Competitor's
contract, then APL's/LTS' election to terminate the volume commitment
as to that Lane shall be void and of no further force and effect. If
CSXI has notified APL/LTS that it agrees to no longer offer the lower
rate to that Competitor upon expiration of its contract, then Section
9.2.1 of this Appendix 9 shall no longer apply with respect to that
Competitor in that Lane. Upon termination of the volume commitment
under Section 9.2.1 of this Appendix 9 with respect to a Lane, CSXI's
obligation to apply the methodologies in Article 9 and CSXI's service
commitment with respect to that Lane shall terminate and have no
further force or effect.
9.2.3 Effect of Less Than 25% 1998/1999 Volume. Except as
provided in Section 9.2.4 of this Appendix 9, if in any calendar year
during the term of this
App. -30- Confidential
Agreement APL's and LTS' annual combined volume moved under this
Agreement decreases to less than 25% of the higher of (a) APL's and
LTS' 1998 combined volume of 358,621 Containers or (b) their combined
Transcontinental volume in 1999, CSXI's obligation to apply the
Methodology to the APL/LTS linehaul rates will be suspended. If in any
subsequent calendar year APL's and LTS' combined annual volume exceeds
25% of such 1998 and 1999 annual volumes, whichever is higher, CSXI
shall reinstate its application of the Methodology to applicable rates
for the calendar year following the calendar year in which APL/LTS met
the 25% criteria. Suspension of CSXI's application of the Methodology
under this Section shall not suspend or otherwise affect APL's and LTS'
volume commitments under Appendix 5.2.
9.2.4 Continuing Protection in Certain Lanes. Notwithstanding
any decrease in APL's and LTS' annual combined volume to less than 25%
of the higher of 1998 or 1999 volumes as described in Section 9.2.1 of
this Appendix 9, if APL and LTS have a combined annual volume of all
sizes and types in a Lane that exceeds 500 Containers, CSXI shall be
obligated to apply the Methodology to the APL/LTS linehaul rates with
respect to other CSXI customers who have annual volumes in that Lane of
all sizes and types equal to or less than the APL and LTS volume of all
sizes and types in that Lane.
9.2.5 Exclusion of Lanes With Less Than 500 Containers. If in
any calendar year during the term of this Agreement APL's and LTS'
combined annual volume in a Lane is less than 500 Containers of all
sizes and types, CSXI's obligation to apply the Methodology to linehaul
rates in that Lane shall be suspended, and APL and LTS shall have no
volume commitment in that Lane. In any calendar year following a
calendar year in which APL's and LTS' annual combined volume exceeds
500 Containers in that Lane, the volume commitments set forth in
Appendix 5.2 shall again apply, and CSXI shall reinstate application of
the Methodology to linehaul rates for that Lane under Section 9.2 of
this Appendix 9. If, however, and to the extent that APL's and LTS'
movements in that Lane are then contractually committed to other
transportation providers, the volume commitments set forth in Appendix
5.2 shall not apply, and CSXI shall not reinstate application of the
Methodology to linehaul rates for that Lane under Section 9.2 of this
Appendix 9 except to the extent required by Section 9.2.4 of this
Appendix 9. Upon APL's and LTS' first opportunity to terminate its
contractual commitments to other providers in that Lane, APL's/LTS'
movements in that Lane will be subject to the volume commitments in
Appendix 5.2, and CSXI will be obligated to reinstate application of
the Methodology under this Section 9.2.5 of this Appendix 9. APL and
LTS shall not, subject to the sentence that follows, be required to
transfer movements upon the first opportunity to terminate contractual
commitments to other providers if CSXI linehaul rates in that Lane are
more than two percent (2%) higher than the other provider's rates and
CSXI's frequency and schedule of train service in that Lane is
materially inferior to the other provider's service. If CSXI's linehaul
rate is more than 2% higher than the other provider's rate and CSXI
wishes APL and LTS to comply with the volume commitments in that Lane,
then CSXI shall lower its linehaul rate to equal such other provider's
rate for so long as that rate is available from the other provider.
App. -31- Confidential
9.3 Rate Protection Against CSXU Shipments. Since CSXI may offer
transportation services in its CSXU Containers that is similar to the
Transcontinental Domestic Services offered by LTS, CSXI has agreed to further
compare and adjust, if appropriate, the LTS' Transcontinental Domestic Container
linehaul rates set forth in Exhibit 4.1.2 as described in this Section 9.3 of
this Appendix 9.
9.3.1 Appointment of Auditor. Upon the request of either
party, CSXI and LTS shall select a mutually agreeable independent
auditor to perform the investigation and services required in this
Section 9.3 of this Appendix 9. The provisions of Section 23.3 of the
Agreement shall apply to audits under this Section 9.3 of this Appendix
9. The auditor will apply the methodology described in this Section 9.3
of this Appendix 9 with respect to loaded Transcontinental Domestic
Containers of the specified size moving in Lanes within the Western
Zone and Eastern Zone pair(s) served by the same Gateway specified by
the party requesting the audit.
9.3.2 Rate Analysis and Resulting Rate Reduction.
(a) The auditor will determine, for the three month
period preceding initiation of the audit, the following
calculations with respect to loaded Containers moving in each
Lane within the requested Western and Eastern Zone pair(s) and
Gateway:
(i) The auditor will determine a westbound western
average rate for each of CSXI and LTS by dividing the
total linehaul revenues payable by CSXI and LTS,
respectively, less incentives, refunds and similar
payments, to western carriers for the requested size of
Transcontinental Domestic Container moving westbound
from the Gateway in question to each point in the
requested Western Zone by the total volume of CSXI's or
LTS' Transcontinental Domestic Containers, whichever is
applicable, moving in that westbound O/D Pair (the
"Westbound Western Cost" for that westbound O/D Pair).
(ii) The auditor will determine an eastbound western
average rate for each of CSXI and LTS by dividing the
total linehaul revenues payable by CSXI and LTS,
respectively, less incentives, refunds and similar
payments, to western carriers for the requested size of
Transcontinental Domestic Container moving eastbound to
the Gateway in question from each point in the requested
Western Zone by the total volume of CSXI's or LTS'
Transcontinental Domestic Containers, whichever is
applicable, moving in that eastbound O/D Pair (the
"Eastbound Western Cost" for that eastbound O/D Pair).
(iii) The auditor will determine a westbound eastern
rate by dividing the total linehaul charges payable by
LTS under this Agreement for the requested size of
Transcontinental Domestic Container moving westbound in
each O/D Pair to the Gateway in question from each point
in
App. -32- Confidential
the requested Eastern Zone by LTS' total volume of
that size of Transcontinental Domestic Containers
moving in that westbound O/D Pair (the "Westbound
Eastern Cost" for that westbound O/D Pair).
(iv) The auditor will determine an eastbound
eastern rate by dividing the total linehaul charges
payable by LTS under this Agreement for that size of
Transcontinental Domestic Container moving eastbound
in each O/D Pair from the Gateway in question to each
point in the requested Eastern Zone by LTS' total
volume of that size of Transcontinental Domestic
Containers moving in that eastbound O/D Pair (the
"Eastbound Eastern Cost" for that eastbound O/D
Pair).
(v) The auditor will then add the following:
(A) the lower of LTS' or CSXI's Westbound Western
Cost from the Gateway to a point in the requested
Western Zone plus (B) the Westbound Eastern Cost to
that Gateway from a point in the requested Eastern
Zone plus (C) the westbound cost factor for 48 foot
Containers or the westbound cost factor for 53 foot
Containers set forth in Exhibit 9.3.2 applicable to
that size of Container and the requested Western and
Eastern Zone pair, plus a $13.00 per Container
efficiency factor. The cost factors set forth in
Exhibit 9.3.2 are intended to represent averages of
certain less significant costs to CSXI and APL/LTS
normally associated with Transcontinental Domestic
Container movement of that size between the relevant
Western and Eastern Zones and will be adjusted
annually upon mutual agreement of the parties. The
$13.00 per Container efficiency factor is intended to
reflect the greater efficiencies enjoyed by APL/LTS
with respect to these costs due to their volume and
networks. If Transcontinental Domestic Container
sizes change, the parties will agree on a cost factor
for each new Container size. The sum of these three
amounts will be "CSXI Westbound Floor" for that O/D
Pair. The "LTS Westbound Floor" for the same O/D Pair
will be the CSXI Westbound Floor less $13.00.
(vi) The auditor will add the following: (A) the
lower of the LTS' or CSXI's Eastbound Western Cost to
the Gateway from a point in the Western Zone plus (B)
the Eastbound Eastern Cost from that Gateway to a
point in the Eastern Zone plus (C) the eastbound cost
factor for 48 foot Containers or the eastbound cost
factor for 53 foot Containers set forth in Exhibit
9.3.2 applicable to that size of Container and the
requested Western and Eastern Zone pair, plus a
$12.00 per Container efficiency factor. The sum of
these three amounts will be "CSXI Eastbound Floor"
for that O/D Pair. The "LTS Eastbound Floor" will be
the CSXI Eastbound Floor less $12.00.
(vii) The auditor will add the CSXI Eastbound
Floor for an O/D Pair to the CSXI Westbound Floor for
the reverse O/D Pair to determine the "CSXI Lane
Floor" for that Lane within the requested Western and
App. -33- Confidential
Eastern Zone pair. The auditor will also add the LTS
Eastbound Floor for an O/D Pair and the LTS Westbound
Floor for the reverse O/D Pair to determine the "LTS
Lane Floor" for that Lane within the requested
Western and Eastern Zone pair.
(viii) The auditor will then subtract the CSXI
Westbound Floor from the CSXI Westbound Average Price
derived in accordance with Section 9.3.2(b)(i) of
this Appendix 9 to determine the "CSXI Westbound
Compliance Amount". The auditor will similarly
subtract CSXI Eastbound Floor from the CSXI Eastbound
Average Price derived in accordance with Section
9.3.2(b)(ii) of this Appendix 9 to determine "CSXI
Eastbound Compliance Amount". The auditor will then
add the CSXI Westbound Compliance Amount to the CSXI
Eastbound Compliance Amount to determine the "CSXI
Lane Compliance Amount".
(ix) The auditor will add the CSXI Lane
Compliance Amounts for each Lane that is within the
same requested Western and Eastern Zone pair served
by the same requested Gateway to determine the "CSXI
Zone Compliance Amount" for that Western and Eastern
Zone pair.
(b) The auditor will also determine, for the same
three month period preceding initiation of the audit, the
following calculations:
(i) The westbound average price will be
determined by dividing the total linehaul revenues
payable to CSXI by its IMC customers for that type of
Container moving westbound in each O/D Pair within
the requested Eastern and Western Zone pair (the
"CSXI Westbound Revenue") by the total volume of
movements for that westbound O/D Pair to determine
the "CSXI Westbound Average Price".
(ii) The eastbound average price will be
determined by dividing the total linehaul revenues
payable to CSXI by its IMC customers for that type of
Container moving eastbound in each O/D Pair within
the requested Eastern and Western Zone pair (the
"CSXI Eastbound Revenue") by the total volume of
movements for that eastbound O/D Pair to determine
the "CSXI Eastbound Average Price".
(iii) The auditor then will add the CSXI
Eastbound Average Price for an O/D Pair to the CSXI
Westbound Average Price for the reverse O/D Pair
served by the same requested Gateway to determine the
"CSXI Average Round-Trip Price" for that Lane within
the same requested Western and Eastern Zone pair.
(c) If the auditor finds that the CSXI Zone
Compliance Amount is a negative number, CSXI will reduce
the APL/LTS current linehaul rate for the requested size
of Transcontinental Domestic Containers for Lanes in that
Western
App. -34- Confidential
and Eastern Zone pair in the following manner. With respect to
a Western and Eastern Zone pair where the CSXI Zone Compliance
Amount is negative, the auditor will inform CSXI and LTS of
which Lanes have a negative CSXI Lane Compliance Amount and of
the amount of the CSXI Lane Compliance Amount. CSXI will
reduce the APL/LTS rates in those Lanes where the CSXI Lane
Compliance Amount is negative by the CSXI Lane Compliance
Amount (on an absolute basis). In implementing this rate
reduction, CSXI will determine the percentage of the total
APL/LTS round-trip linehaul rate in each direction. Such rate
in each direction will be reduced in proportion to the
percentage of the total round-trip rate that it represents. If
the auditor finds that the LTS Zone Compliance Amount is also
negative in the same Western and Eastern Zone pair, then rates
will be adjusted as set forth in Section 9.3.4 of this
Appendix 9.
(d) Such adjustments will apply prospectively and until
superseded by the next adjustment under this Section 9.3 of
this Appendix 9, but not less than three calendar months
following the effective date of the reduction in the
applicable APL/LTS rates.
9.3.3 Rate Analysis and Resulting Rate Increase. CSXI may
increase the rates set forth in Exhibit 4.1.2 in the following manner:
(a) The auditor will determine, for the same three
month period preceding initiation of the audit, the following
calculations:
(i) The auditor will subtract LTS Westbound Floor
from the LTS Westbound Average Price derived in
accordance with Section 9.3(b)(i) of this Appendix 9 to
determine the "LTS Westbound Compliance Amount". The
auditor will similarly subtract LTS Eastbound Floor from
the LTS Eastbound Average Price derived in accordance
with Section 9.3(b)(ii) of this Appendix 9 to determine
"LTS Eastbound Compliance Amount". The auditor will then
add the LTS Westbound Compliance Amount to the LTS
Eastbound Compliance Amount to determine the "LTS Lane
Compliance Amount".
(ii) The auditor will then add the LTS Lane
Compliance Amounts for each Lane that is within the same
requested Western and Eastern Zone pair served by the
same requested Gateway to determine the "LTS Zone
Compliance Amount" for that Western and Eastern Zone
pair.
(b) The auditor will determine, for the same three
month period preceding initiation of the audit, the following
calculations:
(i) The westbound average price will be determined
by dividing the total linehaul revenues payable to LTS
from its IMC customers for the requested size of
Container moving westbound in each O/D Pair within the
requested Eastern and Western Zone pair served by
App. -35- Confidential
the requested Gateway (the "LTS Westbound Revenue") by the
total volume of movements for that westbound O/D Pair to
determine the "LTS Westbound Average Price".
(ii) The eastbound average price will be determined
by dividing the total linehaul revenues payable to LTS from
its IMC customers for the requested size of Container moving
eastbound in each O/D Pair within the requested Eastern and
Western Zone pair served by the same requested Gateway (the
"LTS Eastbound Revenue") by the total volume of movements
for that eastbound O/D Pair to determine the "LTS Eastbound
Average Price".
(iii) The auditor then will add the LTS Eastbound
Average Price for an O/D Pair to the LTS Westbound Average
Price for the reverse O/D Pair served by the same requested
Gateway to determine the "LTS Average Round-Trip Price" for
that Lane within the same requested Western and Eastern Zone
pair.
(c) If the auditor finds that the LTS Zone Compliance
Amount is a negative number, CSXI will increase the APL/LTS current
linehaul rate for Transcontinental Domestic Containers for Lanes in
that Western and Eastern Zone pair in the following manner. With
respect to a Western and Eastern Zone pair where the LTS Zone
Compliance Amount is negative, the auditor will inform CSXI and LTS
of which Lanes have a negative LTS Lane Compliance Amount and of
the amount of the LTS Lane Compliance Amount. CSXI will increase
the APL/LTS rates in those Lanes where the LTS Lane Compliance
Amount is negative by the LTS Lane Compliance Amount (on an
absolute basis). In implementing this rate increase, CSXI will
determine the percentage of the total APL/LTS round-trip linehaul
rate in each direction. Such rate in each direction will be
increased in proportion to the percentage of the total round-trip
rate that it represents. If the auditor finds that the CSXI Zone
Compliance Amount is also negative in the same Western and Eastern
Zone pair, then rates will be adjusted as set forth in Section
9.3.4 of this Appendix 9.
(d) Such adjustments will apply prospectively and until
superseded by the next adjustment under Section 9.3 of this
Appendix 9, but not less than three calendar months following the
effective date of the increase in the applicable APL/LTS rates.
9.3.4 Rate Adjustment if Both the CSXI and LTS Zone Compliance
Amounts are Negative. If the auditor finds that the CSXI Zone
Compliance Amount and the LTS Zone Compliance Amount are both negative
in the same Western and Eastern Zone pair, then rates will be adjusted
as set forth in this Section 9.3.4 of this Appendix 9. In this case, if
in a particular Lane in that Western and Eastern Zone pair the CSXI
Lane Compliance Amount is negative but the LTS Lane Compliance Amount
is not negative, then CSXI will reduce the APL/LTS rates by the CSXI
Lane Compliance Amount (on an
App. -36- Confidential
absolute basis). If in a particular Lane in that Western and Eastern
Zone pair the LTS Lane Compliance Amount is negative but the CSXI Lane
Compliance Amount is not negative, then CSXI will increase the APL/LTS
rates by the LTS Lane Compliance Amount (on an absolute basis). If the
LTS Lane Compliance Amount and the CSXI Lane Compliance Amount are both
negative and the CSXI Lane Compliance Amount is greater (on an absolute
basis) than the LTS Lane Compliance Amount (on an absolute basis), then
CSXI will reduce the APL/LTS rates by the amount by which the CSXI Lane
Compliance Amount (on an absolute basis) exceeds the LTS Lane
Compliance Amount (on an absolute basis). Similarly, if the LTS Lane
Compliance Amount and the CSXI Lane Compliance Amount are both negative
and the LTS Lane Compliance Amount is greater (on an absolute basis)
than the CSXI Lane Compliance Amount (on an absolute basis), then CSXI
will increase the APL/LTS rates by the amount by which the LTS Lane
Compliance Amount (on an absolute basis) exceeds the CSXI Lane
Compliance Amount (on an absolute basis).
9.3.5 Analysis Under Follow-Up Audit. If an audit determines
that either the LTS Zone Compliance Amount and/or the CSXI Zone
Compliance Amount is negative and LTS' rates are thereby adjusted, in a
subsequent audit to determine whether the rate adjustment is no longer
warranted, the auditor will use the same process as described in
Sections 9.3.2 and 9.3.3 of this Appendix 9 except that the Westbound
Eastern Cost and the Eastbound Eastern Cost will not be recalculated
but rather the auditor will use the same Westbound Eastern Cost and
Eastbound Eastern Cost that were used in the initial audit.
9.3.6 Restoration of Rates. If an APL/LTS rate set forth in
Exhibit 4.1.2 is reduced or increased pursuant to an audit under this
Section 9.3 of this Appendix 9, and if a subsequent audit establishes
that the reduction or increase in rates is no longer warranted or the
amount of the reduction or increase in rates should be revised, the
linehaul rate charged to LTS will either be promptly restored (a) to
the levels otherwise provided for in this Agreement, including but not
limited to all adjustments under Article 8 or (b) to a new adjusted
level, as the case may be. Adjustments under Article 8 will not apply
to APL/LTS rates which come into effect as a result of an audit under
this Section 9.3 of this Appendix 9.
9.3.7 Review of Rates Outside of Audits. In addition to an
auditor's review of rates under this Section 9.3 of this Appendix 9,
CSXI or LTS may periodically apply the foregoing methodology without
using the other party's Westbound and Eastbound Western Costs. CSXI may
decrease LTS' rates from time to time based on its application of this
Section 9.3 of this Appendix 9 methodology. LTS or CSXI may recommend
to the other party increases in LTS' rates from time to time based on
its application of this Section 9.3 of this Appendix 9 methodology.
9.3.8 Minimum Volume. If in any calendar year during the term
of this Agreement, LTS' annual volume of Transcontinental Domestic
Containers moved under this Agreement decreases to less than twenty
five percent (25%) of the volume of Transcontinental Domestic
Containers moved in 1998 or 1999 (whichever is higher),
App. -37- Confidential
CSXI shall not be obligated to apply the methodology set forth in this
Section 9.3 of this Appendix 9 for the next calendar year. If in the
next calendar year or any later calendar year LTS' volume exceeds
twenty five percent (25%) of such 1998 and 1999 volumes, whichever is
higher, CSXI shall reinstate application of this Section 9.3
methodology ninety (90) days after commencement of the following
calendar year. Suspension of CSXI's obligation to reduce rates under
this Section 9.3 of this Appendix 9 shall not suspend or otherwise
affect LTS' volume commitments under Appendix 5.2.
9.3.9 Example. The process for calculating and applying the
methodology described in this Section 9.3 of this Appendix 9 is shown
in the examples set forth in Exhibit 9.3.
9.4 Competitive Protection for Temperature Controlled Movements.
With respect to LTS Movements of temperature controlled Containers owned or
leased by third parties under Section 4.1.4 of Appendix 4.1 interchanged to or
from CSXI at Gateways where CSXI participates in Transcontinental movements on
an Interline or Rule 11 basis and provided that the aggregate annual temperature
controlled Container volume for third parties moved by LTS under this Agreement
between all O/D Pairs exceeds the aggregate annual volume of temperature
controlled Containers owned or leased by any other shipper moving on the Core
Network between all O/D Pairs, CSXI will compare the linehaul rates set forth in
Exhibit 4.1.4 to CSXI's linehaul rates for temperature controlled shipments of
other customers owning or leasing temperature controlled Containers in
accordance with the Methodology.
9.5 Competitive Protection for Empty Movements. With respect to APL
and LTS Movements of empty Containers owned or leased by APL, LTS or their
Affiliates under Section 4.1.5 of Appendix 4.1 between an origin and destination
(excluding Gateways) which are both in the Eastern States, where that movement
has an immediately prior and an immediately subsequent Transcontinental
movement, CSXI shall apply the Methodology on a one-way basis to compare the
linehaul rates set forth in Exhibit 4.1.5 to CSXI's linehaul rates for other
customers moving empty Containers between the same origin and destination where
that customer's movement also has immediately prior and subsequent
Transcontinental movements.
9.6 Transition Period. CSXI shall not be in violation of Article 9
of the Agreement during the transition periods set forth below.
9.6.1 Existing Conrail Agreements. With respect to Conrail
contracts in effect as of March 15, 1999 which are allocated to CSXI,
there is no transition period.
9.6.2 Existing CSXI Agreements. With respect to CSXI
contracts in existence as of March 15, 1999, the transition period will
expire upon expiration of the current term of the respective contract.
For purposes of this Section 9.6.2 of this Appendix 9, the "current
term" shall mean the then current contractual period excluding any
subsequent renewal periods permitted under the relevant contract.
App. -38- Confidential
9.6.3 Agreements after March 15, 1999. The provisions of this
Section shall apply as of April 1, 2000 to any contracts entered into
by CSXI subsequent to March 15, 1999.
9.6.4 Effect of Suspension of Article 9. If CSXI's obligation
to apply the methodologies described in this Appendix 9 is suspended
for any period of time and upon reinstatement of application of the
methodologies, CSXI shall have ninety (90) days from the date it is
determined that APL and LTS have once again met the criteria for
application of the methodologies under this Appendix 9.
9.7 Effect of an Event of Default. CSXI's obligation to apply the
methodologies described in this Appendix 9 shall be suspended upon an Event of
Default by APL or LTS under Section 19.1 (a) or (b) of the Agreement. If the
Event of Default is cured at a later date, this Appendix 9 shall be reinstated
prospectively from the date of such cure, subject to the transition period under
Section 9.6.4 of this Appendix 9. If APL or LTS fails to meet any volume
commitment set forth in Appendix 5.2 in any calendar year such that it is a
material breach of this Agreement, CSXI's obligation under this Appendix 9 shall
be suspended for the following calendar year. The proof of APL's and LTS' cure
of such Event of Default in the case of failure to meet any volume commitment
set forth in Appendix 5.2 during a calendar year shall be APL's and LTS'
compliance with all volume commitments in the following calendar year or any
subsequent calendar year. If, during the following calendar year or any
subsequent calendar year, APL and LTS do so comply, CSXI shall reinstate
application of the methodologies under this Appendix 9 (in the absence of one or
more other defaults) within ninety (90) days after it is determined that APL and
LTS have once again met the volume commitments.
9.8 Inequities. If APL/LTS or CSXI believes in good faith that it is
economically disadvantaged from the application or interpretation of the
methodology in Section 9.3 of this Appendix 9, that party may initiate
negotiations, and the other party agrees to negotiate in good faith, to revise
the application or interpretation of the Section 9.3 of this Appendix 9
methodology to cure the alleged disadvantages, if any, to the party claiming it.
App. -39- Confidential
APPENDIX 10
SERVICE LEVEL COMMITMENT
10.1 Service Standards.
10.1.1 Definition of Network Service Standard. The Network
Service Standard applies to those movements on the Core Network
described in Sections 4.1.1, 4.1.2, 4.1.3 and 4.1.4 of Appendix 4.1 in
a Lane in which APL's and LTS' combined annual volume exceeds 500
Containers of all sizes and types. CSXI will be deemed to have met the
"Network Service Standard" for a movement if the Container moved under
this Agreement is available at the destination Terminal within two (2)
hours of its scheduled Container availability or interchange time under
CSXI's then current published schedule for the applicable O/D Pair.
10.1.2 Premium O/D Service Standard. The "Premium O/D Service
Standard" applies to movements described in Sections 4.1.1, 4.1.2,
4.1.3 and 4.1.4 of Appendix 4.1 in a Premium O/D Pair. CSXI will be
deemed to have met the "Premium O/D Service Standard" for a movement if
a Container moving in a Premium O/D Pair under this Agreement is
available at the destination Terminal within two (2) hours of its
scheduled Container availability or interchange time under CSXI's then
current published schedule for the applicable O/D Pair.
10.2 Service Standard Measurement Periods. CSXI will provide APL and
LTS with a monthly report showing CSXI's performance as compared to the Network
Service Standard and the Premium O/D Service Standard. CSXI shall, during any
three (3) calendar month period during the term of this Agreement, meet (a) the
Network Service Standard for an O/D Pair 80% of the time on average for
Container availability or rail interchange, as appropriate, or (b) the Premium
O/D Service Standard for a Premium O/D Pair 90% of the time on average for
Container availability or rail interchange, as appropriate.
10.3 Eligibility for Performance Penalty. If (a) CSXI has failed to
satisfy the Network Service Standard 80% of the time on average as to a given
O/D Pair or the Premium O/D Service Standard 90% of the time on average as to a
given O/D Pair over any three calendar month period on average, (b) CSXI, over
the next two calendar month period, fails to satisfy the Network Service
Standard 80% or the Premium O/D Service Standard 90% of the time on average as
to a given O/D Pair for a one calendar month period, and (c) APL/LTS can
demonstrate material harm or loss of business as a result of CSXI's failure to
meet the Network or Premium O/D Service Standards for the affected O/D Pair,
APL/LTS may be eligible to collect liquidated damages as set forth in Section
10.4 of this Appendix 10.
10.4 Liquidated Damages. If, in any month after satisfaction of the
conditions in Section 10.3 of this Appendix 10, and subject to the waiver and
termination provisions of Section 10.5 of this Appendix 10, CSXI meets the
Network Service Standard more than 70% but less than 80% of the time on average
with respect to a given O/D Pair or meets the Premium O/D Service Standard more
than 80% but less than 90% on average with respect to a given O/D Pair,
App. -40- Confidental
CSXI shall pay APL/LTS $25 multiplied by the difference between the number of
Containers that met the Network Service Standard or the Premium O/D Service
Standard for that month and 80% of the total number of Containers subject to the
Network Service Standard during that month or 90% of the total number of
Containers subject to the Premium O/D Service Standard during that month,
respectively. Alternatively, if, in any month after satisfaction of the
conditions in Section 10.3 of this Appendix 10, and subject to the waiver and
termination provisions of Section 10.5 of this Appendix 10, CSXI meets the
Network Service Standard 70% of the time on average or less with respect to a
given O/D Pair, or meets the Premium O/D Service Standard 80% of the time on
average or less with respect to a given O/D Pair, CSXI shall pay APL/LTS $50
multiplied by the difference between the number of Containers that met the
Network Service Standard or the Premium O/D Service Standard for that month and
80% of the total number of Containers subject to the Network Service that month
or 90% of the total number of Containers subject to the Premium O/D Service
Standard that month, respectively. For example, if from Chicago to Kearny, which
was designated as a Premium O/D Pair in a period for which LTS was eligible to
receive liquidated damages under Section 10.3 of this Appendix 10, CSXI meets
the scheduled availability time for 150,000 Containers out of total monthly
volume of 175,000 Containers resulting in its meeting the Premium O/D Service
Standard 86% of the time, CSXI would owe liquidated damages of $187,500 ($25 x
7,500, the difference between 157,500 (90% of 175,000) and 150,000 Containers,
the number of Containers which met the Service Standard).
10.5 Termination of Damages. If, after satisfaction of the conditions
in Section 10.3 of this Appendix 10, CSXI complies with the applicable service
standard with respect to that O/D Pair over a two calendar month period, its
liability for liquidated damages under Section 10.4 of this Appendix 10 will
terminate. If CSXI is able to do so within three calendar months after
satisfaction of the conditions in Section 10.3 of this Appendix 10, CSXI will
not owe any liquidated damages to APL/LTS with respect to that service failure.
10.6 Timing of Payments. Any liquidated damages due with respect to
the first three (3) calendar months after the conditions of Section 10.3 of this
Appendix 10 have been satisfied with respect to a given O/D Pair shall be paid
within fifteen (15) days after the end of the third month. Thereafter, all such
damages shall be paid within fifteen (15) days after the month in which they
accrue. CSXI will pay LTS the liquidated damages due under this Appendix 10. LTS
shall be responsible for allocating a portion of the liquidated damages to APL
in accordance with a methodology agreed to by APL and LTS.
10.7 Exclusions from Network or Premium O/D Service Standards.
10.7.1 General. Subject to Section 10.7.2 and 10.7.3 of this
Appendix 10, any Equipment that is delayed due to force majeure
conditions as described in Article 16, bad-order cars not originated by
CSXI on its Core Network, conditions not caused by CSXI, including but
not limited to, late deliveries on interchange traffic to CSXI or
failure to make cut-off times, or any actions by or conditions caused
by APL or LTS, including but not limited to, lack of APL or LTS
Chassis, bad-order Chassis, late ship, lack of proper or complete
documentation, Terminal congestion caused by acts or omissions of APL
or LTS, APL's or LTS' failure to meet applicable cutoff or interchange
times, and
App. -41- Confidential
instructions from APL or LTS to CSXI such as extending gate cut-offs or
requesting hold-outs of trains or set-outs or pick-ups en route, shall
not be considered in calculating the applicable Service Standards.
10.7.2 Eastbound Exclusions. For originating traffic moving
eastbound, any Container which makes the cutoff at the ingate shall be
counted as meeting the applicable Service Standard if it meets the
scheduled availability time. If the Container misses the cutoff but
makes the scheduled train, it shall be counted as meeting the
applicable Service Standard if it meets the scheduled availability
time; however, if it does not make the scheduled availability time, it
shall not be counted.
10.7.3 Westbound Exclusions. For interchange traffic moving
westbound, any Container which is ingated to CSXI before the cutoff
shall be counted as meeting the performance standard if it meets the
scheduled interchange time. If the Container is ingated after the
cutoff but makes the scheduled train, it shall be counted as meeting
the applicable Service Standard if it meets the scheduled interchange
time; however, if it does not make the scheduled interchange time, it
shall not be counted.
10.7.4 Dedicated Trains. Late eastbound Dedicated Trains
received in interchange arriving within one (1) hour of schedule will
be counted in determining whether CSXI has met the Network Service
Standard; however, these trains shall have an additional one (1) hour
of time added to their scheduled Container availability time at
destination.
10.7.5 Continuing Efforts. If a Container is excluded from
measurement of the Network or Premium O/D Service Standard, CSXI will
still use all reasonable efforts to transport the Container on a timely
basis and at the hourly transit time set forth in the applicable train
schedule.
10.8 Diversion for Service Failure.
10.8.1 Right to Divert for Service Failure. If, during any
three (3) months within a six (6) consecutive month period after CSXI
has been required to pay liquidated damages, CSXI does not meet the
Network Service Standard more than 70% of the time on average with
respect to an O/D Pair where CSXI is obligated to pay liquidated
damages or does not meet the Premium O/D Service Standard more than 80%
of the time on average with respect to an O/D Pair where CSXI is
obligated to pay liquidated damages, APL or LTS shall have the right to
divert affected traffic between such O/D Pair, in whole or in part, to
other carriers, and the volume commitments shall be adjusted as to that
O/D Pair.
10.8.2 Termination of Diversion. If CSXI restores its service
with respect to an O/D Pair in which the volume commitment has been
adjusted in accordance with Section 10.8.1 of this Appendix 10 to the
Network Service Standard 80% or the Premium O/D Service Standard 90% of
the time on average over a three calendar month period, then the volume
commitments shall be reinstated as to that O/D Pair. If, however, APL's
and
App. -42- Confidential
LTS' movements between that O/D Pair are contractually committed to
another transportation provider, the volume commitments set forth in
Appendix 5.2 shall not apply until APL's and LTS' first opportunity to
terminate its contractual commitments to other providers with respect
to that O/D Pair. If (a) CSXI has, during any four (4) months within
the six (6) consecutive month period immediately prior to APL's or LTS'
first contractual opportunity to terminate its commitment to another
provider, met the Network Service Standard 80% of the time on average
for that O/D Pair or met the Premium O/D Service Standard 90% of the
time on average for that O/D Pair and (b) CSXI operates or will commit
to operate train schedules for that O/D Pair that are market
competitive, then upon APL's or LTS' first contractual opportunity,
APL's and LTS' Movements between that O/D Pair will be subject to the
volume commitments in Appendix 5.2.
10.9 Exclusive Remedies for Service Failures. APL's and LTS' sole and
exclusive remedies for CSXI's service failure shall be to receive the liquidated
damages payment set forth in Section 10.4 of this Appendix 10 and to divert its
volume in accordance with Section 10.8 of this Appendix 10.
10.10 Semi Annual Service Review. The parties will participate in
semi-annual service reviews in order to support measurement, analysis, and
corrective action.
App. -43- Confidential
APPENDIX 14.1
CSXI'S LIABILITY FOR CARGO
CSXI's liability for loss, damage, destruction or delay to cargo shall
be governed by the terms of Directory No. 1 as modified herein and in effect on
the date of such loss, damage, destruction or delay; provided however that the
maximum liability limit will be $250,000 per Container. CSXI will be liable for
up to $250,000 per Container regardless of any more restrictive limitations of
liability imposed by CSXT. CSXI shall not be liable for any loss, damage or
destruction to cargo requiring protection from heat or cold caused by failure of
the temperature controlled Container or protective services or for any
maintenance, inspection, refueling, or other protective services involving such
Containers.
App. -44- Confidential
APPENDIX 14.3
CLAIMS BY SHIPPING CUSTOMERS
CSXI will allow APL's/LTS' shipping customers to submit cargo and
Equipment claims directly to CSXI for resolution pursuant to this Agreement. All
limitations of liability and other claims procedures and principles that apply
to APL or LTS under this Agreement shall also apply to any customer or other
person or entity claiming through APL or LTS.
App. -45- Confidential
APPENDIX 17.4
INTERNAL DISCIPLINE
CSXI shall not allow any of its employees who are setting rates for
CSXI's customers for its Transcontinental Domestic transportation products
(including EMP and NACS) to have access to APL or LTS rate and comparison
information under this Agreement. CSXI shall also protect APL and LTS'
Confidential Information from disclosure to its Affiliate, Sea-Land Service,
Inc.
App. -46- Confidential
APPENDIX 21.1.3
TRANSFERS OR ASSIGNMENTS TO RAILROAD
If CSXI grants its approval to a merger, sale of all or substantially
all business and assets, a reorganization, a consolidation or other change in
control of APL or LTS pursuant to which the successor-in-interest or surviving
entity is a railroad or an Affiliate thereof and if the successor-in-interest or
surviving entity is a railroad or an Affiliate of a railroad with a significant
rail network in the western United States, Section 9.3 of Appendix 9 and
Exhibits 9.3 and 9.3.2 shall be void and of no further force and effect as to
that party upon closing of the merger, sale, reorganization, consolidation or
other change in control.
App. -47- Confidential
APPENDIX 23.1.2
MATTERS SUBJECT TO CSXI'S AUDIT
CSXI shall have the right, at its own cost and expense, to cause an
independent auditor to audit APL's and LTS' books and records to confirm
compliance with the volume commitments set forth in Appendix 5.2, the
calculation of APL/LTS per Container costs as a result of the implementation of
the Combined Terminal under Sections 6.3 and 6.4 of Appendix 6, the accuracy of
LTS' RPU change information provided under Section 8.3 of Appendix 8, the
adjustment of rates under Appendix 8, the application of the methodologies under
Appendix 9, and proper application of rate applicability restrictions set forth
in this Agreement.
App. -48- Confidential
APPENDIX 23.2.2
MATTERS SUBJECT TO APL/LTS AUDIT
APL/LTS shall have the right, at its own cost and expense, to cause an
independent auditor to perform an audit of CSXI's books and records solely for
the purposes of verifying the adjustment of rates under Article 8 of this
Agreement, the application of the methodologies under Article 9 of this
Agreement, and compliance with the service standards under Article 10 of this
Agreement.
App. -49- Confidential
APPENDIX 23.3
AUDITS UNDER APPENDIX 9
Notwithstanding the provisions of Sections 23.1 and 23.2 of the
Agreement, the following provisions shall apply to audits under Section 9.3 of
Appendix 9. CSXI or APL/LTS may request audits under Section 9.3.2(a) of
Appendix 9 no more frequently than once per three month period. An audit under
Section 9.3.2(a) of Appendix 9 that is not a follow-up audit to an audit that
found a party to have a negative Zone Compliance Amount shall be at the expense
of the party requesting the audit, regardless of the findings of such audit. Any
follow-up audit to an audit that found that either the CSXI Zone Compliance
Amount or the LTS Zone Compliance Amount was negative shall be at the expense of
the party whose Zone Compliance Amount was negative. If both the CSXI Zone
Compliance Amount and the LTS Zone Compliance Amount were negative, then CSXI
and APL/LTS shall share the expense of the follow-up audit.
App. -50- Confidential
EXHIBIT 1.1.30
EASTERN STATES
Alabama
Connecticut
Delaware
Florida
Georgia
Illinois
Indiana
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Mississippi
Missouri
New Hampshire
New Jersey
New York
North Carolina
Ohio
Pennsylvania
Rhode Island
South Carolina
Tennessee
Vermont
Virginia
West Virginia
Confidential
EXHIBIT 1.1.31
EASTERN AND WESTERN ZONES
WESTERN ZONES
Western Zone 1: Pacific Northwest
Western Zone 2: Middle California
Western Zone 3: Southern California
EASTERN ZONES
Eastern Zone 1: Boston, Massachusetts; Worcester, Massachusetts, Springfield,
Massachusetts; Syracuse, New York; Buffalo, New York
Eastern Zone 2: Terminals in northern New Jersey and the New York City
metropolitan area
Eastern Zone 3: Philadelphia, Pennsylvania; Harrisburg, Pennsylvania;
Baltimore, Maryland
Eastern Zone 4: Terminals in the Atlanta, Georgia area
Eastern Zone 5: Jacksonville, Florida; Savannah, Georgia; Charleston, South
Carolina; Charlotte, North Carolina; Nashville, Tennessee;
Miami, Florida; Tampa, Florida; Orlando, Florida; Mobile,
Alabama
Confidential
EXHIBIT 1.1.37
EXISTING LESS-THAN-TRUCKLOAD SHIPPERS
CF Motor Freight
Washington Oregon Shippers Cooperative Association
Interstate Consolidation Inc.
XX Xxxxxxxx Inc.
Clipper Exxpress Inc.
Eastern American Transport Inc.
Roadway Express Inc.
Confidential
EXHIBIT 1.1.38
EXISTING TPI CUSTOMERS
(as of the Effective Date)
Australia New Zealand Direct Lines
Bermuda Container Line
Centennial Express Corp.
Xxxxxxx Lines
Fleet Shipping Lines
Hapag Xxxxx
Hub City HLX
Xxxxxx Navigation
P&O Container Lines
Transamerica Steamship
Westwood Shipping Lines
Confidential
EXHIBIT 1.1.62
PREMIUM O/D PAIRS
Chicago, Illinois to Baltimore, Maryland
Baltimore, Maryland to Chicago, Illinois
Chicago, Illinois to South Kearny, NJ
South Kearny, NJ to Chicago, Illinois
Atlanta, Georgia to Memphis, Tennessee
Memphis, Tennessee to Atlanta, Georgia
Atlanta, Georgia to New Orleans, Louisiana
New Orleans, Louisiana to Atlanta, Georgia
Confidential
EXHIBIT 4.1.1
LINEHAUL RATES FOR APL'S MOVEMENTS
IN TRANSCONTINENTAL INTERNATIONAL SERVICE
(as of the Effective Date)
Confidential
EXHIBIT
EXPLANATION OF NOTES AND ABBREVIATIONS
HPL - Hapag Xxxxx
XX - Xxxx Wesson
IHF - International Home Foods
IP - International Paper
MAT - Matson
MSC - Mediterranean Shipping Lines
NAB - Nabisco
P&O - P&O
WM - Wal Mart
WWD - Westwood
(C) - Indicates mixed mode rate wherein service is a combination of
stack plus conventional
(S) - Indicates rate based on stack service from origin to destination
(S1) - Indicates sub service adjusted rate for actual origin/destination
of Allentown
(S2) - Indicates sub service adjusted rate for actual origin/destination
of Greensboro
(S3) - Indicates sub service adjusted rate for actual origin/destination
of Harrisburg
(S4) - Indicates sub service adjusted rate for actual origin/destination
of Norfolk
(X) - Refers to rates on shipments interchanged by railroad to or from a
connecting rail carrier.
(R) - Rate applies only for domestic loaded reefer moves.
(1) Rates from CSX Agreement 5032, Plan 800
(2) Rates from CSX Directory 8, Plan 800
(3) Rates from CSX proposal dated 5/14/98, Plan 800
(4) Rates from NS8407
(5) Rates from CSX Agreement 5032, Plan 810
(6) Rates from CSX proposal dated 5/14/98, Plan 810
(7) Rates from CSX Directory 8, Plan 810
APINY - APL's Intermodal facility located in South Kearny Morrisville - Rates
to/fm Morrisville are shown to/fm Philadelphia
CSX
Confidential
EXHIBIT 4.1.2
LINEHAUL RATES FOR APL'S OR LTS' MOVEMENTS
OF APL OR LTS CONTAINERS
IN TRANSCONTINENTAL DOMESTIC SERVICE
(as of the Effective Date)
Confidential
--------------------------------------------------------------------------------
EXHIBIT 4.1.2
LINEHAUL RATES FOR APL'S MOVEMENTS
OF APL OR LTS CONTAINERS IN TRANSCONTINENTAL DOMESTIC SERVICE
------------------------------------------------------------------------------------------------------------
ORIGIN DESTINATION NOTES 20' 40' 45' 48' 53'
------------------------------------------------------------------------------------------------------------
LOADED RATES
------------------------------------------------------------------------------------------------------------
Atlanta Chicago 246 365 365 365 379
--------------------------------------------------------------------------------------
Memphis (X) 149 241 241 238 266
------------------------------------------------------------------
NAB -- -- -- 208 236
--------------------------------------------------------------------------------------
New Orleans (X) 149 241 241 238 266
------------------------------------------------------------------
NAB -- -- -- 208 236
------------------------------------------------------------------------------------------------------------
Baltimore Chicago (S3) 130 130 130 130 130
------------------------------------------------------------------
304 304 304 215 215
------------------------------------------------------------------------------------------------------------
Boston Chicago 385 466 466 461 461
------------------------------------------------------------------------------------------------------------
Charleston Chicago 396 646 646 689 --
--------------------------------------------------------------------------------------
Memphis (X) (C) 292 433 433 555 --
--------------------------------------------------------------------------------------
Memphis (X) (S) 268 356 356 458 --
--------------------------------------------------------------------------------------
New Orleans (X) (C) 292 433 433 555 --
--------------------------------------------------------------------------------------
New Orleans (X) (S) 268 356 356 458 --
------------------------------------------------------------------------------------------------------------
Charlotte Chicago (S2) 398 612 612 661 --
------------------------------------------------------------------
404 637 637 661 685
--------------------------------------------------------------------------------------
Memphis (X) (C) 285 438 438 519 552
--------------------------------------------------------------------------------------
Memphis (X) (S) 245 371 371 399 455
--------------------------------------------------------------------------------------
New Orleans (X) (C) 285 438 438 519 552
--------------------------------------------------------------------------------------
New Orleans (X) (S) 245 371 371 399 455
------------------------------------------------------------------------------------------------------------
Chicago Atlanta 255 426 426 426 438
--------------------------------------------------------------------------------------
Baltimore (S3) 335 335 335 335 335
------------------------------------------------------------------
372 534 534 542 542
------------------------------------------------------------------
IHF (S3) -- -- -- 250 250
--------------------------------------------------------------------------------------
Boston 551 827 827 836 836
--------------------------------------------------------------------------------------
Buffalo 208 305 305 319 378
--------------------------------------------------------------------------------------
Charleston 408 664 664 706 --
--------------------------------------------------------------------------------------
Charlotte (S2) 397 636 636 680 704
------------------------------------------------------------------
414 648 648 680 704
--------------------------------------------------------------------------------------
Columbus 221 266 266 257 257
--------------------------------------------------------------------------------------
Jacksonville 425 682 682 685 685
--------------------------------------------------------------------------------------
Kearny 275 524 524 546 546
--------------------------------------------------------------------------------------
Miami 583 940 940 1060 --
--------------------------------------------------------------------------------------
Philadelphia (S1) 513 514 514 527 527
------------------------------------------------------------------
513 608 608 608 608
--------------------------------------------------------------------------------------
Portsmouth (S4) 395 515 515 570 630
--------------------------------------------------------------------------------------
Savannah 407 659 659 682 --
--------------------------------------------------------------------------------------
Springfield 744 744 744 744 744
--------------------------------------------------------------------------------------
Syracuse 557 557 557 539 539
--------------------------------------------------------------------------------------
Waterville 630 630 630 630 630
--------------------------------------------------------------------------------------
Worcester 773 773 773 837 837
------------------------------------------------------------------------------------------------------------
Cleveland Chicago 181 251 251 238 238
------------------------------------------------------------------------------------------------------------
Columbus Chicago 150 223 223 238 238
------------------------------------------------------------------------------------------------------------
Jacksonville Chicago 410 588 588 588 --
--------------------------------------------------------------------------------------
Memphis (X) (C) 307 406 406 562 610
--------------------------------------------------------------------------------------
Memphis (X) (S) 255 322 322 437 --
--------------------------------------------------------------------------------------
New Orleans (X) (C) 307 406 406 562 610
--------------------------------------------------------------------------------------
New Orleans (X) (S) 255 322 322 437 --
------------------------------------------------------------------------------------------------------------
Confidential
--------------------------------------------------------------------------------
EXHIBIT 4.1.2
LINEHAUL RATES FOR APL'S MOVEMENTS
OF APL OR LTS CONTAINERS IN TRANSCONTINENTAL DOMESTIC SERVICE
-----------------------------------------------------------------------------------------------------------------------
ORIGIN DESTINATION NOTES 20' 40' 45' 48' 53'
-----------------------------------------------------------------------------------------------------------------------
LOADED RATES
-----------------------------------------------------------------------------------------------------------------------
Kearny Chicago 194 310 310 336 336
-----------------------------------------------------------------------------------------------------------------------
Memphis (X) Atlanta 152 262 262 260 261
-------------------------------------------------------------------------------------------------
HW -- -- 242 240 --
---------------------------------------------------------------------------
NAB -- -- -- 230 231
---------------------------------------------------------------------------
WM -- 235 235 216 210
-------------------------------------------------------------------------------------------------
Charleston (S) 253 390 390 455 --
---------------------------------------------------------------------------
(C) 293 484 484 529 551
-------------------------------------------------------------------------------------------------
Charlotte (S) 258 343 343 357 376
---------------------------------------------------------------------------
(C) 301 460 460 485 503
---------------------------------------------------------------------------
HW -- -- 323 337 --
---------------------------------------------------------------------------
WM -- 306 306 337 311
-------------------------------------------------------------------------------------------------
Jacksonville (S) 255 370 370 398 399
---------------------------------------------------------------------------
(C) 309 445 445 545 569
---------------------------------------------------------------------------
HW -- -- 350 378 --
-------------------------------------------------------------------------------------------------
Miami (S) 399 620 620 667 --
---------------------------------------------------------------------------
(C) 470 752 752 879 --
-------------------------------------------------------------------------------------------------
Savannah 243 376 376 419 482
-----------------------------------------------------------------------------------------------------------------------
New Orleans Atlanta 152 262 262 260 261
---------------------------------------------------------------------------
HW -- -- 242 240 --
---------------------------------------------------------------------------
NAB -- -- -- 230 231
---------------------------------------------------------------------------
WM -- 235 235 216 210
-------------------------------------------------------------------------------------------------
Charleston (S) 253 390 390 455 --
---------------------------------------------------------------------------
(C) 293 484 484 529 551
-------------------------------------------------------------------------------------------------
Charlotte (S) 258 343 343 357 376
---------------------------------------------------------------------------
(C) 301 460 460 485 503
---------------------------------------------------------------------------
HW -- -- 323 337 --
---------------------------------------------------------------------------
WM -- 306 306 337 311
-------------------------------------------------------------------------------------------------
Jacksonville (S) 255 370 370 398 399
---------------------------------------------------------------------------
(C) 309 445 445 545 569
---------------------------------------------------------------------------
HW -- -- 350 378 --
-------------------------------------------------------------------------------------------------
Miami (S) 399 620 620 667 --
---------------------------------------------------------------------------
(C) 470 752 752 879 --
-------------------------------------------------------------------------------------------------
Savannah 243 376 376 419 000
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxxxxxxx Xxxxxxx (X0) 245 245 245 186 186
---------------------------------------------------------------------------
295 295 295 295 295
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxxxxx Xxxxxxx (X0) 395 515 515 535 630
-----------------------------------------------------------------------------------------------------------------------
Savannah Chicago 395 641 641 663 --
-------------------------------------------------------------------------------------------------
Memphis (X) (C) 291 461 461 541 --
-------------------------------------------------------------------------------------------------
Memphis (X) (S) 247 372 372 435 --
-------------------------------------------------------------------------------------------------
New Orleans (X) (C) 291 461 461 541 --
-------------------------------------------------------------------------------------------------
New Orleans (X) (S) 247 372 372 435 --
-----------------------------------------------------------------------------------------------------------------------
Springfield Chicago 419 419 419 419 419
-----------------------------------------------------------------------------------------------------------------------
St. Xxxxx Xxxxxxxx 222 308 308 308 308
-----------------------------------------------------------------------------------------------------------------------
Syracuse Chicago 291 424 291 291 291
---------------------------------------------------------------------------
IP 221 361 221 221 221
-----------------------------------------------------------------------------------------------------------------------
Waterville Chicago 525 525 525 525 525
-----------------------------------------------------------------------------------------------------------------------
Worcester Chicago 360 360 360 296 296
-----------------------------------------------------------------------------------------------------------------------
4.1.2 APL and LTS Transcontinental Domestic Movements. The rates in this Exhibit
4.1.2 apply to APL or LTS Movements of Containers (excluding temperature
controlled and tank Containers) owned or leased by APL or its Affiliates or
Containers owned or leased by LTS or its Affiliates in Transcontinental Domestic
Service for the O/D Pairs listed herein.
--------------------------------------------------------------------------------
Confidential
--------------------------------------------------------------------------------
EXHIBIT 4.1.2
LINEHAUL RATES FOR APL'S MOVEMENTS
OF APL OR LTS CONTAINERS IN TRANSCONTINENTAL DOMESTIC SERVICE
-----------------------------------------------------------------------------------------------------------------------
ORIGIN DESTINATION NOTES 20' 40' 45' 48' 53'
-----------------------------------------------------------------------------------------------------------------------
EMPTY RATES
-----------------------------------------------------------------------------------------------------------------------
Atlanta Chicago -- -- -- 333 333
-----------------------------------------------------------------------------------------------------
Memphis (X) -- -- -- 199 199
-----------------------------------------------------------------------------------------------------
New Orleans (X) -- -- -- 199 199
-----------------------------------------------------------------------------------------------------------------------
Baltimore Chicago -- -- -- 187 187
-----------------------------------------------------------------------------------------------------
St. Louis -- -- -- 196 196
-----------------------------------------------------------------------------------------------------------------------
Boston Chicago -- -- -- 206 206
-----------------------------------------------------------------------------------------------------
St. Louis -- -- -- 227 227
-----------------------------------------------------------------------------------------------------------------------
Buffalo Chicago -- -- -- 240 213
-----------------------------------------------------------------------------------------------------------------------
Charleston Chicago -- -- -- 448 448
-----------------------------------------------------------------------------------------------------
Memphis (X) -- -- -- 296 296
-----------------------------------------------------------------------------------------------------
New Orleans (X) -- -- -- 296 296
-----------------------------------------------------------------------------------------------------------------------
Charlotte Chicago -- -- -- 360 360
-----------------------------------------------------------------------------------------------------
Memphis (X) -- -- -- 200 200
-----------------------------------------------------------------------------------------------------
New Orleans (X) -- -- -- 200 200
-----------------------------------------------------------------------------------------------------------------------
Cleveland Chicago -- -- -- 193 193
-----------------------------------------------------------------------------------------------------------------------
Columbus Chicago -- -- -- 157 157
-----------------------------------------------------------------------------------------------------
Worcester -- -- -- 164 164
-----------------------------------------------------------------------------------------------------------------------
Jacksonville Chicago -- -- -- 370 370
-----------------------------------------------------------------------------------------------------
Memphis (X) -- -- -- 250 250
-----------------------------------------------------------------------------------------------------
New Orleans (X) -- -- -- 250 250
-----------------------------------------------------------------------------------------------------------------------
Kearny Chicago -- -- -- 119 119
-----------------------------------------------------------------------------------------------------
Kansas City -- -- -- 268 268
-----------------------------------------------------------------------------------------------------
St. Louis -- -- -- 170 170
-----------------------------------------------------------------------------------------------------------------------
Miami Chicago -- -- -- 452 452
-----------------------------------------------------------------------------------------------------
Memphis (X) -- -- -- 404 404
-----------------------------------------------------------------------------------------------------
New Orleans (X) -- -- -- 404 404
-----------------------------------------------------------------------------------------------------------------------
Philadelphia Chicago -- -- -- 209 209
-----------------------------------------------------------------------------------------------------
St. Louis -- -- -- 227 227
-----------------------------------------------------------------------------------------------------------------------
Portsmouth Chicago (S4) -- -- -- 239 239
-----------------------------------------------------------------------------------------------------------------------
Savannah Chicago -- -- -- 448 448
-----------------------------------------------------------------------------------------------------
Memphis (X) -- -- -- 296 296
-----------------------------------------------------------------------------------------------------
New Orleans (X) -- -- -- 296 296
-----------------------------------------------------------------------------------------------------------------------
Springfield Chicago -- -- -- 210 210
-----------------------------------------------------------------------------------------------------
St. Louis -- -- -- 227 227
-----------------------------------------------------------------------------------------------------------------------
Syracuse Chicago -- -- -- 165 165
-----------------------------------------------------------------------------------------------------
St. Louis -- -- -- 227 227
-----------------------------------------------------------------------------------------------------------------------
Waterville Chicago -- -- -- 290 290
-----------------------------------------------------------------------------------------------------------------------
Worcester Chicago -- -- -- 210 210
-----------------------------------------------------------------------------------------------------
St. Louis -- -- -- 227 227
-----------------------------------------------------------------------------------------------------------------------
4.1.2 APL and LTS Transcontinental Domestic Movements. The rates in this Exhibit
4.1.2 apply to APL or LTS Movements of Containers (excluding temperature
controlled and tank Containers) owned or leased by APL or its Affiliates or
Containers owned or leased by LTS or its Affiliates in Transcontinental Domestic
Service for the O/D Pairs listed herein.
--------------------------------------------------------------------------------
Confidential
EXHIBIT
EXPLANATION OF NOTES AND ABBREVIATIONS
HPL - Hapag Xxxxx
XX - Xxxx Wesson
IHF - International Home Foods
IP - International Paper
MAT - Matson
MSC - Mediterranean Shipping Lines
NAB - Nabisco
P&O - P&O
WM - Wal Mart
WWD - Westwood
(C) - Indicates mixed mode rate wherein service is a combination of
stack plus conventional
(S) - Indicates rate based on stack service from origin to
destination
(S1) - Indicates sub service adjusted rate for actual origin/
destination of Allentown
(S2) - Indicates sub service adjusted rate for actual origin/
destination of Greensboro
(S3) - Indicates sub service adjusted rate for actual origin/
destination of Harrisburg
(S4) - Indicates sub service adjusted rate for actual origin/
destination of Norfolk
(X) - Refers to rates on shipments interchanged by railroad to or from
a connecting rail carrier.
(R) - Rate applies only for domestic loaded reefer moves.
(1) Rates from CSX Agreement 5032, Plan 800
(2) Rates from CSX Directory 8, Plan 800
(3) Rates from CSX proposal dated 5/14/98, Plan 800
(4) Rates from NS8407
(5) Rates from CSX Agreement 5032, Plan 810
(6) Rates from CSX proposal dated 5/14/98, Plan 810
(7) Rates from CSX Directory 8, Plan 810
APINY - APL's Intermodal facility located in South Kearny
Morrisville - Rates to/fm Morrisville are shown to/fm Philadelphia
CSX
Confidential
EXHIBIT 4.1.3
LINEHAUL RATES FOR EXISTING TPI CUSTOMERS
(as of the Effective Date)
Confidential
--------------------------------------------------------------------------------
EXHIBIT 4.1.3
LINEHAUL RATES FOR EXISTING
TPI CUSTOMERS
--------------------------------------------------------------------------------------------------------------------
ORIGIN DESTINATION NOTES 20' 40' 45' 48' 53'
--------------------------------------------------------------------------------------------------------------------
LOADED RATES
--------------------------------------------------------------------------------------------------------------------
Atlanta Chicago 259 384 384 -- --
----------------------------------------------------------------------------------------------
Memphis (X) 157 254 254 -- --
----------------------------------------------------------------------------------------------
New Orleans (X) 157 254 254 -- --
--------------------------------------------------------------------------------------------------------------------
Baltimore Chicago (S3) 412 433 433 -- --
------------------------------------------------------------------------
MAT 372 442 442 -- --
------------------------------------------------------------------------
MSC 354 368 368 -- --
------------------------------------------------------------------------
MSC (S3) 153 280 280 -- --
------------------------------------------------------------------------
412 483 483 -- --
--------------------------------------------------------------------------------------------------------------------
Boston Chicago MSC 470 727 727 -- --
------------------------------------------------------------------------
494 739 739 -- --
--------------------------------------------------------------------------------------------------------------------
Charleston Chicago 417 680 680 -- --
----------------------------------------------------------------------------------------------
Memphis (X) (C) 307 456 584 -- --
----------------------------------------------------------------------------------------------
Memphis (X) (S) 282 375 375 -- --
----------------------------------------------------------------------------------------------
New Orleans (X) (C) 307 456 584 -- --
----------------------------------------------------------------------------------------------
New Orleans (X) (S) 282 375 375 -- --
--------------------------------------------------------------------------------------------------------------------
Charlotte Chicago (S2) 398 612 612 -- --
------------------------------------------------------------------------
425 671 671 -- --
----------------------------------------------------------------------------------------------
Memphis (X) (C) 300 461 461 -- --
----------------------------------------------------------------------------------------------
Memphis (X) (S) 258 391 391 -- --
----------------------------------------------------------------------------------------------
New Orleans (X) (C) 300 461 461 -- --
----------------------------------------------------------------------------------------------
New Orleans (X) (S) 258 391 391 -- --
--------------------------------------------------------------------------------------------------------------------
Chicago Atlanta 268 448 448 -- --
----------------------------------------------------------------------------------------------
Baltimore (S3) 455 542 542 -- --
------------------------------------------------------------------------
MAT 372 556 556 -- --
------------------------------------------------------------------------
MSC 387 571 571 -- --
------------------------------------------------------------------------
MSC (S3) 228 471 471 -- --
------------------------------------------------------------------------
455 590 590 -- --
----------------------------------------------------------------------------------------------
Boston MSC 542 841 841 -- --
------------------------------------------------------------------------
635 960 960 -- --
----------------------------------------------------------------------------------------------
Buffalo (S) 219 321 321 -- --
----------------------------------------------------------------------------------------------
Buffalo (C) 238 338 338 -- --
----------------------------------------------------------------------------------------------
Charleston 429 699 699 -- --
----------------------------------------------------------------------------------------------
Charlotte (S2) 397 636 636 -- --
------------------------------------------------------------------------
436 682 682 -- --
----------------------------------------------------------------------------------------------
Cincinnati (4) 210 395 395 -- --
----------------------------------------------------------------------------------------------
Cleveland 264 304 271 -- --
----------------------------------------------------------------------------------------------
Columbus 233 280 280 -- --
----------------------------------------------------------------------------------------------
Jacksonville 447 718 718 -- --
----------------------------------------------------------------------------------------------
Kearny HPL 346 574 574 -- --
------------------------------------------------------------------------
MAT 415 594 594 -- --
------------------------------------------------------------------------
MSC 351 540 540 -- --
------------------------------------------------------------------------
P&O 366 594 594 -- --
------------------------------------------------------------------------
WWD 358 616 616 -- --
------------------------------------------------------------------------
415 679 679 -- --
----------------------------------------------------------------------------------------------
Miami 614 989 989 -- --
----------------------------------------------------------------------------------------------
Philadelphia (S1) 559 559 559 -- --
------------------------------------------------------------------------
MSC 442 592 592 -- --
------------------------------------------------------------------------
563 663 663 -- --
----------------------------------------------------------------------------------------------
Portsmouth (S4) 395 515 515 -- --
----------------------------------------------------------------------------------------------
Confidential
--------------------------------------------------------------------------------
EXHIBIT 4.1.3
LINEHAUL RATES FOR EXISTING
TPI CUSTOMERS
--------------------------------------------------------------------------------------------------------------------
ORIGIN DESTINATION NOTES 20' 40' 45' 48' 53'
--------------------------------------------------------------------------------------------------------------------
LOADED RATES
--------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Savannah 428 694 694 -- --
----------------------------------------------------------------------------------------------
Springfield MSC 829 829 829 -- --
------------------------------------------------------------------------
834 834 834 -- --
----------------------------------------------------------------------------------------------
Syracuse MSC 359 480 480 -- --
------------------------------------------------------------------------
633 633 633 -- --
--------------------------------------------------------------------------------------------------------------------
Confidential
-------------------------------------------------------------------------------
EXHIBIT 4.1.3
LINEHAUL RATES FOR EXISTING
TPI CUSTOMERS
----------------------------------------------------------------------------------------------------------------------
ORIGIN DESTINATION NOTES 20' 40' 45' 48' 53'
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
LOADED RATES
----------------------------------------------------------------------------------------------------------------------
Chicago Worchester MSC 829 829 829 -- --
--------------------------------------------------------------------------
900 900 900 -- --
------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Cincinnati Chicago (4) 189 347 347 -- --
----------------------------------------------------------------------------------------------------------------------
Cleveland Chicago 190 264 264 -- --
----------------------------------------------------------------------------------------------------------------------
Columbus Chicago 158 235 235 -- --
----------------------------------------------------------------------------------------------------------------------
Jacksonville Chicago 432 619 619 -- --
------------------------------------------------------------------------------------------------
Memphis (X) (C) 323 427 427 -- --
------------------------------------------------------------------------------------------------
Memphis (X) (S) 268 339 339 -- --
------------------------------------------------------------------------------------------------
New Orleans (X) (C) 323 427 427 -- --
------------------------------------------------------------------------------------------------
New Orleans (X) (S) 268 339 339 -- --
----------------------------------------------------------------------------------------------------------------------
Kearny Chicago HPL 269 343 343 -- --
--------------------------------------------------------------------------
MAT 269 343 343 -- --
--------------------------------------------------------------------------
MSC 218 340 340 -- --
--------------------------------------------------------------------------
P&O 269 343 343 -- --
--------------------------------------------------------------------------
350 425 425 -- --
----------------------------------------------------------------------------------------------------------------------
Memphis (X) Atlanta 160 276 276 -- --
------------------------------------------------------------------------------------------------
Charleston (C) 308 509 509 -- --
------------------------------------------------------------------------------------------------
Charleston (S) 266 411 411 -- --
------------------------------------------------------------------------------------------------
Charlotte (C) 317 484 484 -- --
------------------------------------------------------------------------------------------------
Charlotte (S) 272 361 361 -- --
------------------------------------------------------------------------------------------------
Jacksonville (C) 325 468 468 -- --
------------------------------------------------------------------------------------------------
Jacksonville (S) 268 389 389 -- --
------------------------------------------------------------------------------------------------
Miami (C) 495 792 792 -- --
------------------------------------------------------------------------------------------------
Miami (S) 420 653 653 -- --
------------------------------------------------------------------------------------------------
Savannah (C) 307 472 472 -- --
------------------------------------------------------------------------------------------------
Savannah (S) 256 396 396 -- --
----------------------------------------------------------------------------------------------------------------------
New Orleans (X) Atlanta 160 276 276 -- --
------------------------------------------------------------------------------------------------
Charleston (C) 308 509 509 -- --
------------------------------------------------------------------------------------------------
Charleston (S) 266 411 411 -- --
------------------------------------------------------------------------------------------------
Charlotte (C) 317 484 484 -- --
------------------------------------------------------------------------------------------------
Charlotte (S) 272 361 361 -- --
------------------------------------------------------------------------------------------------
Jacksonville (C) 325 468 468 -- --
------------------------------------------------------------------------------------------------
Jacksonville (S) 268 389 389 -- --
------------------------------------------------------------------------------------------------
Miami (C) 495 792 792 -- --
------------------------------------------------------------------------------------------------
Miami (S) 420 653 653 -- --
------------------------------------------------------------------------------------------------
Savannah (C) 307 472 472 -- --
------------------------------------------------------------------------------------------------
Savannah (S) 256 396 396 -- --
----------------------------------------------------------------------------------------------------------------------
Philadelphia Chicago (S1) 345 345 345 -- --
--------------------------------------------------------------------------
MSC 354 374 374 -- --
--------------------------------------------------------------------------
MSC (S1) 340 340 340 -- --
--------------------------------------------------------------------------
426 512 512 -- --
----------------------------------------------------------------------------------------------------------------------
Xxxxxxxxxx Xxxxxxx (X0) 395 515 515 -- --
----------------------------------------------------------------------------------------------------------------------
Savannah Chicago 416 675 675 -- --
------------------------------------------------------------------------------------------------
Memphis (X) 260 392 392 -- --
------------------------------------------------------------------------------------------------
New Orleans (X) 260 392 392 -- --
----------------------------------------------------------------------------------------------------------------------
Springfield Chicago 691 691 691 -- --
----------------------------------------------------------------------------------------------------------------------
Confidential
-------------------------------------------------------------------------------
EXHIBIT 4.1.3
LINEHAUL RATES FOR EXISTING
TPI CUSTOMERS
----------------------------------------------------------------------------------------------------------------------
ORIGIN DESTINATION NOTES 20' 40' 45' 48' 53'
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
LOADED RATES
----------------------------------------------------------------------------------------------------------------------
Syracuse Chicago MSC 340 430 430 -- --
----------------------------------------------------------------------------------------------------------------------
585 585 585 -- --
----------------------------------------------------------------------------------------------------------------------
Worcester Chicago MSC 706 706 706 -- --
--------------------------------------------------------------------------
769 769 769 -- --
----------------------------------------------------------------------------------------------------------------------
4.1.3 TPI Movements. The rates in this Exhibit 4.1.3 shall apply to APL or LTS
Movements of Containers (including but not limited to temperature controlled,
flat racks and tank Containers) owned or leased by Existing TPI Customers in
Transcontinental International Service between the O/D Pairs listed above. If
the name of the Existing TPI Customer is specified in the notes column, then the
rate shall only apply to shipments for the benefit of that Existing TPI
Customer. If there is no Existing TPI Customer specified in the notes column,
then any Existing TPI Customer may use the rate.
-------------------------------------------------------------------------------
Confidential
-------------------------------------------------------------------------------
EXHIBIT 4.1.3
LINEHAUL RATES FOR EXISTING
TPI CUSTOMERS
----------------------------------------------------------------------------------------------------------------------
ORIGIN DESTINATION NOTES 20' 40' 45' 48' 53'
----------------------------------------------------------------------------------------------------------------------
EMPTY RATES
----------------------------------------------------------------------------------------------------------------------
Baltimore St. Louis 210 210 210 -- --
----------------------------------------------------------------------------------------------------------------------
Boston St. Louis 210 210 210 -- --
----------------------------------------------------------------------------------------------------------------------
Cleveland Chicago 190 264 264 -- --
----------------------------------------------------------------------------------------------------------------------
Columbus Chicago 135 200 200 -- --
----------------------------------------------------------------------------------------------------------------------
Kearny Chicago 173 173 173 -- --
------------------------------------------------------------------------------------------------
Columbus 126 126 126 -- --
------------------------------------------------------------------------------------------------
St. Louis 140 140 140 -- --
----------------------------------------------------------------------------------------------------------------------
Philadelphia Chicago 210 210 210 -- --
----------------------------------------------------------------------------------------------------------------------
Syracuse Chicago 209 209 209 -- --
----------------------------------------------------------------------------------------------------------------------
4.1.3 TPI Movements. The rates in this Exhibit 4.1.3 shall apply to APL or LTS
Movements of Containers (including but not limited to temperature controlled,
flat racks and tank Containers) owned or leased by Existing TPI Customers in
Transcontinental International Service between the O/D Pairs listed herein.
If the name of the Existing TPI Customer is specified in the notes column, then
the rate shall only apply to shipments for the benefit of that Existing TPI
Customer. If there is no Existing TPI Customer specified in the notes column,
then any Existing TPI Customer may use the rate.
-------------------------------------------------------------------------------
Confidential
EXHIBIT
EXPLANATION OF NOTES AND ABBREVIATIONS
HPL - Hapag Xxxxx
XX - Xxxx Wesson
IHF - International Home Foods
IP - International Paper
MAT - Matson
MSC - Mediterranean Shipping Lines
NAB - Nabisco
P&O - P&O
WM - Wal Mart
WWD - Westwood
(C) - Indicates mixed mode rate wherein service is a combination of
stack plus conventional
(S) - Indicates rate based on stack service from origin to destination
(S1) - Indicates sub service adjusted rate for actual origin/destination
of Allentown
(S2) - Indicates sub service adjusted rate for actual origin/destination
of Greensboro
(S3) - Indicates sub service adjusted rate for actual origin/destination
of Harrisburg
(S4) - Indicates sub service adjusted rate for actual origin/destination
of Norfolk
(X) - Refers to rates on shipments interchanged by railroad to or from a
connecting rail carrier.
(R) - Rate applies only for domestic loaded reefer moves.
(1) Rates from CSX Agreement 5032, Plan 800
(2) Rates from CSX Directory 8, Plan 800
(3) Rates from CSX proposal dated 5/14/98, Plan 800
(4) Rates from NS8407
(5) Rates from CSX Agreement 5032, Plan 810
(6) Rates from CSX proposal dated 5/14/98, Plan 810
(7) Rates from CSX Directory 8, Plan 810
APINY - APL's Intermodal facility located in South Kearny
Morrisville - Rates to/fm Morrisville are shown to/fm Philadelphia
CSX
Confidential
EXHIBIT 4.1.4
LINEHAUL RATES FOR TEMPERATURE CONTROLLED CONTAINERS
(as of the Effective Date)
Confidential
--------------------------------------------------------------------------------
EXHIBIT 4.1.4
LINEHAUL RATES FOR APL'S MOVEMENTS
OF TEMPERATURE CONTROLLED CONTAINERS
----------------------------------------------------------------------------------------------------------------------
ORIGIN DESTINATION NOTES 20' 40' 45' 48' 53'
----------------------------------------------------------------------------------------------------------------------
Baltimore Chicago (R) -- -- -- 302 --
--------------------------------------------------------------------------
(R)(S3) -- -- -- 133 --
----------------------------------------------------------------------------------------------------------------------
Boston Chicago (R) -- -- -- 395 --
----------------------------------------------------------------------------------------------------------------------
Chicago Baltimore (R) -- -- -- 600 --
--------------------------------------------------------------------------
(R)(S3) -- -- -- 399 --
------------------------------------------------------------------------------------------------
Boston (R) -- -- -- 792 --
------------------------------------------------------------------------------------------------
Kearny (R) -- -- -- 570 --
------------------------------------------------------------------------------------------------
Philadelphia (R) -- -- -- 639 --
--------------------------------------------------------------------------
(R)(S1) -- -- -- 477 --
------------------------------------------------------------------------------------------------
Springfield (R) -- -- -- 725 --
------------------------------------------------------------------------------------------------
Syracuse (R) -- -- -- 540 --
----------------------------------------------------------------------------------------------------------------------
Kearny Chicago (R) -- -- -- 335 --
----------------------------------------------------------------------------------------------------------------------
Philadelphia Chicago (R) -- -- -- 317 --
--------------------------------------------------------------------------
(R)(S1) -- -- -- 208 --
----------------------------------------------------------------------------------------------------------------------
Springfield Chicago (R) -- -- -- 338 --
----------------------------------------------------------------------------------------------------------------------
Syracuse Chicago (R) -- -- -- 295 --
----------------------------------------------------------------------------------------------------------------------
4.1.4 Temperature Controlled Movements. The rates in this Exhibit 4.1.4 shall
only apply to LTS Movements of temperature controlled Containers owned or leased
by third parties in Transcontinental Domestic Service between the O/D Pairs
listed herein.
--------------------------------------------------------------------------------
Confidential
EXHIBIT
EXPLANATION OF NOTES AND ABBREVIATIONS
HPL - Hapag Xxxxx
XX - Xxxx Wesson
IHF - International Home Foods
IP - International Paper
MAT - Matson
MSC - Mediterranean Shipping Lines
NAB - Nabisco
P&O - P&O
WM - Wal Mart
WWD - Westwood
(C) - Indicates mixed mode rate wherein service is a combination of
stack plus conventional
(S) - Indicates rate based on stack service from origin to destination
(S1) - Indicates sub service adjusted rate for actual origin/destination
of Allentown
(S2) - Indicates sub service adjusted rate for actual origin/destination
of Greensboro
(S3) - Indicates sub service adjusted rate for actual origin/destination
of Harrisburg
(S4) - Indicates sub service adjusted rate for actual origin/destination
of Norfolk
(X) - Refers to rates on shipments interchanged by railroad to or from a
connecting rail carrier.
(R) - Rate applies only for domestic loaded reefer moves.
(1) Rates from CSX Agreement 5032, Plan 800
(2) Rates from CSX Directory 8, Plan 800
(3) Rates from CSX proposal dated 5/14/98, Plan 800
(4) Rates from NS8407
(5) Rates from CSX Agreement 5032, Plan 810
(6) Rates from CSX proposal dated 5/14/98, Plan 810
(7) Rates from CSX Directory 8, Plan 810
APINY - APL's Intermodal facility located in South Kearny
Morrisville - Rates to/fm Morrisville are shown to/fm Philadelphia
CSX
Confidential
EXHIBIT 4.1.5
LINEHAUL RATES FOR EMPTY CONTAINERS MOVING
WITHIN THE EASTERN STATES THAT HAVE A PRIOR AND SUBSEQUENT
TRANSCONTINENTAL MOVEMENT
(as of the Effective Date)
Confidential
--------------------------------------------------------------------------------
EXHIBIT 4.1.5
LINEHAUL RATES FOR EMPTY CONTAINERS MOVING
WITHIN THE EASTERN UNITED STATES THAT HAVE A PRIOR AND SUBSEQUENT
TRANSCONTINENTAL MOVEMENT
------------------------------------------------------------------------------------------------------------
ORIGIN DESTINATION NOTES 20' 40' 45' 48' 53'
------------------------------------------------------------------------------------------------------------
Atlanta Charleston (5) 115 147 147 156 156
-----------------------------------------------------------------------------------------
Charlotte 106 124 124 124 124
-----------------------------------------------------------------------------------------
Jacksonville 60 92 92 92 92
-----------------------------------------------------------------------------------------
Miami 128 174 174 174 174
-----------------------------------------------------------------------------------------
Savannah 115 156 156 156 156
-----------------------------------------------------------------------------------------
Tallyrand 60 92 92 92 92
------------------------------------------------------------------------------------------------------------
Baltimore Detroit 309 309 309 346 346
------------------------------------------------------------------------------------------------------------
Boston Columbus 127 127 127 164 164
-----------------------------------------------------------------------------------------
Indianapolis 309 309 309 346 346
-----------------------------------------------------------------------------------------
Syracuse 127 127 127 164 164
------------------------------------------------------------------------------------------------------------
Charleston Atlanta 115 119 119 119 119
-----------------------------------------------------------------------------------------
Charlotte 100 100 100 100 100
-----------------------------------------------------------------------------------------
Jacksonville 149 182 182 182 182
-----------------------------------------------------------------------------------------
Tallyrand 149 182 182 182 182
------------------------------------------------------------------------------------------------------------
Charlotte Atlanta 115 156 156 156 156
-----------------------------------------------------------------------------------------
Charleston 115 156 156 156 156
-----------------------------------------------------------------------------------------
Jacksonville 86 119 119 119 119
-----------------------------------------------------------------------------------------
Miami 164 238 238 238 238
-----------------------------------------------------------------------------------------
Tallyrand 86 119 119 119 119
------------------------------------------------------------------------------------------------------------
Cleveland Dockside 247 247 247 247 247
------------------------------------------------------------------------------------------------------------
Columbus Boston 375 375 375 375 375
-----------------------------------------------------------------------------------------
Dockside 247 247 247 247 247
-----------------------------------------------------------------------------------------
Springfield 127 127 127 164 164
-----------------------------------------------------------------------------------------
Syracuse 127 127 127 164 164
-----------------------------------------------------------------------------------------
Worcester 127 127 127 164 164
------------------------------------------------------------------------------------------------------------
Detroit Dockside 247 247 247 247 247
------------------------------------------------------------------------------------------------------------
Dockside Cleveland 247 247 247 247 247
-----------------------------------------------------------------------------------------
Columbus 247 247 247 247 247
-----------------------------------------------------------------------------------------
Detroit 247 247 247 247 247
-----------------------------------------------------------------------------------------
Indianapolis 247 247 247 247 247
-----------------------------------------------------------------------------------------
Syracuse 247 247 247 247 247
------------------------------------------------------------------------------------------------------------
Indianapolis Kearny 150 150 150 187 187
-----------------------------------------------------------------------------------------
Boston 127 127 127 164 164
-----------------------------------------------------------------------------------------
Dockside 247 247 247 247 247
-----------------------------------------------------------------------------------------
Springfield 127 127 127 164 164
-----------------------------------------------------------------------------------------
Syracuse 127 127 127 164 164
-----------------------------------------------------------------------------------------
Worcester 127 127 127 164 164
------------------------------------------------------------------------------------------------------------
Jacksonville Atlanta 60 92 92 92 92
-----------------------------------------------------------------------------------------
Charleston (6) 200 200 200 200 200
-----------------------------------------------------------------------------------------
Charlotte 86 119 119 119 119
------------------------------------------------------------------------------------------------------------
Kearny Boston 121 121 121 121 121
-----------------------------------------------------------------------------------------
Buffalo 169 169 169 169 169
-----------------------------------------------------------------------------------------
Columbus 121 121 121 121 121
-----------------------------------------------------------------------------------------
Detroit 121 121 121 121 121
-----------------------------------------------------------------------------------------
Indianapolis 297 297 297 334 334
-----------------------------------------------------------------------------------------
Syracuse 126 126 126 126 126
-----------------------------------------------------------------------------------------
Toledo (X) 121 121 121 121 121
------------------------------------------------------------------------------------------------------------
Marysville Columbus 36 36 36 36 36
------------------------------------------------------------------------------------------------------------
Miami Atlanta 128 174 174 174 174
-----------------------------------------------------------------------------------------
Charlotte 164 238 238 238 238
------------------------------------------------------------------------------------------------------------
Orlando Atlanta (7) 284 284 284 284 284
------------------------------------------------------------------------------------------------------------
Portsmouth Atlanta 219 219 219 219 219
------------------------------------------------------------------------------------------------------------
Savannah Atlanta 104 104 104 104 104
------------------------------------------------------------------------------------------------------------
Charleston 115 156 156 156 156
------------------------------------------------------------------------------------------------------------
Charlotte 101 101 101 101 101
------------------------------------------------------------------------------------------------------------
Confidential
--------------------------------------------------------------------------------
EXHIBIT 4.1.5
LINEHAUL RATES FOR EMPTY CONTAINERS MOVING
WITHIN THE EASTERN UNITED STATES THAT HAVE A PRIOR AND SUBSEQUENT
TRANSCONTINENTAL MOVEMENT
------------------------------------------------------------------------------------------------------------
ORIGIN DESTINATION NOTES 20' 40' 45' 48' 53'
------------------------------------------------------------------------------------------------------------
Savannah (port) Atlanta (6) 128 128 128 128 128
------------------------------------------------------------------------------------------------------------
Springfield Columbus 127 127 127 164 164
---------------------------------------------------------------------------------------
Indianapolis 309 309 309 346 346
------------------------------------------------------------------------------------------------------------
Syracuse Boston 127 127 127 164 164
---------------------------------------------------------------------------------------
Buffalo 190 190 190 227 227
---------------------------------------------------------------------------------------
Dockside 247 247 247 247 247
---------------------------------------------------------------------------------------
Springfield 127 127 127 164 164
------------------------------------------------------------------------------------------------------------
Tallyrand Atlanta 60 92 92 92 92
---------------------------------------------------------------------------------------
Charlotte 86 119 119 119 119
------------------------------------------------------------------------------------------------------------
Tampa Atlanta (7) 293 293 293 293 293
---------------------------------------------------------------------------------------
Jacksonville (7) 243 269 269 269 269
------------------------------------------------------------------------------------------------------------
Worcester Cleveland 309 309 309 346 346
---------------------------------------------------------------------------------------
Columbus 127 127 127 164 164
---------------------------------------------------------------------------------------
Indianapolis 309 309 309 346 346
------------------------------------------------------------------------------------------------------------
4.1.5 Empty movements with Prior and Subsequent Transcontinental Movements. The
rates in this Exhibit 4.1.5 shall apply to APL or LTS Movements of empty
Containers (including but not limited to temperature controlled, flat racks and
tank Containers) owned or leased by LTS or APL or their Affiliates between the
foregoing origins and destinations where that movement has an immediately prior
and subsequent Transcontinental movement.
--------------------------------------------------------------------------------
Confidential
EXHIBIT
EXPLANATION OF NOTES AND ABBREVIATIONS
HPL - Hapag Xxxxx
XX - Xxxx Wesson
IHF - International Home Foods
IP - International Paper
MAT - Matson
MSC - Mediterranean Shipping Lines
NAB - Nabisco
P&O - P&O
WM - Wal Mart
WWD - Westwood
(C) - Indicates mixed mode rate wherein service is a combination of
stack plus conventional
(S) - Indicates rate based on stack service from origin to
destination
(S1) - Indicates sub service adjusted rate for actual
origin/destination of Allentown
(S2) - Indicates sub service adjusted rate for actual
origin/destination of Greensboro
(S3) - Indicates sub service adjusted rate for actual
origin/destination of Harrisburg
(S4) - Indicates sub service adjusted rate for actual
origin/destination of Norfolk
(X) - Refers to rates on shipments interchanged by railroad to or from
a connecting rail carrier.
(R) - Rate applies only for domestic loaded reefer moves.
(1) Rates from CSX Agreement 5032, Plan 800
(2) Rates from CSX Directory 8, Plan 800
(3) Rates from CSX proposal dated 5/14/98, Plan 800
(4) Rates from NS8407
(5) Rates from CSX Agreement 5032, Plan 810
(6) Rates from CSX proposal dated 5/14/98, Plan 810
(7) Rates from CSX Directory 8, Plan 810
APINY - APL's Intermodal facility located in South Kearny
Morrisville - Rates to/fm Morrisville are shown to/fm Philadelphia
CSX
Confidential
EXHIBIT 4.3
TERMINAL SERVICES AND RATES
The following services are included in the APL/LTS linehaul rates (as
in effect from time to time) and are applicable at all of CSXI's Terminals other
than Kearny, NJ:
A. Services Included in Linehaul Rates. For Containers with
associated rail billing, the services described in Sections 4.2.1, 4.2.2, 4.2.3,
4.2.4, 4.2.5, 4.2.6 and 4.2.7 of the Agreement:
B. Parking Spaces.
B. 1 General. CSXI will provide parking spaces for Containers
and Chassis in accordance with this Paragraph B.
B.2 Space allocations. Parking space for empty APL/LTS
Equipment at CSXI's Intermodal terminals will be allocated as follows, effective
June 1, 2001:
Terminal Parking for Containers and Chassis
-------- ----------------------------------
Atlanta(1) 726
Charlotte(2) 253
Charleston 128
Jacksonville 160
Memphis 45
Portsmouth 75
Savannah 90
Boston 225
Springfield 27
Syracuse(3) 135
Worcester 24
Philadelphia/Morrisville 125
Baltimore 125
Buffalo 250
Columbus 250
Chicago(4) 365
Cincinnati 150
Cleveland 90
Nashville 85
Detroit(5) 225
Tampa 10
Orlando 10
New Orleans 10
Confidential
(1) The allocation includes 230 spaces at Xxxxxxx and 496
at Xxxxxx.
(2) The allocation includes 40 spaces for Containers
representing Greensboro volume as well as Rozel's Ferry volume.
(3) The allocation includes 50 spaces for Containers
representing Albany volume.
(4) This is an aggregate number for all Chicago area
terminals.
(5) This is an aggregate number for all Detroit area
terminals. The parties will renegotiate the space allocation upon
confirmation of the transfer of General Motors' volume to movement on
the Core Network.
B.3 Parking Space and Chassis Fleet Allocation Changes. The
number of parking spots for Containers and Chassis provided to APL/LTS will
increase and decrease at a percentage rate equal to the percentage volume
increase or decrease of Transcontinental APL/LTS loaded Containers in-bound to
the applicable Terminal. Changes in the APL/LTS volume used to determine the
next year's parking space allocation will be calculated on an annual calendar
year basis (or on such other periodic basis as the parties may mutually agree
from time to time). For example, if, at the end of a calendar year, it is
determined that the Transcontinental APL/LTS loaded Container volume that moved
in-bound to a Terminal increased by 20% over the prior year, then the number of
parking spots for Chassis and Containers provided to APL/LTS at that Terminal
will increase by 20% for the next year. If at the end of any subsequent calendar
year, it is determined that the Transcontinental APL/LTS loaded Containers
in-bound volume decreased by 25% from the prior year, the number of parking
spots for Chassis and Containers provided to APL/LTS will decrease by 25% for
the next year.
B.4 Storage in Excess of Parking Allocation. CSXI will
monitor and advise APL/LTS from time to time of the number of spaces being used
by APL/LTS Chassis and empty Containers at a Terminal. APL/LTS will use all
commercially reasonable efforts to limit storage of its Chassis and empty
Containers to the allotted spaces at each Terminal. CSXI will provide APL/LTS
with daily reports of the aggregate number of APL/LTS Chassis and empty
Containers at each Terminal and with weekly reports showing the empty Containers
and Chassis by alpha-numeric identifiers. CSXI will notify APL's/LTS' local
Terminal contact if APL's/LTS' Chassis and empty Containers exceed the
applicable storage space allotment. APL and LTS shall pay CSXI the storage
charges set forth below for all empty Containers and Chassis in excess of 100%
of the storage allotment, as to which no free time will be applicable. In
addition to the collection of storage charges, CSXI may cease allowing APL or
LTS Containers and Chassis through the Terminal gate, move Chassis and/or empty
Containers by rail from the Terminal to another location at APL's/LTS' empty
rate or take such other action it deems necessary and advisable at APL's/LTS'
expense if APL or LTS Chassis and empty Containers at the Terminal in excess of
the storage allotment are, in CSXI's reasonable opinion, affecting the
efficiency of Terminal operations. Storage charges will not be assessed for any
day on which CSXI's gate at the Terminal has been closed if any excess Equipment
is picked up on the day immediately following the day on which CSXI's gate had
been closed. Similarly, storage charges will not be assessed on empty Containers
for which there is rail billing if such empty Container arrives before cutoff
and remains on the Terminal as a result of CSXI's failure to move the empty
Container on the train specified in the rail billing.
Confidential
C. Free Time and Storage Charges for Loaded Containers. For TPI
Containers and loaded Containers in Domestic Service, free time will be
calculated and storage charges will be assessed in accordance with Directory No.
1; provided however, that if LTS, rather than its notify customer, is
responsible to pay the storage charge after lapse of free time, the storage
charge in this limited circumstance will be $27 per day per loaded Container.
For loaded APL Containers in International Service, free time will be calculated
and charged in accordance with Directory No. 1, except that the charge shall be
$27 per day per loaded Container and free time shall be day of notification plus
one hundred twenty (120) hours. When computing the free time allowance,
Saturdays, Sundays and Holidays (as defined in Directory No. 1) will be
considered additional free days unless they occur after the first chargeable
day. Due to the liability that may be imposed on CSXI by steamship carriers,
U.S. customs, the Internal Revenue Service and others if a Container is released
without payment or proper clearance, APL will not designate any entity other
than APL, including but not limited to a draymen or pick-up agent, as the notify
party for any Container in International Service. If APL is the notify party or
has designated another person or entity as the notify party for a Container
moving under this Agreement, APL shall defend, indemnify and hold harmless CSXI,
its Affiliates and the respective officers, directors, employees, and agents of
each from and against Losses associated with the release of the Container to the
notify party, including but not limited to any failure to obtain any payment or
to comply with any U.S. customs or other governmental requirements or
regulations regarding the handling, transportation or release of in-bond
shipments. In reliance on APL's blanket promise to pay storage charges and
provided that APL is the notify party, CSXI will not collect storage charges
from draymen of APL but rather will xxxx APL on a deferred basis. APL shall pay
CSXI for all such storage charges. Similarly, storage charges will not be
assessed on loaded Containers for which there is rail billing if such loaded
Container arrives before cutoff and remains on the Terminal as a result of
CSXI's failure to move the loaded Container on the train specified in the rail
billing.
D. Additional Charges. The following charges are not included in
the APL/LTS linehaul rates. If APL or LTS requests these services, the
following charge will apply:
a) Secondary lifts, "Chassis Flips" $25 per lift
b) Storage in excess of space allocation $7.50 per day per empty
Container or Chassis
E. Billing Authorization Process. The following procedures apply to
charges assessed in accordance with this Exhibit 4.3.
E.1 Storage charges. For storage charges resulting from APL/LTS
exceeding the storage allocation and any storage charges on loaded Containers
due from LTS (rather than its notify customer) or APL, Terminal representatives
for both CSXI and APL/LTS at each applicable Terminal will exchange a
spreadsheet that shows the number of empty Equipment in excess of the storage
allocation per day and the amount of any storage charges due from APL/LTS for
loaded Containers in Domestic Service. After the data in the daily spreadsheet
has been approved by APL/LTS and CSXI Terminal representatives, APL/LTS will
prepare a monthly spreadsheet aggregating the daily spreadsheet for all
Terminals and forward it to the
Confidential
CSXI North and South representatives identified in paragraph E.3 for
verification against the daily Terminal records. After verification of the
monthly statement, CSXI will send the appropriate billing contacts for APL and
LTS set forth in paragraph E.3 a billing statement based on the verified
statement data, and APL and LTS will pay all charges set forth on such billing
statement in a timely manner in accordance with this Agreement.
E.2 Secondary lifts, Chassis Flips. CSXI will directly assess
secondary lift and chassis flip charges provided to TPI Customers against the
notify customer or its agent. CSXI will obtain APL/LTS authorization for
secondary lifts and chassis flips provided with respect to APL or LTS Equipment
under the following procedures. APL/LTS will maintain a spreadsheet that shows
APL/LTS Equipment at each Terminal. If any APL/LTS Equipment requires a
secondary lift or chassis flip, CSXI will obtain an authorization number for the
lift or flip from the APL/LTS Terminal representatives. CSXI will use
commercially reasonable efforts to obtain authorization for the secondary lift
or flip before providing the service unless obtaining advance authorization
would delay the provision of transportation service to APL/LTS or otherwise
adversely affect efficient Terminal operations or the service is needed outside
of normal Terminal operating hours. If CSXI has not received an authorization
number in advance of providing the service, it will use commercially reasonable
efforts to contact the applicable APL/LTS representative and obtain an
authorization number as soon as practicable. APL/LTS shall provide CSXI with an
authorization number of the lift or flip unless the lift or flip clearly
resulted from CSXI's or its lift contractor's error, such as placing the
Container or Trailer on the wrong chassis upon initial unloading from the train.
APL/LTS will record the authorization number in its spreadsheet. The
authorization number will authorize APL's and LTS' finance departments to pay
CSXI for such services. APL/LTS will prepare a monthly statement aggregating the
daily spreadsheets of authorized lifts and flips at all Terminals and will
forward it to the CSXI North and South representatives identified in Paragraph
E.3 for verification against the daily Terminal records. After verification of
the monthly statement, CSXI will send the appropriate billing contacts for APL
and LTS set forth in section E.3 a billing statement based on the verified
statement data, and APL and LTS will pay all charges set forth on such billing
statement in a timely manner in accordance with this Agreement.
E.3 Billing Contacts. For billing matters related to Terminal
charges under this Exhibit 4.3, the following contact information shall apply.
Any party may change its billing contact information upon notice to the other
parties.
To CSXI: For charges verified by CSXI North and South
representatives below:
Xxxx Xxxxxxx,
CSX Intermodal, Inc.
(J-764), Xxxx South Tower, 000 X. Xxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
E-Mail: Xxxx_Xxxxxxx@xxx.xxx
Confidential
For verification of monthly spreadsheet for
Terminals in the North:
Xxxxxx Xxxxxxxx
0000 X. Xxxxxxxxxxx Xxxxxxxx Xxxx.
Xxxxxxxxxxxx, XX. 00000.
Tel: 000-000-0000
Fax: 000-000-0000.
E-Mail: Xxxxxx_Xxxxxxxx@xxx.xxx
For verification of monthly spreadsheet for
Terminals in the South:
Xxx Xxxxx
000 Xxxxxxxxx XX
Xxxxxxx, XX 00000.
Tel: 000 000-0000
Fax:000-000-0000.
E-mail: Xxx_Xxxxx@xxx.xxx
to APL: For charges incurred in the Northeast
(Portsmouth, Boston, Springfield,
Philadelphia, Worcester,
Baltimore and Buffalo):
Xxx Xxxxxxx, Director of Operations Northeast
APL Limited,
000 Xxxxxxx Xxx.,
Xxxx 00x, Xxxxx Xxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
E-Mail: xxx_xxxxxxx@xxx.xxx
For charges incurred in the Northwest (Chicago,
Cincinnati, Cleveland, Pittsburgh, Detroit
and Columbus):
Xxxxx Xxxxx
APL Limited
0000 Xxxxx Xxxxxxx Xx.
Xxxxxxx, XX 00000
Tel: 000 000 0000
Fax: 000 000 0000
E-Mail: xxxxx_xxxxx@xxx.xxx
For charges incurred in the South:
Xxxx Xxxxxxx, APL Limited
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Telephone:
Fax:
Confidential
E-mail:
To LTS: For charges incurred in the North:
Xxxx Xxxxxx, Pacer Stacktrain,
000 Xxxxxxxxxxxx Xxx.
Xxxxx Xxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
E-Mail: xxxx_xxxxxx@xxxxxxxxxx.xxx
For charges incurred in the South:
Xxxxx Xxxxxx,
Pacer Stacktrain,
0000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
E-Mail: xxxxx_x_xxxxxx@xxxxxxxxxx.xxx
E.4 APL/LTS Local Terminal Contacts. From time to time upon
CSXI's request, APL/LTS will provide CSXI with a list of their applicable
Terminal representatives who will be involved in the authorization of
lifts/flips, management of stored Equipment and reconciliation of Terminal
storage data described in this Exhibit 4.3.
Confidential
EXHIBIT 4.4
DEDICATED TRAINS
APL and LTS will pay the per Container rates set forth in Exhibits 4.1.1, 4.1.2,
4.1.3 and 4.1.4 subject to the minimum charges per train set forth below. The
minimum charge per train is based on the number of FEU's tendered by APL and LTS
for Dedicated Train movement:
----------------------------------------------------------------
Number of FEU's Points in Note A Points in Note B
----------------------------------------------------------------
60 or less $89,100 $29,448
----------------------------------------------------------------
61-70 $89,100 $29,631
----------------------------------------------------------------
71-80 $89,100 $29,371
----------------------------------------------------------------
81-90 $89,100 $29,117
----------------------------------------------------------------
91-100 $89,100 $31,617
----------------------------------------------------------------
100-110 $89,100 $34,117
----------------------------------------------------------------
111-120 $89,100 $35,514
----------------------------------------------------------------
121-130 $89,991 $38,014
----------------------------------------------------------------
131-140 $90,884 $40,514
----------------------------------------------------------------
141-150 $92,964 $41,912
----------------------------------------------------------------
151-160 $93,851 $44,412
---------------------------------------------------------------
161-170 $94,744 $45,806
----------------------------------------------------------------
171-180 $96,822 $47,204
----------------------------------------------------------------
181- or over N/A N/A
----------------------------------------------------------------
Maximum Run Time
----------------
Note A: From Chicago, IL to South Kearny, NJ. 34 hours
Note B: From New Orleans, LA to Atlanta, GA 20 hours
From Memphis, TN to Atlanta, GA 25 hours
EXAMPLE
If APL and LTS tendered the shipments set forth below for movement in Dedicated
Train service from Chicago to South Kearny, the train would be rated as shown:
APL/LTS Tender Rate Exhibit Rates Resulting Charges
-------------- ------------------ -----------------
90 APL 40' shipments $500 $45,000
50 LTS 48' shipments $524 $26,300
10 TPI 40' shipments $574 $ 5,740
---------------------- -------
150 Total Shipments Total Charges $77,040
As the total charges based on the Rate Exhibit are less than the required
minimum per charge for a train of 150 FEU's, APL would pay the minimum train
charge of $92,964.
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If APL/LTS advises CSXI that it will have less than one hundred eighty one (181)
FEUs for movement on the Dedicated Train, then CSXI may find other shipments
which can be placed on that train. Further, CSXI may add other shipments to a
Dedicated Train when APL/LTS has one hundred eighty-one (181) FEUs or more. Any
shipments added by CSXI shall neither delay the planned departure of the train
nor its planned arrival and availability at destination. The minimum charges
shown in this Exhibit 4.4 will not apply when CSXI adds shipments of other CSXI
customers to the Dedicated Train. Shipments that a western railroad carrier adds
to the Dedicated Train will be counted to determine the minimum train charge, if
any, to be paid by APL or LTS. Prior to the departure of the Dedicated Train
from the origin terminal, CSXI shall advise APL in writing as to how many
additional shipments it has added to the Dedicated Train.
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EXHIBIT 4.11
AMENDMENTS TO DIRECTORY NO. 1
The provisions of Directory No. 1 set forth in this Exhibit shall be
modified to read as set forth below. For purposes of construing Directory No. 1,
APL or LTS, as applicable, shall be considered the Shipper.
ITEM 10. INTRODUCTION, GENERAL TERMS, AND INTERPRETATION
(f) MODIFICATION OF TERMS
The terms of this Directory may be changed by CSXI in accordance with
Appendix 4.11 of the Agreement. In the event of conflict between the terms in
this Directory and the Agreement, the conflicting terms of the Agreement will
control.
ITEM 90. CSXI LIABILITY FOR CARGO CLAIMS
(a) LIMIT OF LIABILITY
Subsection a) iv shall be replaced with the following: "CSXI's
liability as defined in (ii) and (iii) above shall be subject to a maximum of
$250,000 per Container."
(d) FILING
All claims for damage to or loss of Cargo must be in writing and
received by CSXI within one (1) year from the date of delivery of the Shipment
(or if a connecting Carrier involved in the move requires a shorter period, the
Carrier's shorter period will apply). If the Shipment has not been delivered,
then the claim must be filed within one (1) year (or the shorter period required
by a connecting Carrier) of the time that the Shipment was scheduled for
delivery. The time limit is designed to enable CSXI sufficient time to refile
and process its claim with its Underlying Carrier or other contractor, if
applicable.
If Shipper has not filed a claim in the manner required by this
Directory within the foregoing time period, CSXI's obligation to process and,
where appropriate, pay Cargo claims, shall be extinguished and CSXI shall be
released from any liability therefor. After the expiration of the one (1) year
period (or the shorter period required by a connecting Carrier), Shipper may
proceed by filing a written claim directly with CSXI's Underlying Carriers, but
CSXI makes no representations regarding, and bears no responsibility for, the
timeliness or sufficiency of any such filing nor the payment of the claim.
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(f) BURDEN OF PROOF
In any legal proceedings filed against CSXI with respect to a Cargo
loss or damage claim, Shipper must prove, in addition to all other elements of
its claim as defined in this Item 90, that the Cargo was: in good condition,
properly prepared for transportation, appropriately packaged, loaded, blocked
and braced within the Vehicle pursuant to the applicable AAR guidelines and all
other relevant rules and regulations at the time that the Shipment was tendered
by the Shipper or Interchanged to CSXI or its Underlying Carrier or contractor,
and that the Shipment was damaged during the course of the service arranged or
provided by CSXI. The failure of the Shipper to establish the foregoing shall
result in a conclusive presumption that the Shipment was not damaged during
transportation services arranged or provided by CSXI. The foregoing
notwithstanding, CSXI shall waive this presumption and Shipper shall not be
required to prove the circumstances set forth above in the event of damage to
Cargo as a result of a derailment or loss of Cargo from pilferage.
(h) DAMAGES
The second paragraph of this section shall be deleted.
ITEM 150. SHIPPING DOCUMENT
APL/LTS shall not be required to provide the following information in its
shipping document:
(14) Commodity and STCC number (7 digits) unless the cargo is hazardous
materials or waste.
(15) Actual Shipper
(16) Actual origin city, state
(17) Actual receiver
(18) Actual destination
Drop off/Stay with
Desired Appointment time
Vessel Name
Sailing Date
Ocean Xxxx of Lading number
Booking number
APL and LTS shall provide any item of the foregoing information if it is
necessary to determine compliance with Article 7 or to apply the methodologies
in Article 9.
ITEM 160. BENEFICIAL OWNERS
This section shall be deleted.
ITEM 180. CREDIT AND PAYMENT PROVISIONS
Item 180 shall be revised to read as follows: "All transportation, terminal,
accessorial charges or other charges owed CSXI with respect to a Shipment must
be paid in U.S. Dollars."
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ITEM 190. OVERCHARGE AND UNDERCHARGE CLAIMS
Claims by CSXI for undercharges and by Shipper for overcharges must be made to
the other party in writing within one year of delivery of the Shipment. Failure
to do so within the allotted time shall constitute a waiver of the claim and a
release of the other party from any liability therefor. A response to the
overcharge or undercharge claim must be made by the applicable party within
thirty (30) days of receipt. All lawsuits for overcharges or undercharges must
be filed within one year of delivery of the Shipment.
ITEM 255. VEHICLE DAMAGE: SHIPPER VEHICLES
Item 255 shall be deleted as these matters are covered elsewhere in this
Agreement.
ITEM 370. CHASSIS, CONTAINERS (WITHOUT WHEELS)
Item 370 shall apply except to Terminals where the matters are covered by
Exhibit 4.3 or Exhibit 6.1.
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EXHIBIT 6.1
KEARNY TERMINAL
Parking Spots. CSXI will provide APL/LTS with, as of the Effective Date and
subject to adjustment as set forth below, a minimum of 760 parking spots for
Chassis and for APL empty and loaded Containers and LTS empty Containers at the
Combined Terminal without charge during the term of this Agreement. Each parking
space used by Containers may be wheeled or stacked, unless prohibited by law.
The number of parking spots provided to APL/LTS at the Combined Terminal will
increase and decrease at a percentage rate equal to the percentage volume
increase or decrease of Transcontinental APL and LTS loaded Containers in-bound
to the Combined Terminal. Changes in the APL/LTS volume used to determine the
next year's parking space allocation will be calculated on an annual calendar
year basis. For example, if, at the end of a calendar year, it is determined
that the Transcontinental APL/LTS loaded Container volume that moved in-bound to
the Combined Terminal increased by 20% over the prior year, then the number of
parking spots for Chassis and Containers provided to APL/LTS at the Combined
Terminal will increase by 20% for the next year. If at the end of any subsequent
calendar year, it is determined that the Transcontinental APL/LTS loaded
Containers in-bound volume decreased by 25% from the prior year, the number of
parking spots for Chassis and Containers provided to APL/LTS will decrease by
25% for the next year.
Storage In Excess of Parking Allocation. CSXI will monitor and advise APL/LTS
from time to time of the number of spaces being used by APL/LTS Chassis and
Containers at the Combined Terminal. APL/LTS will use all commercially
reasonable efforts to limit storage of its Equipment to the allotted spaces at
the Combined Terminal. CSXI will notify APL's/LTS' local Terminal contact if
APL's/LTS' Chassis or Containers exceed the applicable storage space allotment.
APL/LTS will pay CSXI the storage charges set forth below after expiration of
the applicable free time for all Equipment in excess of 100% of the storage
allotment. CSXI may cease allowing APL or LTS Containers through the Terminal
gate, move empty Containers from the Terminal to another location at APL's/LTS'
empty rate or take such other action it deems necessary and advisable if APL or
LTS Containers at the Terminal in excess of the storage allotment are, in CSXI's
reasonable opinion, affecting the efficiency of Terminal operations. Storage
charges will not be assessed for any day on which CSXI's gate at the Combined
Terminal has been closed if any excess Equipment is picked up on the day
immediately following the day on which CSXI's gate had been closed. Similarly,
storage charges will not be assessed on Containers for which there is rail
billing if such Container remains on the Terminal as a result of CSXI's failure
to move the Container on the train specified in the rail billing.
Storage Charges. Storage charges for Containers or Chassis in excess of space
allocation shall be as follows: $10 per day per empty Container, $27 per day per
loaded Container and $5 per day per bare Chassis if CSXI's local Terminal
management determines that APL/LTS is abusing its Chassis space allocation.
Lift Charges. Charges for lifting Containers from the ground to Intermodal Cars,
from the ground to Chassis, or from one Chassis to another Chassis ("Extra
Lift") will be provided at a charge of $23.00 per Extra Lift.
Ingate or Outgate Inspections. A charge of $8.50 per gate move will apply for
ingate and outgate inspections of APL or LTS Containers or Chassis without rail
billing "Street-to-Street" through CSXI's normal gate.
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EXHIBIT 6.9
INVENTORY OF YARD AND LIFT EQUIPMENT
YARD SWITCHERS
APL Id Number Make Year Model
------ ------ ---- ---- -----
APST 131 to 134 4 Capacity 1987 TJ4000
APST 204 to 211 8 Ottawa 1989 YT30
APST 214 to 221 8 Ottawa 1989 YT30
CRANES
APL Id Number Make Year Model
------ ------ ---- ---- -----
APSZ 136 to 138 3 Paceco 1989 40LT RTG
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EXHIBIT 9.2
METHODOLOGY DESCRIPTION
CSXI will, subject to the conditions set forth in Appendix 9 and
elsewhere in the Agreement, apply the methodology described in this Exhibit 9.2
(the "Methodology") to compare linehaul rates offered to APL and LTS set forth
in Exhibits 4.1.1, 4.1.2, 4.1.3 and 4.1.4 with comparable rates offered to other
CSXI customers with respect to movements of Containers described in Sections
4.1.1, 4.1.2, 4.1.3 and 4.1.4 of Appendix 4.1 of the Agreement interchanged to
or from CSXI at Gateways where CSXI participates in Transcontinental movements
on an Interline or Rule 11 basis and to compare linehaul rates offered to APL
and LTS set forth in Exhibit 4.1.5 with comparable empty rates offered to other
CSXI customers with respect to movements of Containers described in Section
4.1.5 of Appendix 4.1 of the Agreement.
A. Competitive Proposals Comparison
A.1. General Scope of the Comparison. If at any time during the term
of the Agreement, an agreement is reached between CSXI and any CSXI customer,
other than APL or LTS, which grants such other customer lower linehaul rates
(a) on Transcontinental Container shipments in International Service
between Gateways on the one hand and points in the Eastern States on the other
hand, than are available to APL and LTS on a round-trip basis (or one way basis
if so required under Paragraph A.7) under Exhibit 4.1.1 or 4.1.3 of the
Agreement, as adjusted from time to time, for Containers of the same type and
size moving between the same points, or
(b) on Transcontinental Container shipments in Domestic Service
between Gateways on the one hand and points in the Eastern States on the other
hand, than are available to APL and LTS on a round-trip basis (or one way basis
if so required under Paragraph A.7) under Exhibit 4.1.2 or 4.1.4 of the
Agreement, as adjusted from time to time, for Containers of the same type and
size moving between the same points, or
(c) on empty Container shipments in Domestic Service from an origin
to a destination (excluding Gateways in both instances) which are both in the
Eastern States where that movement has an immediately prior and an immediately
subsequent Transcontinental movement, than are available to APL or LTS on a one
way basis under Exhibit 4.1.5 of the Agreement as adjusted from time to time,
for Containers of the same type and size moving from and to the same points
where the APL or LTS movement also has an immediately prior and an immediately
subsequent Transcontinental movement,
CSXI will adjust the linehaul rates of APL/LTS in accordance with this Exhibit.
This adjustment will occur as of the effective date of any such agreement with
another customer (or after any transition period permitted under Section 9.6 of
Appendix 9), and subject to the same terms and conditions as may be contained in
the other customer's agreement.
A.2. Right to Audit. In the event that APL/LTS believes CSXI has not
so adjusted its or the other customer's rates, APL/LTS may invoke the right to
audit CSXI under Section 23.2 of the Agreement with respect to customers
designated by APL/LTS at the time of the audit.
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A.3 Audit Procedures and Negotiations. Upon notice of APL's/LTS'
invocation of its audit rights, CSXI may prepare an analysis, identify problems
and propose corrective action. The independent auditor selected in accordance
with Section 23.2.2 of the Agreement will review the agreements between CSXI and
the designated customers and determine whether the Container movements of the
other customer are of the same type and size between the same Gateway and point
in the Eastern States, moving Transcontinentally on an Interline or Rule 11
basis in the same type of Service (whether International or Domestic) and, based
on the procedures described in this Exhibit, whether the other customer's
agreement produces lower round-trip linehaul rates (after adjustment for an
"apples to apples" comparison under Paragraph A.9) than are available to APL and
LTS under the applicable Rate Exhibit. For a movement on an Interline basis, the
comparison will be made on a CSXI's divisional share of the through linehaul
rate. The auditor will also review CSXI's analysis of those rates, if any, and
its proposed corrective actions and will determine whether CSXI's corrective
actions are in compliance with the Methodology. If the auditor determines that a
designated customer has such lower rates, the auditor may determine if there are
other areas of non-compliance that CSXI failed to address; and, if so, the
auditor will work with CSXI to design, as well as implement, corrective action.
A.4. Right to Arbitrate. If CSXI and APL/LTS have a dispute regarding
the auditor's report and findings and are unable to reach agreement within
ninety (90) days from the date that the auditor's report is provided, then the
matter may be submitted to arbitration under the provisions of Article 22 of the
Agreement.
A.5. Load/Load and Load/Empty Comparisons. Unless a one-way
comparison is required under Paragraph A.7, the following comparisons will be
made:
A.5.1 Transcontinental International. The other customer's
round-trip Transcontinental International Service load/load linehaul
rates will be be compared to the APL/LTS round-trip Transcontinental
International Service load/load linehaul rates for Container
shipments. APL's/LTS Transcontinental round-trip International Service
eastbound load/empty westbound linehaul rates will be compared with
other customer's Transcontinental International Service eastbound
load/empty westbound linehaul rates. Transcontinental round-trip
International Service eastbound load/load westbound Domestic Service
linehaul rates for 20 foot, 40 foot and 45 foot Containers will be
compared, the APL/LTS rate versus the other customer's rates.
A.5.2 Transcontinental Domestic. The other customer's
round-trip Transcontinental Domestic Service load/load linehaul rates
will be compared to the APL/LTS round-trip Transcontinental Domestic
Service load/load linehaul rates for Container shipments. APL's/LTS
Transcontinental round-trip Domestic Service eastbound load/empty
westbound Domestic Service linehaul rates will be compared with other
customer's Transcontinental round-trip Domestic Service eastbound
load/empty westbound Domestic Service linehaul rates.
A.6. Round Trip Comparisons Generally. Comparisons are to be made
by specific Container size, for a single Container unit, by each Lane (unless an
O/D Pair comparison is required under Paragraph A.7), for each CSXI customer
compared to APL/LTS.
A.7. One-Way Comparisons.
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A.7.1 Unbalanced Lanes. Where any other CSXI customer's
Transcontinental Container volume, both loaded and empty, moving in one
direction is less than 50% of its Transcontinental Container volume, both
loaded and empty, moving in the opposite direction, its linehaul rates will
be compared to the APL/LTS linehaul rates on a one-way basis. (Note: CSXI's
volume records will be used to determine whether the other customer meets
the foregoing eastbound or westbound balance criteria.) Whether a movement
is "eastbound" or "westbound" will be determined by direction to or from
CSXI's Gateway. For instance, from Chicago and St. Louis to all Eastern
States will be considered eastbound; to Chicago and St. Louis from all
Eastern States will be considered westbound.
Example:
(A) 100 eastbound loads + 20 westbound loads + 29 westbound
empties would activate this paragraph
(B) 100 eastbound loads + 30 westbound loads + 21 westbound
empties would not activate this paragraph
A.7.2 Empty Rates in Exhibit 4.1.5. All rates set forth in
Exhibit 4.1.5 for APL or LTS Movements between an origin and a destination
(excluding Gateways in both instances) which are both in the Eastern States
where that movement has an immediately prior and an immediately subsequent
Transcontinental movement will be compared on a one-way basis to the
linehaul rates offered to other customers moving empty Containers between
the same origin and destination where that customer's movement also has
immediately prior and subsequent Transcontinental movements.
A.8. Use of Actual Rates. Any average rates used for day to day
billing purposes will not be used for comparison. The actual rates that are used
to derive those average rates, if any, will be used for comparison purposes.
A.9. Apples to Apples Comparison. When making a comparison of
"linehaul rates" as provided herein, APL/LTS and CSXI recognize that APL's/LTS'
cost of movement should be compared to other customer's "cost" of movement. The
cost of movement includes CSXI's linehaul rates and may include railcar cost,
railcar allowances, refunds, annual volume incentives, signing bonuses, terminal
charges or terminal charge credits and any other like cost components such that
an "apples to apples" comparison can be made between APL's/LTS' costs and those
of other CSXI customers. However, refunds, annual volume incentives, signing
bonuses and similar payments made by CSXI to LTS pursuant to agreement dated May
4, 1999 or to Affiliates of LTS shall not be subtracted from the linehaul rates
of LTS or such Affiliates when comparing LTS' or that Affiliate's rates to the
LTS rates.
A.10. Transcontinental Comparisons Only. Actual origins and
destinations west of the Continental Divide are considered distinct from actual
origins and destinations east of the Continental Divide for purposes of this
comparison. For example, rates applying to shipments originating in the State of
Illinois and destined to the State of New York will not be compared to rates
applying on shipments originating in the State of California destined to the
State of New York. However, in the event that CSXI does not specifically
restrict the application of the rates that it provides to entities other than
APL, and such rates can be used for either traffic type as
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described above, such rates/charges will be compared to those of APL. It is
understood that APL's rates are based on Containers moving from and to points
west of the Continental Divide unless otherwise specified.
A.11 Adjustment Mechanics. In the event that any linehaul rate needs
adjustment due to the results of the application of this Methodology, CSXI shall
effectuate the adjustment through some combination of the following:
A.11.1 Raise Other Customer's Rates. CSXI may increase the
other customer's rates. Any delay in implementation of the rate
increase will be added to the Mirror Period.
A.11.2 Reduce APL and LTS Rates. CSXI will reduce the APL/LTS
rates effective immediately to the extent not remedied under Paragraphs
A.11.1 and/or A.11.3.
A.11.3 Retroactive Adjustment. To adjust for the time period
that the lower comparable rate was made available to the other customer
and not to APL or LTS, CSXI may, at its option, (a) provide APL/LTS
with a lump sum refund payment representing the difference in the
linehaul rate which APL/LTS had been paying and the adjusted rate times
the volume they shipped in the relevant period or (b) reduce the
APL/LTS rate for a minimum of the same period of time that such lower
linehaul rates were in effect for that other customer prior to the
adjustment of the APL/LTS rates (a "Mirror Period"), regardless of any
action CSXI may take to modify the linehaul rates of the other entity.
For example, if XYZ Company has a lower load/load charge which had been
in effect for six months, the reduction in APL's /LTS' load/load charge
would apply for a minimum of six months.
A.11.4 Later Adjustment. If at a later date it is determined
that APL or LTS did not meet one or more criteria for a rate reduction
under Appendix 9 of the Agreement, APL/LTS shall reimburse CSXI for the
differences between the amount APL and LTS would have paid without the
improper rate reduction under Article 9 and the amount that APL and LTS
actually paid through either a lump sum refund or by adding such amount
to its payments spread evenly over a six-month period.
A.12. Implementation of Rate Reductions for APL/LTS. When CSXI
effectuates the adjustment by reducing APL's or LTS' rates in order to comply
with the Methodology, the reductions will be implemented directionally, on a
load or empty basis and on a prospective basis as follows:
A.12.1 Customer's Rate is Lower in One Direction. If a CSXI
customer's linehaul rate for the applicable type and size of Container
is lower in only one direction and equal in the other direction, the
APL/LTS rate will be reduced in the direction for which APL/LTS rate is
higher so that the APL/LTS round-trip rate for the applicable type and
size of Container is equal to or lower than the other CSXI customer's
round-trip rate.
A.12.2 Customer's Rate is Lower in Both Directions. If a CSXI
customer's linehaul rates for the applicable type and size of Container
are lower than the APL/LTS rates in both directions, CSXI will reduce
each APL/LTS rate so that the APL/LTS
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linehaul rate in each direction is less than or equal to the other
customer's linehaul rate in each direction.
A.12.3 Customer's Rates is Higher in One Direction and Lower
in the Other. If a CSXI customer's linehaul rate for the applicable
type and size of Container is higher than the APL/LTS rate in one
direction but lower in the other direction such that the CSXI
customer's overall round-trip rate is lower, the APL/LTS rate will be
reduced in the direction in which the APL/LTS linehaul rate is higher
so that the APL/LTS round-trip rate is equal to or lower than the other
customer's round-trip rate.
A.13. Effect of CSXI's Rate Adjustment to Other Customer on APL/LTS
Rate. If CSXI increases the linehaul rates of the other customer during or
following the Mirror Period, the APL/LTS linehaul rates may be adjusted as
provided below. Any adjustment of APL/LTS rates will be made consistent with the
provisions of Paragraph A.12 of this Exhibit. Further, in no event will any
one-way rate be increased to a level exceeding the rates set forth in the Rate
Exhibits plus any adjustments resulting from the application of Article 8.
A.13.1 Other Customer's Adjusted Rate is the Same as APL/LTS
Rate. If CSXI adjusts the linehaul rates of the other customer during
the Mirror Period to a level equal to the APL/LTS linehaul rates that
were in effect prior to the Mirror Period plus any adjustments
resulting from the application of Article 8, the APL/LTS linehaul rates
will be increased to their prior level plus any adjustments made under
Article 8 effective the first day following the end of the Mirror
Period. (See Example A.)
A.13.2 Other Customer's Adjusted Rate is Less Than APL/LTS
Rate Before Mirror Period But More than APL/LTS Rate During the Mirror
Period. If CSXI adjusts the other entity's linehaul rates during the
Mirror Period to a level less than the round-trip level of the APL/LTS
linehaul rates prior to the Mirror Period but greater than the
round-trip level of the APL/LTS linehaul rates during the Mirror
Period, then at the end of the Mirror Period, the round-trip of the
APL/LTS linehaul rates can be increased to the same level as the other
entity's increased linehaul rates (See Example B). Provided, however,
in no event will the round-trip level of the APL/LTS linehaul rates be
increased to a level exceeding that which applied prior to the Mirror
Period plus any normal adjustments resulting from the application of
Article 8.
A.13.3 Other Customer's Adjusted Rate is the Higher Than
APL/LTS Rate Before Mirror Period. If CSXI adjusts the linehaul rates
of the other entity during the Mirror Period to a level higher than the
round-trip level of the APL/LTS linehaul rates that applied prior to
the Mirror Period, then at the end of the Mirror Period, the round-trip
of the APL/LTS linehaul rates can be increased to a level no greater
than that which applied prior to the Mirror Period plus any normal
adjustments that would have applied to the APL/LTS linehaul rates under
the provisions of Article 8; and, further provided, in no event will
the application of Article 8 adjustment result in a rate higher than
that provided to the other customer. (See Example C).
A.13.4 Adjustments after Mirror Period. If, after the end of
the Mirror Period, CSXI adjusts the linehaul rates of the other
customer on one or more occasions, CSXI may adjust the round-trip level
of the APL/LTS linehaul rates on the same dates and to the same level
as the other customer subject to the following conditions. In no event
will
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the level of the APL/LTS round-trip linehaul rates exceed the level
that applied prior to the start of the Mirror Period plus any normal
adjustments that would have applied to the APL/LTS linehaul rates under
the provisions of Article 8. (See Examples D and E).
EXAMPLE A
---------------------------------------------------------------------------------------------------------------
Date Round-trip APL Other Entity
Linehaul rates Round-trip
Linehaul
rates
---------------------------------------------------------------------------------------------------------------
10/01/00 $400 $390 Lower rate for other entity effective for 7 months
04/30/01 $404* $390 - determines APL Mirror Period
---------------------------------------------------------------------------------------------------------------
05/01/01 $390 $408 Mirror Period commences; Other entity's rate
increased
---------------------------------------------------------------------------------------------------------------
11/30/01 $390 $408 Mirror Period ends
---------------------------------------------------------------------------------------------------------------
12/01/01 $408 $408 APL rate increased
---------------------------------------------------------------------------------------------------------------
* See Note after Examples.
EXAMPLE B
---------------------------------------------------------------------------------------------------------------
Date Round-trip APL Other Entity
Linehaul rates Round-trip
Linehaul
rates
---------------------------------------------------------------------------------------------------------------
10/01/00 $400 $390 Lower rate for other entity effective for 7 months
04/30/01 $404* $390 - determines APL Mirror Period
---------------------------------------------------------------------------------------------------------------
05/01/01 $390 $395 Mirror Period commences; Other entity rate
increased
---------------------------------------------------------------------------------------------------------------
11/30/01 $390 $395 Mirror Period ends - 7 months
---------------------------------------------------------------------------------------------------------------
12/01/01 $395 $395 APL rate increased
---------------------------------------------------------------------------------------------------------------
*See Note after Examples.
EXAMPLE C
---------------------------------------------------------------------------------------------------------------
Date Round-trip APL Other Entity
Linehaul rates Round-trip
Linehaul
rates
---------------------------------------------------------------------------------------------------------------
10/01/00 $400 $390 Lower rate for other entity effective for 7 months
04/30/01 $404* $390 - determines APL Mirror Period
---------------------------------------------------------------------------------------------------------------
05/01/01 $390 $425 Mirror Period commences; Other entity rate increased
---------------------------------------------------------------------------------------------------------------
11/30/01 $390 $425 Mirror Period ends - 7 months
---------------------------------------------------------------------------------------------------------------
12/01/01 $408 $425 APL rate increased to maximum allowable level
---------------------------------------------------------------------------------------------------------------
*See Note after Examples.
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EXAMPLE D
---------------------------------------------------------------------------------------------------------------
Date Round-trip APL Other Entity
Linehaul rates Round-trip
Linehaul
rates
---------------------------------------------------------------------------------------------------------------
11/01/00 $400 $390 Lower rate for other entity effective for 6 months
04/30/01 $404* $390 - determines APL Mirror Period
---------------------------------------------------------------------------------------------------------------
05/01/01 $390 $390 Mirror Period commences
---------------------------------------------------------------------------------------------------------------
10/31/01 $390 $390 Mirror Period ends - 6 months
---------------------------------------------------------------------------------------------------------------
02/01/02 $410 $410 Other entity's and the APL/LTS rates increased
---------------------------------------------------------------------------------------------------------------
*See Note after Examples.
EXAMPLE E
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Date Round-trip APL Other Entity
Linehaul rates Round-trip
Linehaul
rates
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11/01/00 $400 $390 Lower rate for other entity effective for 6 months -
04/30/01 $404* $390 determines APL Mirror Period
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05/01/01 $390 $390 Mirror Period commences
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10/31/01 $390 $390 Mirror Period ends
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12/15/01 $408 $410 First adjustment to rates. APL limited to
maximum Article 8 adjustment
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01/01/02 $410* $410 Rate adjusted under Article 8
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04/01/02 $416 $425 Second adjustment to rates. APL limited to maximum
Article 8 adjustment
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*Note: Under the above Examples A through E, the APL/LTS rate of $400 would have
been subject to normal adjustments under Article 8 according to the following
assumed calculations:
01/01/01 $400 x 1.01 = $404
07/01/01 $404 x 1.01 = $408
01/01/02 $408 x 1.02 = $416
A.14 Effect on Different Container Sizes. As an outcome of the
application of this Methodology, there may be incongruities in the rate
structure with regard to Container size and O/D pairs. For example, certain
rates for 48-foot Containers may be lower than rates for 40 foot Containers
between the same O/D pair. Such an event will not serve as the basis for
lowering the rate for the 40-foot Containers.
A.15 Gateway Comparisons. An "Alternate Gateway" is a Gateway that
provides stack Intermodal Car service to a point in the Eastern States (an
"Eastern Point") which APL/LTS accesses through a different Gateway under this
Agreement ("APL Gateway"). CSXI will offer to APL/LTS rates for movements
through an Alternate Gateway to an Eastern Point
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which are equal to the rates offered to other CSXI customers moving Containers
of the same type and size in stack Intermodal Car service through that Alternate
Gateway to an Eastern Point. If APL/LTS are able to interchange their Container
traffic at the Alternate Gateway at the schedules offered for the Alternate
Gateway but CSXI is unable to provide transportation services to APL/LTS at the
Alternate Gateway because of operational constraints, the following methodology
will apply. CSXI will determine the cents per mile that APL pays in each
direction between the APL Gateway and the Eastern Point for each Container type
and size. CSXI will also determine the other CSXI customer's rate on a cents per
mile basis in each direction between the Alternate Gateway and the Eastern Point
on each Container type and size. If the CSXI customer's rate is lower on a cents
per mile basis in either direction, then CSXI will reduce APL's cents per mile
rate to equal the CSXI customer's cents per mile rate. That cents per mile rate
will be converted back to a Container rate. The reduced rate shall only apply to
the number of APL/LTS Containers equal to the number of Containers shipped by
the CSXI customer through the Alternate Gateway to the applicable Eastern Point.
CSXI's obligation to reduce APL/LTS' rates at the APL Gateway shall only
continue for as long as operational constraints prevent CSXI from providing
transportation services to APL/LTS at the Alternate Gateway. For example, assume
that the following facts apply (a) APL and LTS are able to interchange their
Container traffic in St. Louis for movement to Kearny, NJ; (b) CSXI is unable to
provide transportation services to APL and LTS Containers at St. Louis as a
result of operational constraints, (c) the then current APL/LTS rate for loaded
48' foot Containers from Chicago to Kearny and from Kearny to Chicago are $600
and $450, respectively; (d) CSXI charged a customer $650 and $500, respectively,
for loaded 48' foot Containers from St. Louis to Kearny and from Kearny to St.
Louis; (d) the distance between Chicago and Kearny is 890 miles and between St.
Louis and Kearny is 1080 miles, (e) accordingly, the cents per mile rates for
loaded 48' foot Containers from Chicago to Kearny and from Kearny to Chicago are
$.67 and $.51, respectively and the cents per mile rates for loaded 48' foot
Containers from St. Louis to Kearny and from Kearny to St. Louis are $.60 and
$.46, respectively; (f) CSXI moved 500 loaded 48' foot Containers from St. Louis
to Kearny and 300 loaded 48' foot Containers from Kearny to St. Louis during a
calendar year in which CSXI was operationally unable to move APL/LTS Containers
from St. Louis, CSXI will reduce the APL/LTS rate from Chicago to Kearny to $546
for 500 shipments and its rate from Kearny to Chicago to $412 for 300 shipments.
B. Comparison with EMP/NACS rates
B.1 General. CSXI will, subject to the conditions set forth in Article 9
and elsewhere in the Agreement, compare linehaul rates offered to APL and LTS
set forth in Exhibit 4.1.2, with comparable rates offered to other CSXI
customers under the EMP/NACS programs or their successors as set forth in this
Paragraph B. The provisions of Paragraphs A.2, A.3 and A.4 shall also apply to
comparisons under this Paragraph B.
B.2 Comparison Method.
B.2.1 Lanes. Comparisons will be made on a round-trip basis in Lanes
where LTS offers Transcontinental Domestic Service and where CSXI offers
EMP/NACS Transcontinental Domestic Service in those same Lanes. No
comparison will be made in any Lane where either the LTS or the CSXI
EMP/NACS annual round-trip volume of 48' and 53' Containers in
Transcontinental Domestic Service is less than 500 Containers.
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B.2.2 Comparisons. CSXI will make comparisons of its EMP/NACS rates to
the LTS linehaul rates in Exhibit 4.1.2. In the event that LTS believes it
is disadvantaged by the EMP or NACS rates, then LTS may request that CSXI
perform additional comparisons and make resulting adjustments to LTS rates
as provided herein.
B.2.3 "Apples to Apples" Comparisons. The parties recognize that the
EMP and NACS rates, or the CSXI division of any through Transcontinental
EMP or NACS rates, are different in structure than the LTS rates provided
in Exhibit 4.1.2 and that both the EMP/NACS and LTS rates need to be
modified in order to make logical comparisons between the rates. In
consideration of the foregoing, the parties have established the following
methodology to arrive at a logical "apples to apples" comparison:
1. Each Lane will be compared separately.
2. Each Container size will be compared separately.
3. A cost component covering Container and Chassis ownership and
maintenance/repair costs will be added to the LTS rates applicable to
the loaded and empty movements in each direction. This component will
be equal to the average EMP and NACS equipment cost experienced by
CSXI in each specific Lane during the prior annual period. CSXI will
secure the necessary data from the REZ1 and NACS computer systems and
calculate the average equipment cost as provided in Paragraph B.2.4
below
4. $28 per Container will be added to the westbound LTS Rates
applicable to empty containers when comparisons are made in the South
Kearny, Boston, Philadelphia, Baltimore and Syracuse Lanes. This cost
reflects the lift cost experienced by LTS at the Union Pacific Chicago
area terminal when Containers are moved empty from the foregoing
points to Chicago, IL. CSXI implicitly includes comparable cost at its
Bedford Park or 00/xx/ Xxxxxx Terminals when moving empty Containers
from the foregoing points to Chicago, IL.
5. A revenue component, stated in whole dollars, will be added to
the EMP and NACS eastbound and westbound rates that is reflective of
the then current average Equipment use charges assessed by CSXI under
the EMP/NACS products to customers who use those products. This use
charge is assessed for the time the Container and Chassis are in the
possession of the customer or his drayman. The average Equipment use
charges will be specific to each Lane and direction under the
comparison will be derived from data secured under the provisions of
Paragraph B.2.4 below. As an example, if the current Equipment use
charge is $13.25 per day, and the average number of days that the
Equipment is held in possession of the customer is 3.3 days for
westbound loads. Then $44 will be added to the westbound EMP/NACS rate
for that specific Lane. ($13.25 X 3.3 = $44 rounded)
6. EMP/NACS customers may be assessed drop off charges for
terminating empty Containers at a surplus point and may be granted a
rate reduction credit for loading Containers from a surplus point. The
average drop off charges and or
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credits incurred by CSXI for each individual Lane will be calculated
as provided in Paragraph B.2.4. The resulting average drop off charges
will be added to the eastbound EMP/NACS rates and the resulting
average credits will be deducted from the westbound EMP/NACS rates.
7. A charge of $5 per Container will be deducted from both the
eastbound and westbound EMP/NACS loaded rates. Such charge reflects
the general administrative cost to CSXI associated with the movement
of Containers in Transcontinental Domestic Service.
8. The parties recognize that some shipments moving in eastbound or
westbound Transcontinental rail service require motor carrier movement
at Chicago, IL in order to interchange the shipment between CSXI and
the western rail carriers ("Cross-town Service"). CSXI charges its
customers for this service under the EMP and NACS products, whereas
LTS pays these costs as part of its overall service. As such, to the
extent that CSXI assesses charges for Cross-town Service, those
charges will be excluded from the round-trip comparisons made under
the provisions of this Part B of Exhibit 9.2.
9. The parties further recognize that LTS has greater efficiencies
with respect to its overall costs due to the higher volume of
intermodal traffic moved by LTS and the size/scope of the LTS network.
In recognition of this aspect, $20 will be deducted from the
round-trip EMP and NACS rates prior to the comparison.
10. The cost or revenue factors specified in subparagraphs 1-9 of this
Paragraph B.2.3 will be added to or subtracted from the specified LTS
or EMP/NACS westbound loaded and empty rates and the result will be
multiplied by their respective percentages (stated as a decimal
factor) derived under subparagraph 3 of Paragraph B.2.5.
11. The cost or revenue factors specified in subparagraphs 1-9 of the
Paragraph B.2.3 will be added to or subtracted from the specified LTS
or EMP/NACS eastbound loaded rates. The resulting totals will then be
added to the respective LTS or EMP/NACS westbound loaded and empty
factors derived under the foregoing subparagraph 10. The sum of the
LTS eastbound rate and westbound factors ("LTS R/T Rate") will be
compared to the sum of the EMP/NACS eastbound rate and westbound
factors ("EMP/NACS R/T Rate"). To the extent the EMP/NACS R/T Rate is
lower than the LTS R/T Rate, rate adjustments will be made as provided
in Paragraph B.3.
B.2.4 12 Month EMP/NACS Data Analysis. The adjustment to rates
provided in the foregoing Paragraph B.2.3. subparagraph 3, 5 and 6 are based on
EMP/NACS statistics that may change over time. On January 1 of each year of the
Agreement, CSXI will acquire the necessary statistics for the prior calendar
year from the REZ1 computer system or other system used by CSXI and other
participating rail carriers to manage the EMP/NACS equipment pool. The cost
components derived each January 1 will be used for all comparisons made during
that calendar year.
Confidential
B.2.5 Round-trip Load/Empty Comparison. The parties recognize that
most Lanes have more loaded volume in one direction as compared to the opposite
direction and that the imbalance requires the movement of empty Containers from
surplus locations to deficit locations, which is known as empty repositioning.
The parties also recognize that the cost of empty repositioning must be
accounted for in the round-trip movements for each Lane. LTS pays CSXI a rate
for the movement of empty Containers whereas CSXI absorbs its own cost
associated with empty Container movement. In recognition of these factors, the
parties have devised the process below to determine and apply the factors of
loaded versus empty volumes and related LTS costs to the comparison process:
1. On January 1 of each year, the eastbound loaded volumes, the
westbound loaded volumes and the westbound empty volumes of each of LTS and
EMP/NACS during the prior calendar year will be determined separately for
each Lane and size of Container for which a comparison is made.
2. The LTS and EMP/NACS westbound empties for each Lane and size of
Container will be divided by the eastbound loads for that size of Container
during the prior year. The resulting factor will reflect the percent of
westbound empties moved in that Lane. The resulting empty percentage will
be subtracted from 100% to determine the percentage of westbound loads for
that Lane.
3. The LTS and EMP/NACS westbound percentages derived in the foregoing
paragraph will be added together and divided by 2 in order to derive an
average from the combined LTS and EMP/NACS volumes. As an example, if the
LTS westbound empty percentage is 20% and the EMP/NACS westbound empty
percentage is 30%, then the average between the two would be 25% (20 + 30 =
50 / 2 = 25)
B.3 Rate Adjustment. In the event that the EMP/NACS R/T Rate is lower than
the LTS R/T Rate, then CSXI will either, (i) reduce the LTS rates by the dollar
amount of difference or (ii) increase the EMP/NACS rates by the dollar amount of
difference or more. As an alternative, CSXI may both reduce the LTS rates and
increase the EMP/NACS rates. In such an event, the LTS rate will be reduced by
the difference between the dollar amount of increase to the EMP/NACS rates and
the total dollar amount that the EMP/NACS rate was initially lower than the LTS
rate. As an example, if the initial dollar difference between the rates was $30,
and CSXI elected to increase the EMP/NACS rate by $10, then CSXI would reduce
the LTS rates by $20. Adjustment to the LTS rates will be made using the
methodologies specified in Paragraphs A.11, A.12 and A.13 of this Exhibit.
Should CSXI elect to increase the EMP/NACS rates as a remedy, CSXI will have 45
days from the date that the comparison analysis is completed in which to
increase the rate(s). This 45 day period will be added to any Mirror Period that
may apply as provided in Paragraph A.11 of this Exhibit.
B.4 Example. An example of the application of the foregoing Paragraph B
formula and calculations is set forth below.
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EXAMPLE
APL Base Rate EMP/NACS Base Rate
------------- ------------------
Westbound Load $350 $ 412
Westbound Empty $102 $ -0-
Xxxxxxxxx Load $571 $ 650
Adjustments Made to Base Rates
APL EMP
--- ---
Equipment Ownership Costs
Westbound Load $ 50 $ -0-
Xxxxxxxxx Load $ 50 $ -0-
Global 1 Lift
Westbound Empty $ 28 $ -0-
Equipment Use Charges
Westbound Load: 3.3 days $ -0- $ 44
Eastbound Load: 4.8 days $ -0- $ 64
Pick-Up Credit
Westbound Load $ -0- ($25)
Drop-Off Charge
Eastbound Load $ -0- $ 50
Administrative Costs
Westbound Load $ -0 $ (5)
Eastbound Load $ -0- $ (5)
Cross-Town Service $ -0- $ 0
Efficiency Adjustment $ (20)
Round-trip comparable charges APL EMP Variance
--- --- --------
$913 $1003 $90
The Round-trip comparable charges for APL of $913 = ((westbound loaded rate
($350) + westbound loaded adjustments ($50) x % of westbound loaded units (60%))
+ ((westbound empty rate ($102) + westbound empty adjustments($28)) x % of
westbound empty units (40%)) + (eastbound loaded rate ($571) + eastbound loaded
adjustments ($50))
Round-trip comparable charges for EMP of $1003 = ((westbound loaded rate ($412)
+ westbound loaded adjustments ($44-$25-$5)) x % of westbound loaded units (60%)
+ ((westbound empty rate ($0)+ westbound empty adjustments ($0)) x % of
westbound empty units (40%)) + (eastbound loaded rate ($650) + eastbound loaded
adjustments ($64+$50-$5))-Efficiency Factor ($20)
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Adjustment Explanations
Average LTS and EMP/NACS Westbound loaded percentage 60%
Average LTS and EMP/NACS Westbound empty percentage 40%
Equipment Cost
CSXI/EMP Equipment cost per load was calculated using the prior year's data
dividing total Equipment costs by number of loads. Added to APL rates.
Global One Lift
This cost reflects the lift cost experienced by LTS at the Union Pacific Chicago
area terminal when Containers are moved empty from the foregoing points to
Chicago, IL. Assumes that this example involves a move from the South Kearny,
Boston, Philadelphia, Baltimore and Syracuse Lanes to Chicago, IL.
Equipment Use Charge
For purposes of this example, EMP Daily Charge was assumed to be $13.25. Street
days are EMP accurate from prior annual period, split for eastbound and
westbound, and specific to the Lane in question.
Drop off and Pick Up Charges
For purposes of this example, a $50 drop charge and $25 pickup credit at most
ramps was used. Uses averages from prior annual period. Terminal specific.
Administrative Charges
This charge reflects the general administrative cost to CSXI associated with the
movement of Containers in Transcontinental Domestic Service.
Cross-town Service
In this example, CSXI assessed a Cross-Town Service charge from the EMP customer
and this charge was excluded from the comparison in accordance with Paragraph
B.2.3(8).
Efficiency Adjustment
This charge reflects the efficiency adjustment agreed to under Paragraph
B.2.3(9) and is applied on a round-trip basis.
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EXHIBIT 9.3
EXAMPLE OF COMPETITIVE PROPOSAL CALCULATION
FOR TRANSCONTINENTAL DOMESTIC CONTAINERS
Explanation of Footnotes to Examples of Section 9.3 of Appendix 9 Calculations
(1) The figures in this column represent the CSXI Zone Compliance Amount
referred to in Section 9.3.2(a)(ix) of Appendix 9 derived by adding the CSXI
Lane Compliance Amounts for the Lanes between Los Angeles and Points A, B and C
in Eastern Zone 5 (Southeast) served by the same requested Gateway.
(2) The figures in this column represent the LTS Zone Compliance Amount
referred to in Section 9.3.3(a)(ii) of Appendix 9 derived by adding the LTS Lane
Compliance Amounts for the Lanes between Los Angeles and Points A, B and C in
Eastern Zone 5 served by the same requested Gateway.
(3) The figures in this row under the columns entitled "East-48'" and
"West-48'" represent the CSXI Eastbound Revenues referred to in Section
9.3.2(b)(ii) of Appendix 9 and the CSXI Westbound Revenue referred to in Section
9.3.2(b)(i) of Appendix 9, respectively.
(4) The figures in this row under the columns entitled "East-48'" and
"West-48'" represent the LTS Eastbound Revenue referred to in Section
9.3.3(b)(ii) of Appendix 9 and the LTS Westbound Revenue referred to in Section
9.3.3(b)(i) of Appendix 9, respectively.
(5) The figures in this row under the columns entitled "East-48'", "West-48'"
and "Round-Trip" represent the CSXI Eastbound Average Price referred to in
Section 9.3.2(b)(ii) of Appendix 9, the CSXI Westbound Average Price referred to
in Section 9.3.2(b)(i) of Appendix 9 and the CSXI Round-Trip Average Price
referred to in Section 9.3.2(b)(iii) of Appendix 9, respectively.
(6) The figures in this row under the columns entitled "East-48'", "West-48'"
and "Round-Trip" represent the LTS Eastbound Average Price referred to in
Section 9.3.3(b)(ii) of Appendix 9, the LTS Westbound Average Price referred to
in Section 9.3.3(b)(i) of Appendix 9 and the LTS Round-Trip Average Price
referred to in Section 9.3.3(b)(iii) of Appendix 9, respectively.
(7) The figures in this row under the columns entitled "East-48'" and
"West-48'" represent LTS' Eastbound Western Cost referred to in Section
9.3.2(a)(ii) of Appendix 9 and LTS' Westbound Western Cost referred to in
Section 9.3.2(a)(i) of Appendix 9, respectively.
(8) The figures in this row under the columns entitled "East-48'" and
"West-48'" represent CSXI's Eastbound Western Cost referred to in Section
9.3.2(a)(ii) of Appendix 9 and CSXI's Westbound Western Cost referred to in
Section 9.3.2(a)(i) of Appendix 9, respectively.
Confidential
(9) The figure in the first "East-48'" column in this row represents the
Eastbound Eastern Cost referred to in Section 9.3.2(a)(iv) of Appendix 9 derived
by dividing the total linehaul charges payable by LTS under this Agreement for
that size of Transcontinental Domestic Container moving westbound to the Gateway
in question from Point A in Eastern Zone 5 by LTS' total volume shown above of
that size of Transcontinental Domestic Container moving in that westbound
direction from Point A in Eastern Zone 5 to the Gateway. The figure in the first
"West-48'" column represents the Westbound Eastern Cost referred to in Section
9.3.2(a)(iii) of Appendix 9 derived by dividing the total linehaul charges
payable by LTS under this Agreement for that size of Transcontinental Domestic
Container moving eastbound from the Gateway in question to Point A in Eastern
Zone 5 by LTS' total volume shown above of that size of Transcontinental
Domestic Container moving in that eastbound direction to Point A in Eastern Zone
5 from the Gateway. The other columns represent the same calculations to and
from Points B and C in Eastern Zone 5.
(10) The figures in these columns represent the lower of LTS' or CSXI's
Eastbound Western Cost referred to in Section 9.3.2(a)(ii) of Appendix 9 and the
lower of LTS' or CSXI's Westbound Western Cost referred to in Section
9.3.2(a)(i) of Appendix 9. The lowest of CSXI's or LTS' Westbound or Eastbound
Western Costs are used in the calculations required under Sections 9.3.2(a)(v)
of Appendix 9 and 9.3.2(a)(vi) of Appendix 9, respectively.
(11) The calculation in the column entitled "East-48'" represents the "CSXI
Eastbound Floor" and reflects the calculation required in Sections 9.3.2(a)(vi)
of Appendix 9. The calculation in the column entitled "West-48'" represents the
"CSXI Westbound Floor" and reflects the calculation required Section 9.3.2(a)(v)
of Appendix 9. The calculation in the column entitled "Round Trip" represents
the "CSXI Lane Floor" and reflects the calculation required in Section
9.3.2(a)(vii) of Appendix 9.
(12) The calculation in the column entitled "East-48'" represents the "LTS
Eastbound Floor" and reflects the calculation required in Section 9.3.2(a)(vi)
of Appendix 9. The calculation in the column entitled "West-48'" represents the
LTS Westbound Floor and reflects the calculation required Section 9.3.2(a)(v) of
Appendix 9. The calculation in the column entitled "Round Trip" represents the
"LTS Lane Floor" and reflects the calculation required in Section 9.3.2(a)(vii)
of Appendix 9.
(13) The calculations in the column entitled "East-48'" represents the "CSXI
Eastbound Compliance Amount". The calculation in the column entitled "West-48'"
represents the "CSXI Westbound Compliance Amount". The calculation in the column
entitled "Round Trip" represents the "CSXI Lane Compliance Amount." Section
9.3.2(a)(viii) of Appendix 9 sets forth the method for determining these
Compliance Amounts.
(14) The calculations in the column entitled "East-48'" represents the "LTS
Eastbound Compliance Amount". The calculation in the column entitled "West-48'"
represents the "LTS Westbound Compliance Amount". The calculation in the column
entitled "Round Trip" represents the "LTS Lane Compliance Amount." Section
9.3.3(a)(i) of Appendix 9 sets forth the method for determining these Compliance
Amounts.
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Zone Compliance- All
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance Lowest one-way western average rate applies in floor calculation Zone
Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? Yes LTS Zone Compliance Yes
CSXI Zone Compliance Amount (1) $ 1,400 LTS Zone Compliance Amount (2) $ 1,525
I.A/A I.A/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00
---------- ---------- ----------- ---------- ----------
CSXI's 3-month Revenue (3) $3,800,000 $3,400,000 $ 7,200,000 $3,300,000 $3,200,000
LTS's 3-month Revenue (4) $9,000,000 $6,800,000 $15,800,000 $7,500,000 $6,800,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000
LTS 3 month Volume 5,000 4,000 9,000 5,000 4,000
CSXI Average Prices in Market (5) $ 1,900 $ 1,700 $ 3,600 $ 1,650 $ 1,600
LTS' Average Prices in Market (6) $ 1,800 $ 1,700 $ 3,500 $ 1,500 $ 1,700
LTS net revenue to western roads/unit (7) $ 725 $ 875 $ 1,600 $ 800 $ 900
CSXI net revenue to western roads/unit (8) $ 700 $ 900 $ 1,600 $ 850 $ 975
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400 $ 300 $ 100
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00 $ 12.00 $ 13.00
LTS 3-month Payments to CSXI $2,500,000 $1,600,000 $ 4,100,000 $2,500,000 $2,000,000
LTS' Average Rate on CSXI (9) $ 500 $ 400 $ 900 $ 500 $ 500
Lowest net Revenue to western road (10) $ 700 $ 875 $ 1,575 $ 800 $ 900
CSXI Floor (11) $ 1,512 $ 1,388 $ 2,900 $ 1,612 $ 1,513
LTS Floor (12) $ 1,500 $ 1,375 $ 2,875 $ 1,600 $ 1,500
CSXI Lane Compliance? Yes
CSXI Lane Compliance Amount (13) $ 388 $ 312 $ 700 $ 38 $ 00
XXXX Xxxx Compliance? Yes
CSXI Lane Compliance Amount (13) $ 300 $ 325 $ 625 -$ 100 $ 200
I.A/C
CSXI Zone Compliance?
CSXI Zone Compliance Amount (1) Round Trip East-48 West-48 Round Trip
----------- ---------- ---------- -----------
CSXI's 3-month Revenue (3) $ 6,500,000 $3,400,000 $3,800,000 $ 7,200,000
LTS's 3-month Revenue (4) $14,300,000 $9,000,000 $8,000,000 $17,000,000
CSXI 3 month Volume 4,000 2,000 2,000 4,000
LTS 3 month Volume 9,000 5,000 4,000 9,000
CSXI Average Prices in Market (5) $ 3,250 $ 1,700 $ 1,900 $ 3,600
LTS' Average Prices in Market (6) $ 3,200 $ 1,800 $ 2,000 $ 3,800
LTS net revenue to western roads/unit (7) $ 1,700 $ 750 $ 950 $ 1,700
CSXI net revenue to western roads/unit (8) $ 1,825 $ 700 $ 900 $ 1,600
Zone Cost Factor (see Exh 9.3.2) $ 400 $ 300 $ 100 $ 400
LTS Efficiency Factor $ 25.00 $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $ 4,500,000 $2,500,000 $2,000,000 $ 4,500,000
LTS' Average Rate on CSXI (9) $ 1,000 $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 1,700 $ 700 $ 900 $ 1,600
CSXI Floor (11) $ 3,125 $ 1,512 $ 1,513 $ 3,025
LTS Floor (12) $ 3,100 $ 1,500 $ 1,500 $ 3,000
CSXI Lane Compliance? Yes Yes
CSXI Lane Compliance Amount (13) $ 125 $ 188 $ 387 $ 000
XXXX Xxxx Compliance? Yes Yes
CSXI Lane Compliance Amount (13) $ 100 $ 300 $ 500 $ 800
Exhibit 1 of 8
Zone in Compliance - part
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance Lowest one-way western average rate applies in floor calculation Zone
Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? Yes LTS Zone Compliance Yes
CSXI Zone Compliance Amount (1) $1,150 LTS Zone Compliance Amount (2) $1,525
I.A/A I.A/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00 Round Trip
----------- ----------- ------------ ----------- ----------- ------------
CSXI's 3-month Revenue (3) $3,800,000 $3,400,000 $ 7,200,000 $2,800,000 $3,200,000 $ 6,000,000
LTS's 3-month Revenue (4) $9,000,000 $6,800,000 $15,800,000 $7,500,000 $6,800,000 $14,300,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000 4,000
LTS 3 month Volume 5,000 4,000 9,000 5,000 4,000 9,000
CSXI Average Prices in Market (5) $ 1,900 $ 1,700 $ 3,600 $ 1,400 $ 1,600 $ 3,000
LTS' Average Prices in Market (6) $ 1,800 $ 1,700 $ 3,500 $ 1,500 $ 1,700 $ 3,200
LTS net revenue to western roads/unit (7) $ 725 $ 875 $ 1,600 $ 800 $ 900 $ 1,700
CSXI net revenue to western roads/unit (8) $ 700 $ 900 $ 1,600 $ 850 $ 975 $ 1,825
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400 $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00 $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,500,000 $1,600,000 $ 4,100,000 $2,500,000 $2,000,000 $ 4,500,000
LTS' Average Rate on CSXI (9) $ 500 $ 400 $ 900 $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 700 $ 875 $ 1,575 $ 800 $ 900 $ 1,700
CSXI Floor (11) $ 1,512 $ 1,388 $ 2,900 $ 1,612 $ 1,513 $ 3,125
LTS Floor (12) $ 1,500 $ 1,375 $ 2,875 $ 1,600 $ 1,500 $ 3,100
CSXI Lane Compliance? Yes No
CSXI Lane Compliance Amount (13) $ 388 $ 312 $ 700 -$212 $ 87 -$125
CSXI Lane Compliance? Yes Yes
CSXI Lane Compliance Amount (13) $ 300 $ 325 $ 625 -$100 $ 200 $ 100
CSXI Zone Compliance? Auditor seeks NO remedy
CSXI Zone Compliance Amount (1)
I.A/C
East-48 West-48 Round Trip
----------- ----------- ------------
CSXI's 3-month Revenue (3) $3,400,000 $3,800,000 $ 7,200,000
LTS's 3-month Revenue (4) $9,000,000 $8,000,000 $17,000,000
CSXI 3 month Volume 2,000 2,000 4,000
LTS 3 month Volume 5,000 4,000 9,000
CSXI Average Prices in Market (5) $ 1,700 $ 1,900 $ 3,600
LTS' Average Prices in Market (6) $ 1,800 $ 2,000 $ 3,800
LTS net revenue to western roads/unit (7) $ 750 $ 950 $ 1,700
CSXI net revenue to western roads/unit (8) $ 700 $ 900 $ 1,600
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,500,000 $2,000,000 $ 4,500,000
LTS' Average Rate on CSXI (9) $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 700 $ 900 $ 1,600
CSXI Floor (11) $ 1,512 $ 1,513 $ 3,025
LTS Floor (12) $ 1,500 $ 1,500 $ 3,000
CSXI Lane Compliance? Yes
CSXI Lane Compliance Amount (13) $ 188 $ 387 $ 000
XXXX Xxxx Compliance? Yes
CSXI Lane Compliance Amount (13) $ 300 $ 500 $ 800
Exhibit 2 of 8
Zone CSXI Not in Compliance
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance Lowest one-way western average rate applies in floor calculation Zone
Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? No LTS Zone Compliance Yes
CSXI Zone Compliance Amount (1) $400 LTS Zone Compliance Amount (2) $1,235
I.A/A I.A/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00 Round Trip
------------ ------------ ------------ ------------ ------------ ------------
CSXI's 3-month Revenue (3) $ 3,000,000 $ 2,600,000 $ 5,600,000 $ 2,800,000 $ 3,200,000 $ 6,000,000
LTS's 3-month Revenue (4) $ 9,000,000 $ 6,800,000 $15,800,000 $ 7,500,000 $ 6,800,000 $14,300,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000 4,000
LTS 3 month Volume 5,000 4,000 9,000 5,000 4,000 9,000
CSXI Average Prices in Market (5) $ 1,500 $ 1,300 $ 2,800 $ 1,400 $ 1,600 $ 3,000
LTS' Average Prices in Market (6) $ 1,800 $ 1,700 $ 3,500 $ 1,500 $ 1,700 $ 3,200
LTS net revenue to western roads/unit (7) $ 725 $ 875 $ 1,600 $ 800 $ 900 $ 1,700
CSXI net revenue to western roads/unit (8) $ 700 $ 900 $ 1,600 $ 850 $ 975 $ 1,825
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400 $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00 $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $ 2,500,000 $ 1,600,000 $ 4,100,000 $ 2,500,000 $ 2,000,000 $ 4,500,000
LTS' Average Rate on CSXI (9) $ 500 $ 400 $ 900 $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 700 $ 875 $ 1,575 $ 800 $ 900 $ 1,700
CSXI Floor (11) $ 1,512 $ 1,388 $ 2,900 $ 1,612 $ 1,513 $ 3,125
LTS Floor (12) $ 1,500 $ 1,375 $ 2,875 $ 1,600 $ 1,500 $ 3,100
CSXI Lane Compliance? No No
CSXI Lane Compliance Amount (13) -$12 $ 88 $ 100 -$212 $ 87 -$125
CSXI Lane Compliance? Yes Yes
CSXI Lane Compliance Amount (13) $ 300 $ 325 $ 625 -$100 $ 200 $ 100
CSXI Zone Compliance? Auditor seeks remedy against CSX only
CSXI Zone Compliance Amount (1)
I.A/C
East-48 West-4 8 Round Trip
------------ ------------ ------------
CSXI's 3-month Revenue (3) $ 3,200,000 $ 3,800,000 $ 7,000,000
LTS's 3-month Revenue (4) $ 9,000,000 $ 8,000,000 $17,000,000
CSXI 3 month Volume 2,000 2,000 4,000
LTS 3 month Volume 5,000 4,000 9,000
CSXI Average Prices in Market (5) $ 1,600 $ 1,900 $ 3,500
LTS' Average Prices in Market (6) $ 1,800 $ 2,000 $ 3,800
LTS net revenue to western roads/unit (7) $ 900 $ 1,125 $ 2,025
CSXI net revenue to western roads/unit (8) $ 890 $ 1,000 $ 1,890
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $ 2,500,000 $ 2,000,000 $ 4,500,000
LTS' Average Rate on CSXI (9) $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 890 $ 1,000 $ 1,890
CSXI Floor (11) $ 1,702 $ 1,613 $ 3,315
LTS Floor (12) $ 1,690 $ 1,600 $ 3,290
CSXI Lane Compliance? Yes
CSXI Lane Compliance Amount (13) $ 102 $ 287 $ 000
XXXX Xxxx Compliance? Yes
CSXI Lane Compliance Amount (13) $ 110 $ 400 $ 510
In this lane, CSXI is $100 below its round In this lane, CSXI is $125 below its round
trip floor. We would apply a rate reduction trip floor. We would apply a rate reduction
to LTS' rate proportionately. In this case, to LTS' rate proportionately. In this case,
5/9 of reduction to E/B, 4/9 to W/B half of reduction to E/B, half to W/B
$100 $125
LTS new rates for 3 month period LTS new rates for 3 month period
E/B W/B R/I F/B W/B R/I
$444 $356 $800 $438 $438 $875
Exhibit 3 of 8
Zone APL Not in Compliance
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? Yes LTS Zone Compliance No
CSXI Zone Compliance Amount (1) $10 LTS Zone Compliance -$75
Amount (2)
I.A/A I.A/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00 Round Trip
------------ ------------ -------------- ------------ ------------ -------------
CSXI's 3-month Revenue (3) $3,000,000 $2,800,000 $ 5,800,000 $3,200,000 $3,100,000 $ 6,300,000
LTS's 3-month Revenue (4) $7,400,000 $5,400,000 $12,800,000 $7,900,000 $5,960,000 $13,860,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000 4,000
LTS 3 month Volume 5,000 4,000 9,000 5,000 4,000 9,000
CSXI Average Prices in Market (5) $ 1,500 $ 1,400 $ 2,900 $ 1,600 $ 1,550 $ 3,150
LTS' Average Prices in Market (6) $ 1,480 $ 1,350 $ 2,830 $ 1,580 $ 1,490 $ 3,070
LTS net revenue to western roads/unit (7) $ 725 $ 875 $ 1,600 $ 800 $ 900 $ 1,700
CSXI net revenue to western roads/unit (8) $ 700 $ 900 $ 1,600 $ 850 $ 975 $ 1,825
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400 $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00 $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,500,000 $1,600,000 $ 4,100,000 $2,500,000 $2,000,000 $ 4,500,000
LTS' Average Rate on CSXI (9) $ 500 $ 400 $ 900 $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 700 $ 875 $ 1,575 $ 800 $ 900 $ 1,700
CSXI Floor (11) $ 1,512 $ 1,388 $ 2,900 $ 1,612 $ 1,513 $ 3,125
LTS Floor (12) $ 1,500 $ 1,375 $ 2,875 $ 1,600 $ 1,500 $ 3,100
CSXI Lane Compliance? Yes Yes
CSXI Lane Compliance Amount (13) -$ 12 $ 12 $ 0 -$ 12 $ 37 $ 00
XXXX Xxxx Compliance? No Ni
CSXI Lane Compliance Amount (13) -$ 20 -$ 25 $ 45 -$ 20 -$ 10 $ 30
In this lane, LTS is below its round trip In this lane, API is below its round
floor. We would apply a rate increase to trip floor. We would apply a rate
LTS' rate proportionately. reduction to LTS' rate proportionately.
$45 $30
LTS new rates for 3 month period LTS new rates for 3 month period
E/B W/B R/I F/B W/B R/I
$525 $420 $945 $515 $515 $1,030
CSXI Zone Compliance? Auditor seeks remedy against LTS
CSXI Zone Compliance Amount (1)
I.A/C
East-48 West-48 Round Trip
------------ ------------ -------------
CSXI's 3-month Revenue (3) $3,300,000 $3,500,000 $ 6,600,000
LTS's 3-month Revenue (4) $8,450,000 $6,400,000 $14,850,000
CSXI 3 month Volume 2,000 2,000 4,000
LTS 3 month Volume 5,000 4,000 9,000
CSXI Average Prices in Market (5) $ 1,650 $ 1,650 $ 3,300
LTS' Average Prices in Market (6) $ 1,690 $ 1,600 $ 3,290
LTS net revenue to western roads/unit (7) $ 900 $ 1,125 $ 2,025
CSXI net revenue to western roads/unit (8) $ 890 $ 1,000 $ 1,890
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,500,000 $2,000,000 $ 4,500,000
LTS' Average Rate on CSXI (9) $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 890 $ 1,000 $ 1,890
CSXI Floor (11) $ 1,702 $ 1,613 $ 3,315
LTS Floor (12) $ 1,690 $ 1,600 $ 3,290
CSXI Lane Compliance? Nos
CSXI Lane Compliance Amount (13) $ 52 $ 37 $ 00
XXXX Xxxx Compliance? Yes
CSXI Lane Compliance Amount (13) $ 0 $ 0 $ 0
Exhibit 4 of 8
LTS is Bad, CSXI Worse
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? No LTS Zone Compliance No
CSXI Zone Compliance Amount (1) -$614 LTS Zone Compliance Amount (2) -$425
I.A/A I.A/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00 Round Trip
-------- --------- ----------- --------- --------- -----------
CSXI's 3-month Revenue (3) $3,000,000 $2,700,000 $ 5,700,000 $3,026,000 $2,826,000 $ 5,852,000
LTS's 3-month Revenue (4) $5,800,000 $5,200,000 $11,000,000 $6,000,000 $5,600,000 $11,600,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000 4,000
LTS 3 month Volume 4,000 4,000 8,000 4,000 4,000 8,000
CSXI Average Prices in Market (5) $ 1,500 $ 1,350 $ 2,850 $ 1,513 $ 1,413 $ 2,926
LTS' Average Prices in Market (6) $ 1,450 $ 1,300 $ 2,750 $ 1,500 $ 1,400 $ 2,900
LTS net revenue to western roads/unit (7) $ 725 $ 875 $ 1,600 $ 800 $ 900 $ 1,700
CSXI net revenue to western roads/unit (8) $ 700 $ 900 $ 1,600 $ 850 $ 975 $ 1,825
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400 $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00 $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,500,000 $1,600,000 $ 3,600,000 $2,500,000 $2,000,000 $ 4,000,000
LTS' Average Rate on CSXI (9) $ 500 $ 400 $ 900 $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 700 $ 875 $ 1,575 $ 890 $ 900 $ 1,700
CSXI Floor (11) $ 1,512 $ 1,388 $ 2,900 $ 1,612 $ 1,513 $ 3,125
LTS Floor (12) $ 1,500 $ 1,375 $ 2,875 $ 1,600 $ 1,500 $ 3,100
CSXI Lane Compliance? No No
CSXI Lane Compliance Amount (13) -$ 12 $ 38 -$ 50 -$ 99 $ 100 -$ 000
XXXX Xxxx Compliance? No N0
CSXI Lane Compliance Amount (13) -$ 50 -$ 75 -$ 125 -$ 100 -$ 100 -$ 200
In this lane, LTS is below its round In this lane, LTS and CSXI are below
trip floor but so is CSXI. Auditor their round trip floors equally.
would increase LTS' rate proportionately Therefore, rates will not be changed.
by the difference between LTS' price and
its floor and CSXI's price and its floor.
LTS below floor by $125 LTS below floor by $200
CSXI below floor by $ 50 CSXI below floor by $200
Net Change to LTS Rate $ 75 Net Change to LTS Rate $ 0
LTS new rates for 3 month period LTS new rates for 3 month period
E/B W/B R/I F/B W/B R/I
$542 $433 $975 $368 $368 $375
CSXI Zone Compliance? Auditor seeks remedy against LTS
CSXI Zone Compliance Amount (1)
I.A/C
East-48 West-48 Round Trip
------- ------- ----------
CSXI's 3-month Revenue (3) $3,100,000 $2,800,000 $ 5,900,000
LTS's 3-month Revenue (4) $6,560,000 $6,200,000 $12,760,000
CSXI 3 month Volume 2,000 2,000 4,000
LTS 3 month Volume 4,000 4,000 8,000
CSXI Average Prices in Market (5) $ 1,550 $ 1,400 $ 2,950
LTS' Average Prices in Market (6) $ 1,640 $ 1,550 $ 3,190
LTS net revenue to western roads/unit (7) $ 900 $ 1,125 $ 2,025
CSXI net revenue to western roads/unit (8) $ 890 $ 1,000 $ 1,890
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,000,000 $2,000,000 $ 4,000,000
LTS' Average Rate on CSXI (9) $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 890 $ 1,000 $ 1,890
CSXI Floor (11) $ 1,702 $ 1,613 $ 3,315
LTS Floor (12) $ 1,690 $ 1,600 $ 3,290
CSXI Lane Compliance? Nos
CSXI Lane Compliance Amount (13) -$ 152 -$ 213 $ 000
XXXX Xxxx Compliance? No
CSXI Lane Compliance Amount (13) $ 50 -$ 50 -$ 100
In this lane, LTS is below its round trip floor but
so is CSXI. Auditor would decrease LTS' rate
proportionately by the difference between LTS'
price and its floor and CSXI's price and its floor.
LTS below floor by $ 100
CSXI below floor by $ 365
Net Change to LTS Rate ($265)
Exhibit 5 of 8
CSXI Bad, LTS is Worse
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? No LTS Zone Compliance No
CSXI Zone Compliance Amount (1) -$450 LTS Zone Compliance Amount (2) -$500
I.A/A I.A/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00 Round Trip
---------- ---------- ----------- ---------- --------- -----------
CSXI's 3-month Revenue (3) $3,000,000 $2,700,000 $ 5,700,000 $3,026,000 $2,826,000 $ 5,852,000
LTS's 3-month Revenue (4) $5,600,000 $5,100,000 $10,700,000 $6,000,000 $5,600,000 $11,600,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000 4,000
LTS 3 month Volume 4,000 4,000 8,000 4,000 4,000 8,000
CSXI Average Prices in Market (5) $ 1,500 $ 1,350 $ 2,850 $ 1,513 $ 1,413 $ 2,926
LTS' Average Prices in Market (6) $ 1,400 $ 1,275 $ 2,675 $ 1,500 $ 1,400 $ 2,900
LTS net revenue to western roads/unit (7) $ 725 $ 875 $ 1,600 $ 800 $ 900 $ 1,700
CSXI net revenue to western roads/unit (8) $ 700 $ 900 $ 1,600 $ 850 $ 975 $ 1,825
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400 $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00 $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,000,000 $1,600,000 $ 3,600,000 $2,000,000 $2,000,000 $ 4,000,000
LTS' Average Rate on CSXI (9) $ 500 $ 400 $ 900 $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 700 $ 875 $ 1,575 $ 800 $ 900 $ 1,700
CSXI Floor (11) $ 1,512 $ 1,388 $ 2,900 $ 1,612 $ 1,513 $ 3,125
LTS Floor (12) $ 1,500 $ 1,375 $ 2,875 $ 1,600 $ 1,500 $ 3,100
CSXI Lane Compliance? No No
CSXI Lane Compliance Amount (13) -$ 12 $ 38 -$ 50 -$ 99 $ 100 $ 000
XXXX Xxxx Compliance? No N0
CSXI Lane Compliance Amount (13) -$ 100 -$ 100 -$ 200 -$ 100 -$ 100 -$ 200
In this lane, LTS is below its round trip In this lane, LTS and CSXI are below
floor but so is CSXI. Auditor would their round trip floors equally.
increase LTS' rate proportionately by the Therefore, rates will not be changed.
difference between LTS' price and its
floor and CSXI's price and its floor.
LTS below floor by $200 LTS below floor by $200
CSXI below floor by $ 50 CSXI below floor by $200
Net Change to LTS Rate $150 Net Change to LTS Rate $ 0
LTS new rates for 3 month period
E/B W/B R/I
$583 $467 $1,050
CSXI Zone Compliance? Auditor seeks remedy against CSX and LTS
CSXI Zone Compliance Amount (1)
I.A/C
East-48 West-48 Round Trip
---------- ---------- -----------
CSXI's 3-month Revenue (3) $3,206,000 $3,026,000 $ 6,232,000
LTS's 3-month Revenue (4) $6,560,000 $6,200,000 $12,760,000
CSXI 3 month Volume 2,000 2,000 4,000
LTS 3 month Volume 4,000 4,000 8,000
CSXI Average Prices in Market (5) $ 1,603 $ 1,513 $ 3,116
LTS' Average Prices in Market (6) $ 1,640 $ 1,550 $ 3,190
LTS net revenue to western roads/unit (7) $ 900 $ 1,125 $ 2,025
CSXI net revenue to western roads/unit (8) $ 890 $ 1,000 $ 1,890
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,000,000 $2,000,000 $ 4,000,000
LTS' Average Rate on CSXI (9) $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 890 $ 1,000 $ 1,890
CSXI Floor (11) $ 1,702 $ 1,613 $ 3,315
LTS Floor (12) $ 1,690 $ 1,600 $ 3,290
CSXI Lane Compliance? No
CSXI Lane Compliance Amount (13) -$ 99 -$ 100 $ 000
XXXX Xxxx Compliance? No
CSXI Lane Compliance Amount (13) -$ 50 -$ 50 -$ 100
In this lane, LTS is below its round trip
floor but so is CSXI. Auditor would
decrease LTS' rate proportionately by the
difference between LTS' price and its
floor and CSXI's price and its floor.
LTS below floor by $100
CSXI below floor by $200
Net Change to LTS Rate ($150)
LTS new rates for 3 month period
F/B W/B R/I
$450 $450 $900
Exhibit 6 of 8
CSXI Bad, LTS is a Lot Worse
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? No LTS Zone Compliance No
CSXI Zone Compliance Amount (1) $401 LTS Zone Compliance Amount (2) -$600
I.A/A I.A/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00 Round Trip
---------- ---------- ------------ ----------- ----------- ------------
CSXI's 3-month Revenue (3) $3,026,000 $2,776,000 $ 5,802,000 $3,026,000 $2,826,000 $ 5,852,000
LTS's 3-month Revenue (4) $5,600,000 $5,100,000 $10,700,000 $6,000,000 $5,600,000 $11,600,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000 4,000
LTS 3 month Volume 4,000 4,000 8,000 4,000 4,000 8,000
CSXI Average Prices in Market (5) $ 1,513 $ 1,388 $ 2,901 $ 1,513 $ 1,413 $ 2,926
LTS' Average Prices in Market (6) $ 1,400 $ 1,275 $ 2,675 $ 1,500 $ 1,400 $ 2,900
LTS net revenue to western roads/unit (7) $ 725 $ 875 $ 1,600 $ 800 $ 900 $ 1,700
CSXI net revenue to western roads/unit (8) $ 700 $ 900 $ 1,600 $ 850 $ 975 $ 1,825
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400 $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00 $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,000,000 $1,600,000 $ 3,600,000 $2,000,000 $2,000,000 $ 4,000,000
LTS' Average Rate on CSXI (9) $ 500 $ 400 $ 900 $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 700 $ 875 $ 1,575 $ 800 $ 900 $ 1,700
CSXI Floor (11) $ 1,512 $ 1,388 $ 2,900 $ 1,612 $ 1,513 $ 3,125
LTS Floor (12) $ 1,500 $ 1,375 $ 2,875 $ 1,600 $ 1,500 $ 3,100
CSXI Lane Compliance? Yes Yes
CSXI Lane Compliance Amount (13) $ 1 $ 0 $ 1 -$ 99 -$ 100 $ 000
XXXX Xxxx Compliance? No No
CSXI Lane Compliance Amount (13) -$ 100 -$ 100 -$ 200 -$ 100 -$ 100 -$ 200
In this lane, LTS is below its round In this lane, LTS and CSXI are below their
trip floor but so is CSXI. Auditor round trip floors equally. Therefore,
would apply a rate increase to LTS' rates will not be changed.
rate proportionately.
LTS below floor by $200 LTS below floor by $200
CSXI below floor by $ 50 CSXI below floor by $200
Net Change to LTS Rate $150 Net Change to LTS Rate $ 0
200
LTS new rates for 3 month period
E/B W/B R/I
$611 $489 $1,100
CSXI Zone Compliance? Auditor seeks remedy against CSX and LTS
CSXI Zone Compliance Amount (1)
I.A/C
East-48 West-48 Round Trip
----------- ---------- ---- -------
CSXI's 3-month Revenue (3) $3,206,000 $3,026,000 $ 6,232,000
LTS's 3-month Revenue (4) $6,360,000 $6,000,000 $12,360,000
CSXI 3 month Volume 2,000 2,000 4,000
LTS 3 month Volume 4,000 4,000 8,000
CSXI Average Prices in Market (5) $ 1,603 $ 1,513 $ 3,116
LTS' Average Prices in Market (6) $ 1,590 $ 1,500 $ 3,090
LTS net revenue to western roads/unit (7) $ 900 $ 1,125 $ 2,025
CSXI net revenue to western roads/unit (8) $ 890 $ 1,000 $ 1,890
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,000,000 $2,000,000 $ 4,000,000
LTS' Average Rate on CSXI (9) $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 890 $ 1,000 $ 1,890
CSXI Floor (11) $ 1,702 $ 1,613 $ 3,315
LTS Floor (12) $ 1,690 $ 1,600 $ 3,290
CSXI Lane Compliance? Yes
CSXI Lane Compliance Amount (13) -$ 99 -$ 100 $ 000
XXXX Xxxx Compliance? No
CSXI Lane Compliance Amount (13) -$ 100 -$ 100 -$ 200
In this lane, LTS and CSXI are below their
round trip floors equally. Therefore,
rates will not be changed.
LTS below floor by $ 100
CSXI below floor by $ 200
Net Change to LTS Rate ($100)
Exhibit 7 of 8
Equally Bad Behavior
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation Zone
Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? No LTS Zone Compliance No
CSXI Zone Compliance Amount (1) -$600 LTS Zone Compliance Amount (2) -$600
I.A/A I.A/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00 Round Trip
---------- ---------- ----------- ---------- ---------- -----------
CSXI's 3-month Revenue (3) $2,826,000 $2,576,000 $ 5,402,000 $3,026,000 $2,826,000 $ 5,852,000
LTS's 3-month Revenue (4) $5,600,000 $5,100,000 $10,700,000 $6,000,000 $5,600,000 $11,600,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000 4,000
LTS 3 month Volume 4,000 4,000 8,000 4,000 4,000 8,000
CSXI Average Prices in Market (5) $ 1,413 $ 1,288 $ 2,701 $ 1,513 $ 1,413 $ 2,926
LTS' Average Prices in Market (6) $ 1,400 $ 1,275 $ 2,675 $ 1,500 $ 1,400 $ 2,900
LTS net revenue to western roads/unit (7) $ 725 $ 875 $ 1,600 $ 800 $ 900 $ 1,700
CSXI net revenue to western roads/unit (8) $ 700 $ 900 $ 1,600 $ 850 $ 975 $ 1,825
Zone Cost Factor (see Exh 9.3.2) $ 300 $ 100 $ 400 $ 300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00 $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,000,000 $1,600,000 $ 3,600,000 $2,000,000 $2,000,000 $ 4,000,000
LTS' Average Rate on CSXI (9) $ 500 $ 400 $ 900 $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 700 $ 875 $ 1,575 $ 800 $ 900 $ 1,700
CSXI Floor (11) $ 1,512 $ 1,388 $ 2,900 $ 1,612 $ 1,513 $ 3,125
LTS Floor (12) $ 1,500 $ 1,375 $ 2,875 $ 1,600 $ 1,500 $ 3,100
CSXI Lane Compliance? No No
CSXI Lane Compliance Amount (13) -$ 99 -$ 100 -$ 200 -$ 99 -$ 100 -$ 000
XXXX Xxxx Compliance? No No
CSXI Lane Compliance Amount (13) -$ 100 -$ 100 -$ 200 -$ 100 -$ 100 -$ 200
In this lane, LTS is below its round trip In this lane, LTS and CSXI are below
floor but so is CSXI. Auditor would apply a their round trip floors equally.
rate increase to LTS' rate proportionately. Therefore, rates will not be changed.
CSXI Zone Compliance? Auditor seeks no remedy
CSXI Zone Compliance Amount (1)
I.A/C
East-48 West-48 Round Trip
---------- ---------- -----------
CSXI's 3-month Revenue (3) $3,206,000 $ 3,026,000 $ 6,232,000
LTS's 3-month Revenue (4) $6,360,000 $ 6,000,000 $12,360,000
CSXI 3 month Volume 2,000 2,000 4,000
LTS 3 month Volume 4,000 4,000 8,000
CSXI Average Prices in Market (5) $ 1,603 $ 1,513 $ 3,116
LTS' Average Prices in Market (6) $ 1,590 $ 1,500 $ 3,090
LTS net revenue to western roads/unit (7) $ 900 $ 1,125 $ 2,025
CSXI net revenue to western roads/unit (8) $ 890 $ 1,000 $ 1,890
Zone Cost Factor (see Exh 9.3.2) $300 $ 100 $ 400
LTS Efficiency Factor $ 12.00 $ 13.00 $ 25.00
LTS 3-month Payments to CSXI $2,000,000 $ 2,000,000 $ 4,000,000
LTS' Average Rate on CSXI (9) $ 500 $ 500 $ 1,000
Lowest net Revenue to western road (10) $ 890 $ 1,000 $ 1,890
CSXI Floor (11) $ 1,702 $ 1,613 $ 3,315
LTS Floor (12) $ 1,690 $ 1,600 $ 3,290
CSXI Lane Compliance? No
CSXI Lane Compliance Amount (13) -$ 99 -$ 100 -$ 000
XXXX Xxxx Compliance? No
CSXI Lane Compliance Amount (13) -$ 100 -$ 100 -$ 200
In this lane, LTS and CSXI are below their
round trip floors equally. Therefore,
rates will not be changed.
Exhibit 8 of 8
EXHIBIT 9.3.2
COST FACTORS
48 foot Containers 53 foot Containers
------------------ ------------------
Western Zone 1 and Eastern Zone 1: Eastbound $265 [TBD at a later date]
Westbound $188 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 2: Eastbound $251 [TBD at a later date]
Westbound $169 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 3: Eastbound $265 [TBD at a later date]
Westbound $188 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 4: Eastbound $223 [TBD at a later date]
Westbound $160 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 5: Eastbound $295 [TBD at a later date]
Westbound $175 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 1: Eastbound $317 [TBD at a later date]
Westbound $203 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 2: Eastbound $310 [TBD at a later date]
Westbound $189 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 3: Eastbound $317 [TBD at a later date]
Westbound $203 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 4: Eastbound $242 [TBD at a later date]
Westbound $207 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 5: Eastbound $367 [TBD at a later date]
Westbound $212 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 1: Eastbound $317 [TBD at a later date]
Westbound $209 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 2: Eastbound $297 [TBD at a later date]
Westbound $180 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 3: Eastbound $317 [TBD at a later date]
Westbound $209 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 4: Eastbound $234 [TBD at a later date]
Westbound $185 [TBD at a later date]
Xxxxxxx Xxxx 0 xxx Xxxxxxx Xxxx 5: Eastbound $345 [TBD at a later date]
Westbound $222 [TBD at a later date]
Confidential
These cost factors include amounts for the following types of costs: Equipment
ownership, maintenance and repair costs; terminal expenses; extra or secondary
lifts; variable administrative costs; refunds and incentives to customers; empty
repositioning costs and Cross-town services. Cost factors for 53 foot Containers
will be mutually agreed to at such time as CSXI has moved a sufficient number of
53 foot Containers in Transcontinental Domestic Service to determine the
appropriate amounts to be included in the cost factors.
Confidential
Zone In Compli All
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? Yes LTS Zone Compliance Yes
CSXI Zone Compliance Amount (1) $1,400 LTS Zone Compliance Amount (2) $1,525
LA/A LA/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00
------- ------- ---------- ------- -------
CSXI's 3-month Revenue (3) $3,800,000 $3,400,000 $7,200,000 $3,300,000 $3,200,000
LTS's 3-month Revenue (4) $9,000,000 $6,800,000 $15,800,000 $7,500,000 $6,800,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000
LTS 3 month Volume 5,000 4,000 9,000 5,000 4,000
CSXI Average Prices in Market (5) $1,900 $1,700 $3,600 $1,650 $1,600
LTS' Average Prices in Market (6) $1,800 $1,700 $3,500 $1,500 $1,700
LTS net revenue to western roads/unit (7) $725 $875 $1,600 $800 $900
CSXI net revenue to western roads/unit (8) $700 $900 $1,600 $850 $975
Zone Cost Factor (see Exh 9.3.2) $300 $100 $400 $300 $100
LTS Efficiency Factor $12.00 $13.00 $25.00 $12.00 $13.00
LTS 3-month Payments to CSXI $2,500,000 $1,600,000 $4,100,000 $2,500,000 $2,000,000
LTS Average Rate on CSXI (9) $500 $400 $900 $500 $500
Lowest net Revenue to western road (10) $700 $875 $1,575 $800 $900
CSXI Floor (11) $1,512 $1,388 $2,900 $1,612 $1,513
LTS Floor (12) $1,500 $1,375 $2,875 $1,600 $1,500
CSXI Lane Compliance? Yes
LTS Lane Compliance Amount (13) $388 $312 $700 $38 $87
LTS Lane Compliance? Yes
LTS Lane Compliance Amount (14) $300 $325 $625 -$100 $200
CSXI Zone Compliance?
CSXI Zone Compliance Amount (1)
LA/C
Round Trip East-48 West-48 Round Trip
---------- ------- ------- ----------
CSXI's 3-month Revenue (3) $6,500,000 $3,400,000 $3,800,000 $7,200,000
LTS's 3-month Revenue (4) $14,300,000 $9,000,000 $8,000,000 $17,000,000
CSXI 3 month Volume 4,000 2,000 2,000 4,000
LTS 3 month Volume 9,000 5,000 4,000 9,000
CSXI Average Prices in Market (5) $3,250 $1,700 $1,900 $3,600
LTS Average Prices in Market (6) $3,200 $1,800 $2,000 $3,800
LTS net revenue to western roads/unit (7) $1,700 $750 $950 $1,700
CSXI net revenue to western roads/unit (8) $1,825 $700 $900 $1,600
Zone Cost Factor (see Exh 9.3.2) $400 $300 $100 $400
LTS Efficiency Factor $25.00 $12.00 $13.00 $25.00
LTS 3-month Payments to CSXI $4,500,000 $2,500,000 $2,000,000 $4,500,000
LTS Average Rate on CSXI (9) $1,000 $500 $500 $1,000
Lowest net Revenue to western road (10) $1,700 $700 $900 $1,600
CSXI Floor (11) $3,125 $1,512 $1,513 $3,025
LTS Floor (12) $3,100 $1,500 $1,500 $3,000
CSXI Lane Compliance? Yes Yes
CSXI Lane Compliance Amount (13) $125 $188 $387 $575
LTS Lane Compliance? Yes Yes
LTS Lane Compliance Amount (14) $100 $300 $500 $800
Zone In Compliance
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance.
Lowest one-way western average rate applies in floor calculation.
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2).
So Cal./Southeast Zone
CSXI Zone Compliance? Yes LTS Zone Compliance Yes
CSXI Zone Compliance Amount (1) $1,150 LTS Zone Compliance Amount (2) $1,525
L.A/A L.A/B
East-48 West-48 Round Trip East-48 West-48
------- ------- ---------- ------- -------
CSXI's 3-month Revenue (3) $3,800,000 $3,400,000 $7,200,000 $2,800,000 $3,200,000
LTS's 3-month Revenue (4) $9,000,000 $6,800,000 $15,800,000 $7,500,000 $6,800,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000
LTS 3 month Volume 5,000 4,000 9,000 5,000 4,000
CSXI Average Prices in Market (5) $1,900 $1,700 $3,600 $1,400 $1,600
LTS Average Prices in Market (6) $1,800 $1,700 $3,500 $1,500 $1,700
LTS net revenue to western roads/unit (7) $725 $875 $1,600 $800 $900
CSXI net revenue to western roads/unit (8) $700 $900 $1,600 $850 $975
Zone Cost Factor (see Exh 9.3.2) $300 $100 $400 $300 $100
LTS Efficiency Factor $12.00 $13.00 $25.00 $12.00 $13.00
LTS 3-month Payments to CSXI $2,500,000 $1,600,000 $4,100,000 $2,500,000 $2,000,000
LTS Average Rate on CSXI (9) $500 $400 $900 $500 $500
Lowest net Revenue to western road (10) $700 $875 $1,575 $800 $900
CSXI Floor (11) $1,512 $1,388 $2,900 $1,612 $1,513
LTS Floor (12) $1,500 $1,375 $2,875 $1,600 $1,500
CSXI Lane Compliance? Yes
CSXI Lane Compliance Amount (13) $388 $312 $700 -$212 $87
LTS Lane Compliance? Yes
LTS Lane Compliance Amount (14) $300 $325 $625 -$100 $200
CSXI Zone Compliance? Auditor seeks NO remedy
CSXI Zone Compliance Amount (1)
L.A/C
Round Trip East-48 West-48 Round Trip
---------- ------- ------- ----------
CSXI's 3-month Revenue (3) $6,000,000 $3,400,000 $3,800,000 $7,200,000
LTSs 3-month Revenue (4) $14,300,000 $9,000,000 $8,000,000 $17,000,000
CSXI 3 month Volume 4,000 2,000 2,000 4,000
LTS 3 month Volume 9,000 5,000 4,000 9,000
CSXI Average Prices in Market (5) $3,000 $1,700 $1,900 $3,600
LTS Average Prices in Market (6) $3,200 $1,800 $2,000 $3,800
LTS net revenue to western roads/unit (7) $1,700 $750 $950 $1,700
CSXI net revenue to western roads/unit (8) $1,825 $700 $900 $1,600
Zone Cost Factor (see Exh 9.3.2) $400 $300 $100 $400
LTS Efficiency Factor $25.00 $12.00 $13.00 $25.00
LTS 3-month Payments to CSXI $4,500,000 $2,500,000 $2,000,000 $4,500,000
LTS Average Rate on CSXI (9) $1,000 $500 $500 $1,000
Lowest net Revenue to western road (10) $1,700 $700 $900 $1,600
CSXI Floor (11) $3,125 $1,512 $1,513 $3,025
LTS Floor (12) $3,100 $1,500 $1,500 $3,000
CSXI Lane Compliance? No Yes
CSXI Lane Compliance Amount (13) -$125 $188 $387 $575
LTS Lane Compliance? Yes Yes
LTS Lane Compliance Amount (14) $100 $300 $500 $800
Zone CSXI Not in Compliance
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? No LTS Zone Compliance Yes
CSXI Zone Compliance Amount (1) -$40 LTS Zone Compliance Amount (2) $1,235
LA/A LA/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00
------- ------- ---------- ------- -------
CSXI's 3-month Revenue (3) $3,000,000 $2,600,000 $5,600,000 $2,800,000 $3,200,000
LTS's 3-month Revenue (4) $9,000,000 $6,800,000 $15,800,000 $7,500,000 $6,800,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000
LTS 3 month Volume 5,000 4,000 9,000 5,000 4,000
CSXI Average Prices in Market (5) $1,500 $1,300 $2,800 $1,400 $1,600
LTS Average Prices in Market (6) $1,800 $1,700 $3,500 $1,500 $1,700
LTS net revenue to western roads/unit (7) $725 $875 $1,600 $800 $900
CSXI net revenue to western roads/unit (8) $700 $900 $1,600 $850 $975
Zone Cost Factor (see Exh 9.3.2) $300 $100 $400 $300 $100
LTS Efficiency Factor $12.00 $13.00 $25.00 $12.00 $13.00
LTS 3-month Payments to CSXI $2,500,000 $1,600,000 $4,100,000 $2,500,000 $2,000,000
LTS Average Rate on CSXI (9) $500 $400 $900 $500 $500
Lowest net Revenue to western road (10) $700 $875 $1,575 $800 $900
CSXI Floor (11) $1,512 $1,388 $2,900 $1,612 $1,513
LTS Floor (12) $1,500 $1,375 $2,875 $1,600 $1,500
CSXI Lane Compliance? No
CSXI Lane Compliance Amount (13) -$12 -$88 -$100 -$212 $87
LTS Lane Compliance? Yes
LTS Lane Compliance Amount (14) $300 $325 $625 -$100 $200
CSXI Zone Compliance? Auditor seeks remedy against CSX only
CSXI Zone Compliance Amount (1)
LA/C
Round Trip East-48 West-48 Round Trip
---------- ------- ------- ----------
CSXI's 3-month Revenue (3) $6,000,000 $3,200,000 $3,800,000 $7,000,000
LTS's 3-month Revenue (4) $14,300,000 $9,000,000 $8,000,000 $17,000,000
CSXI 3 month Volume 4,000 2,000 2,000 4,000
LTS 3 month Volume 9,000 5,000 4,000 9,000
CSXI Average Prices in Market (5) $3,000 $1,600 $1,900 $3,500
LTS Average Prices in Market (6) $3,200 $1,800 $2,000 $3,800
LTS net revenue to western roads/unit (7) $1,700 $900 $1,125 $2,025
CSXI net revenue to western roads/unit (8) $1,825 $890 $1,000 $1,890
Zone Cost Factor (see Exh 9.3.2) $400 $300 $100 $400
LTS Efficiency Factor $25.00 $12.00 $13.00 $25.00
LTS 3-month Payments to CSXI $4,500,000 $2,500,000 $2,000,000 $4,500,000
LTS Average Rate on CSXI (9) $1,000 $500 $500 $1,000
Lowest net Revenue to western road (10) $1,700 $890 $1,000 $1,890
CSXI Floor (11) $3,125 $1,702 $1,613 $3,315
LTS Floor (12) $3,100 $1,690 $1,600 $3,290
CSXI Lane Compliance? No Yes
CSXI Lane Compliance Amount (13) -$125 -$102 $287 $185
LTS Lane Compliance? Yes Yes
LTS Lane Compliance Amount (14) $100 $110 $400 $510
In this lane, CSXI is $100 below its round In this lane, CSXI is $125 below its round
trip floor. We would apply a rate reduction trip floor. We would apply a rate reduction
to LTS' rate proportionately. In this case, to LTS' rate proportionately. In this case,
5/9 of reduction to E/B, 4/9 to W/B half of reduction to E/B, half to W/B
$100 $125
LTS new rates for 3 month period TS new rates for 3 month period
E/B W/B R/T E/B W/B R/T
$444 $356 $800 $438 $438 $875
Zone APL Not in Compliance
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? Yes LTS Zone Compliance No
CSXI Zone Compliance Amount (1) $10 LTS Zone Compliance Amount (2) -$75
LA/A LA/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00
------- ------- ---------- ------- -------
CSXI's 3-month Revenue (3) $3,000,000 $2,800,000 $5,800,000 $3,200,000 $3,100,000
LTS's 3-month Revenue (4) $7,400,000 $5,400,000 $12,800,000 $7,900,000 $5,960,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000
LTS 3 month Volume 5,000 4,000 9,000 5,000 4,000
CSXI Average Prices in Market (5) $1,500 $1,400 $2,900 $1,600 $1,550
LTS Average Prices in Market (6) $1,480 $1,350 $2,830 $1,580 $1,490
LTS net revenue to western roads/unit (7) $725 $875 $1,600 $800 $900
CSXI net revenue to western roads/unit (8) $700 $900 $1,600 $850 $975
Zone Cost Factor (see Exh 9.3.2) $300 $100 $400 $300 $100
LTS Efficiency Factor $12.00 $13.00 $25.00 $12.00 $13.00
LTS 3-month Payments to CSXI $2,500,000 $1,600,000 $4,100,000 $2,500,000 $2,000,000
LTS Average Rate on CSXI (9) $500 $400 $900 $500 $500
Lowest net Revenue to western road (10) $700 $875 $1,575 $800 $900
CSXI Floor (11) $1,512 $1,388 $2,900 $1,612 $1,513
LTS Floor (12) $1,500 $1,375 $2,875 $1,600 $1,500
CSXI Lane Compliance? Yes
CSXI Lane Compliance Amount (13) -$12 $12 $0 -$12 $37
LTS Lane Compliance? No
LTS Lane Compliance Amount (14) -$20 -$25 -$45 -$20 -$10
CSXI Zone Compliance? Auditor seeks remedy against LTS
CSXI Zone Compliance Amount (1)
I.A/C
Round Trip East-48 West-48 Round Trip
---------- ------- ------- ----------
CSXI's 3-month Revenue (3) $6,300,000 $3,300,000 $3,500,000 $6,600,000
LTS's 3-month Revenue (4) $13,860,000 $8,450,000 $6,400,000 $14,850,000
CSXI 3 month Volume 4,000 2,000 2,000 4,000
LTS 3 month Volume 9,000 5,000 4,000 9,000
CSXI Average Prices in Market (5) $3,150 $1,650 $1,650 $3,300
LTS Average Prices in Market (6) $3,070 $1,690 $1,600 $3,290
LTS net revenue to western roads/unit (7) $1,700 $900 $1,125 $2,025
CSXI net revenue to western roads/unit (8) $1,825 $890 $1,000 $1,890
Zone Cost Factor (see Exh 9.3.2) $400 $300 $100 $400
LTS Efficiency Factor $25.00 $12.00 $13.00 $25.00
LTS 3-month Payments to CSXI $4,500,000 $2,500,000 $2,000,000 $4,500,000
LTS Average Rate on CSXI (9) $1,000 $500 $500 $1,000
Lowest net Revenue to western road (10) $1,700 $890 $1,000 $1,890
CSXI Floor (11) $3,125 $1,702 $1,613 $3,315
LTS Floor (12) $3,100 $1,690 $1,600 $3,290
CSXI Lane Compliance? Yes Nos
CSXI Lane Compliance Amount (13) $25 $52 $37 $15
LTS Lane Compliance? No Yes
LTS Lane Compliance Amount (14) -$30 $0 $0 $0
In this lane, LTS is below its round trip In this lane, APL is below its round trip
floor. We would apply a rate increase to LTS' floor. We would apply a rate reduction to
rate proportionately. LTS' rate proportionately.
$45 $30
LTS new rates for 3 month period LTS new rates for 3 month period
E/B W/B R/T E/B W/B R/T
$525 $420 $945 $515 $515 $1,030
CSXI Bad, LTS is Worse
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? No LTS Zone Compliance No
CSXI Zone Compliance Amount (1) -$450 LTS Zone Compliance Amount (2) -$500
LA/A LA/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00
------- ------- ---------- ------- -------
CSXI's 3-month Revenue (3) $3,000,000 $2,700,000 $5,700,000 $3,026,000 $2,826,000
LTS's 3-month Revenue (4) $5,600,000 $5,100,000 $10,700,000 $6,000,000 $5,600,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000
LTS 3 month Volume 4,000 4,000 8,000 4,000 4,000
CSXI Average Prices in Market (5) $1,500 $1,350 $2,850 $1,513 $1,413
LTS Average Prices in Market (6) $1,400 $1,275 $2,675 $1,500 $1,400
LTS net revenue to western roads/unit (7) $725 $875 $1,600 $800 $900
CSXI net revenue to western roads/unit (8) $700 $900 $1,600 $850 $975
Zone Cost Factor (see Exh 9.3.2) $300 $100 $400 $300 $100
LTS Efficiency Factor $12.00 $13.00 $25.00 $12.00 $13.00
LTS 3-month Payments to CSXI $2,000,000 $1,600,000 $3,600,000 $2,000,000 $2,000,000
LTS Average Rate on CSXI (9) $500 $400 $900 $500 $500
Lowest net Revenue to western road (10) $700 $875 $1,575 $800 $900
CSXI Floor (11) $1,512 $1,388 $2,900 $1,612 $1,513
LTS Floor (12) $1,500 $1,375 $2,875 $1,600 $1,500
CSXI Lane Compliance? No
CSXI Lane Compliance Amount (13) -$12 -$38 -$50 -$99 -$100
LTS Lane Compliance? No
LTS Lane Compliance Amount (14) -$100 -$100 -$200 -$100 -$100
CSXI Zone Compliance? Auditor seeks remedy against CSX and LTS
CSXI Zone Compliance Amount (1)
LA/C
Round Trip East-48 West-48 Round Trip
---------- ------- ------- ----------
CSXI's 3-month Revenue (3) $5,852,000 $3,206,000 $3,026,000 $6,232,000
LTS's 3-month Revenue (4) $11,600,000 $6,560,000 $6,200,000 $12,760,000
CSXI 3 month Volume 4,000 2,000 2,000 4,000
LTS 3 month Volume 8,000 4,000 4,000 8,000
CSXI Average Prices in Market (5) $2,926 $1,603 $1,513 $3,116
LTS Average Prices in Market (6) $2,900 $1,640 $1,550 $3,190
LTS net revenue to western roads/unit (7) $1,700 $900 $1,125 $2,025
CSXI net revenue to western roads/unit (8) $1,825 $890 $1,000 $1,890
Zone Cost Factor (see Exh 9.3.2) $400 $300 $100 $400
LTS Efficiency Factor $25.00 $12.00 $13.00 $25.00
LTS 3-month Payments to CSXI $4,000,000 $2,000,000 $2,000,000 $4,000,000
LTS Average Rate on CSXI (9) $1,000 $500 $500 $1,000
Lowest net Revenue to western road (10) $1,700 $890 $1,000 $1,890
CSXI Floor (11) $3,125 $1,702 $1,613 $3,315
LTS Floor (12) $3,100 $1,690 $1,600 $3,290
CSXI Lane Compliance? No No
CSXI Lane Compliance Amount (13) -$200 -$99 -$100 -$200
LTS Lane Compliance? No No
LTS Lane Compliance Amount (14) -$200 -$50 -$50 -$100
In this lane, LTS is below its round trip In this lane, LTS and CSXI are below their
floor but so is CSXI. Auditor would increase round trip floors equally. Therefore, rates
LTS' rate proportionately by the difference will not be changed.
between LTS' price and its floor and CSXI's
price and its floor.
LTS below floor by $200 LTS below floor by $200
CSXI below floor by $50 CSXI below floor by $200
Net Change to LTS Rate $150 Net Change to LTS Rate $0
LTS new rates for 3 month period
E/B W/B R/T
$542 $433 $975
In this lane, LTS is below its round trip
floor but so is CSXI. Auditor would
decrease LTS' rate proportionately by the
difference between LTS' price and its floor
and CSXI's price and its floor.
LTS below floor by $100
CSXI below floor by $365
Net Change to LTS Rate ($265)
LTS new rates for 3 month period
E/B W/B R/T
$368 $368 $775
LTS is Bad, CSXI
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? No LTS Zone Compliance No
CSXI Zone Compliance Amount (1) -$614 LTS Zone Compliance Amount (2) -$425
LA/A LA/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00
------- ------- ---------- ------- -------
CSXI's 3-month Revenue (3) $3,000,000 $2,700,000 $5,700,000 $3,026,000 $2,826,000
LTS's 3-month Revenue (4) $5,800,000 $5,200,000 $11,000,000 $6,000,000 $5,600,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000
LTS 3 month Volume 4,000 4,000 8,000 4,000 4,000
CSXI Average Prices in Market (5) $1,500 $1,350 $2,850 $1,513 $1,413
LTS Average Prices in Market (6) $1,450 $1,300 $2,750 $1,500 $1,400
LTS net revenue to western roads/unit (7) $725 $875 $1,600 $800 $900
CSXI net revenue to western roads/unit (8) $700 $900 $1,600 $850 $975
Zone Cost Factor (see Exh 9.3.2) $300 $100 $400 $300 $100
LTS Efficiency Factor $12.00 $13.00 $25.00 $12.00 $13.00
LTS 3-month Payments to CSXI $2,000,000 $1,600,000 $3,600,000 $2,000,000 $2,000,000
LTS Average Rate on CSXI (9) $500 $400 $900 $500 $500
Lowest net Revenue to western road (10) $700 $875 $1,575 $800 $900
CSXI Floor (11) $1,512 $1,388 $2,900 $1,612 $1,513
LTS Floor (12) $1,500 $1,375 $2,875 $1,600 $1,500
CSXI Lane Compliance? No
CSXI Lane Compliance Amount (13) -$12 -$38 -$50 -$99 -$100
LTS Lane Compliance? No
LTS Lane Compliance Amount (14) -$50 -$75 -$125 -$100 -$100
CSXI Zone Compliance? Auditor seeks remedy against LTS
CSXI Zone Compliance Amount (1)
LA/C
Round Trip East-48 West-48 Round Trip
---------- ------- ------- ----------
CSXI's 3-month Revenue (3) $5,852,000 $3,100,000 $2,800,000 $5,900,000
LTS's 3-month Revenue (4) $11,600,000 $6,560,000 $6,200,000 $12,760,000
CSXI 3 month Volume 4,000 2,000 2,000 4,000
LTS 3 month Volume 8,000 4,000 4,000 8,000
CSXI Average Prices in Market (5) $2,926 $1,550 $1,400 $2,950
LTS Average Prices in Market (6) $2,900 $1,640 $1,550 $3,190
LTS net revenue to western roads/unit (7) $1,700 $900 $1,125 $2,025
CSXI net revenue to western roads/unit (8) $1,825 $890 $1,000 $1,890
Zone Cost Factor (see Exh 9.3.2) $400 $300 $100 $400
LTS Efficiency Factor $25.00 $12.00 $13.00 $25.00
LTS 3-month Payments to CSXI $4,000,000 $2,000,000 $2,000,000 $4,000,000
LTS' Average Rate on CSXI (9) $1,000 $500 $500 $1,000
Lowest net Revenue to western road (10) $1,700 $890 $1,000 $1,890
CSXI Floor (11) $3,125 $1,702 $1,613 $3,315
LTS Floor (12) $3,100 $1,690 $1,600 $3,290
CSXI Lane Compliance? No No
CSXI Lane Compliance Amount (13) -$199 -$152 -$213 $365
LTS Lane Compliance? No No
LTS Lane Compliance Amount (14) -$200 -$50 -$50 -$100
In this lane, LTS is below its round trip In this lane, LTS and CSXI are below their
floor but so is CSXI. Auditor would increase round trip floors equally. Therefore, rates
LTS' rate proportionately by the difference will not be changed.
between LTS' price and its floor and CSXI's
price and its floor.
LTS below floor by $125 LTS below floor by $200
CSXI below floor by $50 CSXI below floor by $200
Net Change to LTS Rate $75 Net Change to LTS Rate $0
LTS new rates for 3 month period
E/B W/B R/T
$542 $433 $975
In this lane, LTS is below its round trip
floor but so is CSXI. Auditor would
decrease LTS' rate proportionately by the
difference between LTS' price and its floor
and CSXI's price and its floor.
LTS below floor by $100
CSXI below floor by $365
Net Change to LTS Rate ($265)
LTS new rates for 3 month period
E/B W/B R/T
$368 $368 $775
CSXI Bad, LTS is a Lot Worse
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? Yes LTS Zone Compliance No
CSXI Zone Compliance Amount (1) $401 LTS Zone Compliance Amount (2) -$600
LA/A LA/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00
------- ------- ---------- ------- -------
CSXI's 3-month Revenue (3) $3,026,000 $2,776,000 $5,802,000 $3,026,000 $2,826,000
LTS's 3-month Revenue (4) $5,600,000 $5,100,000 $10,700,000 $6,000,000 $5,600,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000
LTS 3 month Volume 4,000 4,000 8,000 4,000 4,000
CSXI Average Prices in Market (5) $1,513 $1,388 $2,901 $1,513 $1,413
LTS Average Prices in Market (6) $1,400 $1,275 $2,675 $1,500 $1,400
LTS net revenue to western roads/unit (7) $725 $875 $1,600 $800 $900
CSXI net revenue to western roads/unit (8) $700 $900 $1,600 $850 $975
Zone Cost Factor (see Exh 9.3.2) $300 $100 $400 $300 $100
LTS Efficiency Factor $12.00 $13.00 $25.00 $12.00 $13.00
LTS 3-month Payments to CSXI $2,000,000 $1,600,000 $3,600,000 $2,000,000 $2,000,000
LTS Average Rate on CSXI (9) $500 $400 $900 $500 $500
Lowest net Revenue to western road (10) $700 $875 $1,575 $800 $900
CSXI Floor (11) $1,512 $1,388 $2,900 $1,612 $1,513
LTS Floor (12) $1,500 $1,375 $2,875 $1,600 $1,500
CSXI Lane Compliance? Yes
CSXI Lane Compliance Amount (13) $1 $0 $1 -$99 -$100
LTS Lane Compliance? No
LTS Lane Compliance Amount (14) -$100 -$100 -$200 -$100 -$100
LA/C
Round Trip East-48 West-48 Round Trip
---------- ------- ------- ----------
CSXI's 3-month Revenue (3) $5,852,000 $3,206,000 $3,026,000 $6,232,000
LTS's 3-month Revenue (4) $11,600,000 $6,360,000 $6,000,000 $12,360,000
CSXI 3 month Volume 4,000 2,000 2,000 4,000
LTS 3 month Volume 8,000 4,000 4,000 8,000
CSXI Average Prices in Market (5) $2,926 $1,603 $1,513 $3,116
LTS' Average Prices in Market (6) $2,900 $1,590 $1,500 $3,090
LTS net revenue to western roads/unit (7) $1,700 $900 $1,125 $2,025
CSXI net revenue to western roads/unit (8) $1,825 $890 $1,000 $1,890
Zone Cost Factor (see Exh 9.3.2) $400 $300 $100 $400
LTS Efficiency Factor $25.00 $12.00 $13.00 $25.00
LTS 3-month Payments to CSXI $4,000,000 $2,000,000 $2,000,000 $4,000,000
LTS Average Rate on CSXI (9) $1,000 $500 $500 $1,000
Lowest net Revenue to western road (10) $1,700 $890 $1,000 $1,890
CSXI Floor (11) $3,125 $1,702 $1,613 $3,315
LTS Floor (12) $3,100 $1,690 $1,600 $3,290
CSXI Lane Compliance? Yes Yes
CSXI Lane Compliance Amount (13) $200 -$99 -$100 $200
LTS Lane Compliance? No No
LTS Lane Compliance Amount (14) -$200 -$100 -$100 -$200
In this lane, LTS is below its round trip In this lane, LTS and CSXI are below their
floor but so is CSXI. Auditor would apply a round trip floors equally. Therefore, rates
rate increase to LTS' rate proportionately. will not be changed.
$200
LTS new rates for 3 month period
E/B W/B R/T
$611 $489 $1,100
In this lane, LTS and CSXI are below their
round trip floors equally. Therefore, rates
will not be changed.
Equally Bad Behavior
Auditor only looks to Lane specific Remedy when entire zone falls out of
compliance
Lowest one-way western average rate applies in floor calculation
Zone Cost Factor derived from Zone Cost Exhibit (Exhibit 9.3.2)
So Cal./Southeast Zone
CSXI Zone Compliance? No LTS Zone Compliance No
CSXI Zone Compliance Amount (1) -$600 LTS Zone Compliance Amount (2) -$600
LA/A LA/B
Xxxx-00 Xxxx-00 Xxxxx Xxxx Xxxx-00 Xxxx-00 Round Trip
------- ------- ---------- ------- ------- ----------
CSXI's 3-month Revenue (3) $2,826,000 $2,576,000 $5,402,000 $3,026,000 $2,826,000 $5,852,000
LTS's 3-month Revenue (4) $5,600,000 $5,100,000 $10,700,000 $6,000,000 $5,600,000 $11,600,000
CSXI 3 month Volume 2,000 2,000 4,000 2,000 2,000 4,000
LTS 3 month Volume 4,000 4,000 8,000 4,000 4,000 8,000
CSXI Average Prices in Market (5) $1,413 $1,288 $2,701 $1,513 $1,413 $2,926
LTS Average Prices in Market (6) $1,400 $1,275 $2,675 $1,500 $1,400 $2,900
LTS net revenue to western roads/unit (7) $725 $875 $1,600 $800 $900 $1,700
CSXI net revenue to western roads/unit (8) $700 $900 $1,600 $850 $975 $1,825
Zone Cost Factor (see Exh 9.3.2) $300 $100 $400 $300 $100 $400
LTS Efficiency Factor $12.00 $13.00 $25.00 $12.00 $13.00 $25.00
LTS 3-month Payments to CSXI $2,000,000 $1,600,000 $3,600,000 $2,000,000 $2,000,000 $4,000,000
LTS Average Rate on CSXI (9) $500 $400 $900 $500 $500 $1,000
Lowest net Revenue to western road (10) $700 $875 $1,575 $800 $900 $1,700
CSXI Floor (11) $1,512 $1,388 $2,900 $1,612 $1,513 $3,125
LTS Floor (12) $1,500 $1,375 $2,875 $1,600 $1,500 $3,100
CSII Lane Compliance? No No
CSXI Lane Compliance Amount (13) -$99 -$100 -$200 -$99 -$100 -$200
LTS Lane Compliance? No No
LTS Lane Compliance Amount (14) -$100 -$100 -$200 -$100 -$100 -$200
CSXI Zone Compliance? Auditor seeks no remedy
CSXI Zone Compliance Amount (1)
LA/C
East-48 West-48 Round Trip
------- ------- ----------
CSXI's 3-month Revenue (3) $3,206,000 $3,026,000 $6,232,000
LTS's 3-month Revenue (4) $6,360,000 $6,000,000 $12,360,000
CSXI 3 month Volume 2,000 2,000 4,000
LTS 3 month Volume 4,000 4,000 8,000
CSXI Average Prices in Market (5) $1,603 $1,513 $3,116
LTS Average Prices in Market (6) $1,590 $1,500 $3,090
LTS net revenue to western roads/unit (7) $900 $1,125 $2,025
CSXI net revenue to western roads/unit (8) $890 $1,000 $1,890
Zone Cost Factor (see Exh 9.3.2) $300 $100 $400
LTS Efficiency Factor $12.00 $13.00 $25.00
LTS 3-month Payments to CSXI $2,000,000 $2,000,000 $4,000,000
LTS Average Rate on CSXI (9) $500 $500 $1,000
Lowest net Revenue to western road (10) $890 $1,000 $1,890
CSXI Floor (11) $1,702 $1,613 $3,315
LTS Floor (12) $1,690 $1,600 $3,290
CSXI Lane Compliance? No
CSXI Lane Compliance Amount (14) -$99 -$100 -$200
LTS Lane Compliance? No
LTS Lane Compliance Amount (13) -$100 -$100 -$200
In this lane, LTS and CSXI are below their
round trip floors equally. Therefore, rates
will not be changed.
In this lane, LTS and CSXI are below their
round trip floors equally. Therefore, rates
will not be changed.
EXHIBIT 14.2.1
DEPRECIATION FORMULA
The depreciated value of a Container or a Chassis will equal the reproduction
cost minus the depreciated amount, calculated as follows:
Reproduction cost = original cost of Container or Chassis
X AAR cost factor for the year prior to the year
during which the Container or Chassis was damaged
/ AAR cost factor for the year the
Container/Container and Chassis was built
Depreciated amount/1/ = reproduction cost
X 1/120
X number of complete months the Container or
Chassis was in service
Salvage value: Container = $300.00 per Container
mechanical refrigeration unit
and all component parts = $500.00 per unit
Chassis = $300.00 per frame
= $ 80.00 per wheel
--------------------------
/1/ The maximum depreciated amount of a dry Container will equal ninety percent
(90%) of the reproduction cost of the Container. The maximum depreciated amount
of a mechanically refrigerated Container will equal ninety-five percent (95%) of
the reproduction cost of the Container. The maximum depreciated amount of a
Chassis will equal ninety percent (90%) of the reproduction cost of the Chassis.
Confidential
