LCS Report Card

Mike ParticaMay 2008Chicago, Il

Liability Continuity System (LCS) Background

• History– Industry process implemented in January 1999– LCS was implemented as one of the building blocks of a Centralized Car Hire

Process– Goal was to eliminate all time claims– Roads were not using the same interchange times to pay Car Hire

• Rules Today– Car Hire Rule 9 states Roads must use LCS to pay Car Hire.– As per Car Hire Rule 11, LCS records must be referenced to disprove Liability. – A third party agreement (ex: Haulage) does not authorize non-payment to an

owner.

Bottom line, roads must pay according to LCS.

How it all ties Together

TRAINII

Reporting

LCS RecordsLCS

Process

Car Hire Liability

Analyse LCS and address

reporting issues

Improve your car hire position by dealing with reporting issues

Opportunities in TRAINII Reporting

Roads must look at what they are reporting to TRAINII, and what errors are returned!

TRAINII Error Statistics

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Sent

Errors

Error %

What can you Measure?

• LCS by Message types– By system – Provides and overall health of reporting.– By location – Provides insight into problem areas.– Hours difference between both roads reporting.

• On Hand equipment (based on LCS) with no movement.– 30 days no movement count.

LCS must be used to settle car hire

AND

Should help identify and deal with reporting issues.

Areas of opportunity

Common LCS Message Types

• V – Verified Interchange – Both roads reported, difference within 1 hour.

• W- Both roads reported, Difference within 4 hours.• O – One road reporting, Delivering road’s report.• P - One road reporting, Receiving road’s report.• B – Both roads reported, difference 4 – 120 hours• D – Only delivering carrier reported.• R – Only receiving carrier reported.• G – LCS gapped, not based on an interchange reporting• I – Illogical interchange reporting (or too old)

When it comes down to dealing with your issues, all “D”’s and “R”’s may not be equal.

It is Important to Distinguish within LCS message Types.

• For a “D” type interchange (Only delivery road reported)– Were YOU the delivering road?

• For a “R” type interchange (Only receiving reported)– Were YOU the receiving road?

• For a “G” type interchange (Gap interchange)– Is it gapped out of your account…

Start by focussing on what your company can do to fix reporting issues.

If Yes, not that much of a

problem, LCS is using your

reporting.

Problems are not always Straight forward.

If Road A never gave car to Road B, The type “R” is not a real concern, you’re paying less car hire that you think you should.

Reporter EventRoad A Train DepartureRoad A Train ArrivalRoad B ReceiptRoad A Train DepartureRoad A Train Arrival

LCS interchange

LCS Type

A to B “R”

B to A “G”

LCS Events Event Reporting

Problems are not always Straight forward.

Road B is ok with the Type “R”, Road A may not be.

Reporter EventRoad A Train DepartureRoad A Train ArrivalRoad A DeliveryRoad B ReceiptRoad B Train DepartureRoad B Train ArrivalRoad B DeliveryRoad A Receipt

LCS interchange

LCS Type

A to B “R”

B to A “V”

LCS Events Event Reporting

Sample LCS Report Card

LCS Type PercentageV – Verified 10%

W – Within 4 hrs 40%

B – 5 to 120 hrs 10%

D – Delivering Road only 14%

R – Receiving Road Only 14%

G – Gap record 10%

I - Illogical 2%

Overall 50% is within 4 hours..

Hopefully not all your problem.

CN LCS Report Card

CN System (All Regions) Week ending May 5th, 2008

Bottom line, 78% of the LCS interchanges seem acceptable. 10% are more of a concern. (some may be a CN issue, some not)

Count %Not

Concerned ConcernedTOTAL INTERCHANGES(A/B/D/E/G/I/L/M/O/P/Q/R/S/V/W/X) 56948 100%INTERCHANGE DIFFERENCES GREATER THAN 4 HOURS (B) 7040 12% 12%INTERCHANGE DIFFERENCES 4 HOURS OR LESS (W) 11454 20% 20%VERIFIED INTERCHANGES (V) 15252 27% 27%CN MISSING INTERCHANGES (G/D/R) 4806 8% 8%CN ONLY INTERCHANGES (D/R) 3151 6% 6%HAULAGE INTERCHANGES (E) 4075 7% 7%HAULAGE START/STOP INTERCHANGES (L/M) 0 0%HAULAGE TERMINATED INTERCHANGES (Q) 0 0%ILLOGICALS (I) 951 2% 2%SUPPRESSED (S) 1917 3% 3%INACTIVATED (X) 0 0%ONE ROAD REPORTING (O/P) 8302 15% 15%OTHER 0 0%

78% 22%

Key points when investigating Reporting issues• Ask yourself some questions…

– What was in your Railroad’s reporting system?– What did you actually send out to TRAINII?– Did you get any TRAINII errors?– Bottom line, does your reporting match what Railinc has in their Database?

• Try to establish a dollar value for the issue.– Ex: Your missed reporting caused you to pay an additional 24 hours due to

the other road’s reporting. ($16.80 per car, or $168 for a 100 car train)– Does the reporting issue impact other areas (ex: demurrage)?

• Focus on the most current data possible. – Audit logs are typically not kept very long.

• Expect Layers of Problems. Work one layer at a time.

Track your progress regularly!

Conclusion

• Using LCS information can help you resolve reporting issues.• It is important to track and measure where you are.• Benefits:

– Reduced Car Hire expense– Better information for customers– Potentially improved operations (if addressing operational

issues, reducing dwell).– A Car Accounting process with less exceptions (less work).

Liability assigned by LCS is a reflection of what is reported.

Questions?