Damaged and Defective Car Tracking System DDCT ACACSO

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Damaged and Defective Car Tracking System (DDCT) ACACSO Meeting – Phoenix, AZ November 11 th, 2010 Mark Aldenderfer – Railinc Chip Summey – Railinc 7001 Weston Parkway, Suite 200, Cary, NC 27513 – 877. 724. 5462 -- www. railinc. com ©Railinc 2010 All Rights Reserved 1

Agenda • DDCT Mechanical Process Overview – Current Damaged/Defective Process – Damaged and Defective Car Tracking System Overview – How to Learn More and Get Ready • DDCT Car Hire Changes – Car Hire Rules Affected – DDCT Interaction with LCS – Key Events in DDCT ©Railinc 2010 All Rights Reserved 2

DDCT Overview • The Damaged and Defective Car Tracking System was requested jointly by ARB and EAC to serve as a centralized system to track damaged and defective cars under AAR Interchange rules and Car Hire rules • Railroads, Car Owners and Shops will all be impacted ©Railinc 2010 All Rights Reserved 4

DDCT Status Update • DDCT will Go-live January 2011 – Development is almost complete – The Industry is updating the Interchange and Car Hire Rules – The DDCT Technical Advisory Group is responsible for managing implementation efforts with the Railinc team ©Railinc 2010 All Rights Reserved 5

Damage is identified by the Handling Carrier creates Handling Carrier notifies Car Mark Owner Car Accounting determines car hire liability Communication Current Damage Defective Process Reclaim after the fact defect card Manually places card on car Repair Shop ©Railinc 2010 All Rights Reserved Bill Sent to Owner

Current Process – Defective Cars (Rule 1 & 108) • Each field location makes the individual request to a centralized location within the railroad • If railroad has their own automated system – Email notifies car owner to go in the railroad’s system to review the information and choose a shop for disposition – Car owner enters the information into the railroad’s system – Information is funneled back to the individual field location for proper disposition and handling within the railroad ©Railinc 2010 All Rights Reserved 7

Current Process – Defective Cars (Rule 1 & 108) cont. • If the railroad does not have an automated system then the paper trail begins – An email or fax is sent to the car mark owner with defect information and a request for disposition – Car owner then has to respond back via email or fax with shop disposition – Railroad then has to funnel the information from the car owner back to the field location requesting disposition via email or fax • Additionally for Rule 108 only – Add a JIC to the mix ©Railinc 2010 All Rights Reserved 8

Current Process – Damaged Cars (Rule 107) • Field personnel notifies System Mechanical of a derailment and a request for DV via phone call, email or internal system • An individual email or fax is sent to the car mark owner requesting DV and shop location if needed • An email/fax is sent back from the car mark owner to the damaging carrier – This happens anywhere from almost immediately to the full allowance of the rule of 7 days (some take longer than that) ©Railinc 2010 All Rights Reserved 9

Current Process – Damaged Cars (Rule 107) cont. • Damaging carrier has no set means to determine what an estimated DV for the car is to assist the field personnel at the site at that moment what the car may be worth – This is a best case/guess scenario based on history of similar car types. • If the car is destroyed, an individual email/fax letter of authority is sent to the car mark owner • This is all handled Monday – Friday between the business hours of 8 am to 5 pm – Evenings and weekends are a big black void ©Railinc 2010 All Rights Reserved 10

Current Process – Damaged Cars (Rule 107) cont. • There are numerous functions that require manual participation for this to flow • Phone calls generally occur during these transactions to try and speed up the process or gather information rapidly to assist the field in making determinations • Many times the field locations are under the gun if the cost of the derailment comes close to the FRA thresholds and reporting requirements ©Railinc 2010 All Rights Reserved 11

Current Process – Defect Cards • Railroad must create multiple copies of a Defect Card with an itemized list of the defects – – Defect Card is then placed into the holder/receptacle on the car Copy is kept at the location issuing the Defect Card Copy is sent to Railroad’s System designee Copy is sent to Chief Mechanical Officer or equivalent of the damaged car • Paper tries to last four years - If a copy fails to make it to the car mark owner, their only hope is that the car makes it to shop and the card is still legible ©Railinc 2010 All Rights Reserved 12

Damage is identified by the Handling Carrier Car Owner notified electronically Car moves as agreed to through DDCT process New Damage Defective Process Repair Shop validated through DDCT Handling Carrier reports damage/defect to DDCT@Railinc ©Railinc 2010 All Rights Reserved DDCT updates Liability Continuity System (LCS)

Accessibility • Centralized source for incident tracking • Increased visibility of damaged and defective cars • Electronic Defect Cards • Multiple methods available to access DDCT • • DDCT Web UI Web Service Request Mobile App Request Combination of any of the above ©Railinc 2010 All Rights Reserved 15

Data Quality • Standardized Process • Data edits reduce errors and data conflict • Integrates with other Railinc systems: • Umler™, Industry Reference Files (IRFs), Event Repository • Reduction in payable & receivable claims • Historical records of the incidents and their resolution ©Railinc 2010 All Rights Reserved 16

Efficiency • Update incident information real-time • Receive Estimated DV upon incident creation • Automated car-hire process eliminates reclaims • Elimination of installation and maintenance of defect card brackets • Web services to integrate with the Railinc DDCT system ©Railinc 2010 All Rights Reserved 17

Security • Single Sign On (SSO) • Company specific permissions • Role specific permissions • Possession check • Cannot create an incident without possession • Estimated DV is accessible only when creating an incident • Car Mark Owner is notified when EDV is requested ©Railinc 2010 All Rights Reserved 18

DDCT Railroad Functionality Railroads can • Report and document damage • Provide incident details • Receive estimated depreciation for cars involved in an incident • Request Actual DV & Dispo • Handle settlements ©Railinc 2010 All Rights Reserved 19

DDCT Car Owner Functionality Car owners can • Manage data on car condition, repairs and location • Receive detailed information on damage to car • Provide Actual DV and disposition • Accept or reject settlement offers • Make decisions about repairing or scrapping equipment ©Railinc 2010 All Rights Reserved 20

DDCT Shop Functionality Repair shops can • Receive information on car arrival, condition and needed repairs • Maintain an inventory of cars on site • Update car owners on the status of repairs ©Railinc 2010 All Rights Reserved 21

Early Warning • When DDCT Incidents are created, the cars are added to a Maintenance Advisory letter in the Early Warning System • Each Rule number will have a dedicated MA letter number • Cars are removed from the letter at the end of the incident lifecycle ©Railinc 2010 All Rights Reserved 22

Interchange Rules Impact • • Rule A & B Rule 1 Rule 71 Rule 95 Rule 102 Rule 103 Rule 107 • • Rule 108 Rule 111 Rule 112 Rule 113 Rule 114 New Rule 115 Appendix A Car Hire Rules Impact • Rule 7 • Rule 8 ©Railinc 2010 All Rights Reserved 23

DDCT – Getting Ready • Get up to date information from the DDCT website: www. railinc. com/ddct • Establish a Railinc Single Sign-On (SSO) account. Go to www. railinc. com for more information • Register in Find. Us. Rail. This is required by industry regulations, Rule 114 • Participate in training opportunities as they become available ©Railinc 2010 All Rights Reserved 25

Railinc Single Sign-On (SSO) • Establish a Railinc Single Sign-On (SSO) account. Go to www. railinc. com for more information • This is required to access Railinc applications ©Railinc 2010 All Rights Reserved 26

Find. Us. Rail • Contact information is required for DDCT by industry regulations • DDCT Category – Required for Car Owners & Railroads • Shop Category – Required for Repair Shops – SPLC Required for each Shop location ©Railinc 2010 All Rights Reserved 31

Communication Efforts • Railinc will provide information and training opportunities: – – – Meetings Webinars On-line demos Circular letters, email notifications User guides FAQs • Event dates/times are listed at www. railinc. com/ddct ©Railinc 2010 All Rights Reserved 32

Communication & Training Timeline December October • Webinars • Demos • Presentations • End to End Testing • Webinars November • Webinars • Demos • Presentations • Training with DDCT Test System • DDCT Roles available in SSO • Contact Industry to Start Requesting DDCT Permissions • Complete System Development • Lock Down Test System ©Railinc 2010 All Rights Reserved

Hands on Training • Railinc will open the pre-production environment to the industry for Training purposes during 4 th quarter 2010 • Interested parties please email csc@railinc. com stating desire to participate along with entering contact information into Find. Us. Rail ©Railinc 2010 All Rights Reserved 34

Webinars • Car Owners and DDCT: – November 15, 2 PM (ET) – November 19, 11 AM (ET) • Railroads and DDCT: – November 17, 3 PM (ET) – November 19, 2 PM (ET) • Repair Shops and DDCT: – November 17, 11 AM (ET) – November 18, 3 PM (ET) • DDCT Car Hire: – November 18, 11 AM (ET) – November 22, 3 PM (ET) ©Railinc 2010 All Rights Reserved 38

Recap Process Change Electronic Defect Card Car Hire Find. Us. Rail Information January 2011 Discontinue Use of Paper Defect Cards Triggered by DDCT actions Registration Required www. railinc. com/ddct ©Railinc 2010 All Rights Reserved 40

Car Hire Rules 7 and 8 • On January 1, 2011, updated Car Hire Rules 7 and 8 for Damaged and Defective Car Tracking System (DDCT) System are effective • The updated rules eliminate the need to create reclaims • The rules indicate special road marks that will be used to show car hire with the equipment owner or that the equipment is to be dismantled – DSP 7, DVR 7, DSP 8, SHP 7, SHP 8 and DEAD ©Railinc 2010 All Rights Reserved 42

Special Road marks • Car Hire Rule 7 (107 Incident ) o DSP 7 -- Equipment owner’s account Equipment interchanged to an intermediate carrier after DV/Disposition has been provided o DVR 7 -- Equipment owner’s account DV/Disposition requested but equipment owner has not responded within the 15 day time limit ©Railinc 2010 All Rights Reserved 43

Special Road marks Cont. • Car Hire Rule 7 (107 incident) o SHP 7 -- Equipment owner’s account The equipment reported on-hand at a repair shop. This can occur by an interchange reported showing “SHOP” in the “to road” or the equipment is reported on-hand through DDCTS. o DEAD -- Equipment owner’s account The equipment owner decides to dismantle the equipment. All events after will be marked with LCS Code “X” for inactive. If the equipment was approved for dismantle, but the equipment was not dismantled and returned to service, please contact the Railinc Customer Support Center. ©Railinc 2010 All Rights Reserved 44

Special Road marks Cont. • Car Hire Rule 8 (Incident 108 and 1) o DSP 8 -- Equipment owner’s account Disposition requested o SHP 8 -- Equipment owner’s account Equipment reported on-hand at a repair shop. This can occur by an interchange reported showing “SHOP” in the “to road” or the equipment is reported on-hand through DDCTS. o DEAD -- Equipment owner’s account The equipment owner decides to dismantle the equipment. All events after will be marked with LCS Code “X” for inactive. If the equipment was approved for dismantle, but the equipment was not dismantled and returned to service, please contact the Railinc Customer Support Center. ©Railinc 2010 All Rights Reserved 45

DDCT Interaction with LCS and ER • When an incident is created in DDCT, a TRAIN 10 message will be sent to the Event Repository (ER) • The TRAIN 10 message will flag the equipment to be evaluated by DDCT LCS and LCS will not be evaluating the equipment • Once DDCT LCS is turned on, TRAIN 10 messages sent to the ER from DDCT will be evaluated and GAP records will be created using the special road marks ©Railinc 2010 All Rights Reserved 46

LCS Messaging • TRAIN 61, TRAIN 62, TRAIN 63 and TRAIN 69 messages will be created to show car hire in either a railroad’s account or the equipment owner’s account • The DDCT special road marks will be sent in the “To Road” or “From Road” fields in the TRAIN message • There has been no change to the format of the TRAIN messages ©Railinc 2010 All Rights Reserved 47

Key Events for 107 Description From Road To Road Incident 107 created N/A DV/Disposition requested N/A 15 days hit since DV/Disposition requested Damaging Carrier DVR 7 DV/Disposition Provided after 15 days DVR 7 Damaging Carrier Equipment interchanged after DV/Disposition Intermediate Provided Carrier DSP 7 Offer accepted Damaging Carrier DSP 7 then to DEAD Equipment reported on hand at SHOP Damaging Carrier or DSP 7 SHP 7 ©Railinc 2010 All Rights Reserved 48

Key Events for 1/108 Description From Road To Road Incident Created N/A Disposition requested Handling Carrier DSP 8 Disposition provided N/A Equipment interchanged after DV/Disposition Intermediate Provided Carrier DSP 8 Equipment on-hand at SHOP Intermediate Carrier or DSP 8 SHP 8 Equipment released from SHOP SHP 8 DSP 8 Equipment marked as repaired SHP 8 Handling Carrier ©Railinc 2010 All Rights Reserved 49

Example: Incident 107 EVENT TS FROM MARK TO MARK LCS Code 20 AUG 2010: 13: 38: 00. 000000 PAS V 23 AUG 2010: 11: 30: 00. 000000 PAS V 23 AUG 2010: 12: 30: 00. 000001 PAS V 23 AUG 2010: 12: 42: 00. 000000 PAS ST R 23 AUG 2010: 12: 43: 00. 000000 ST DSP 7 G 23 AUG 2010: 13: 30: 00. 005272 DSP 7 SHP 7 G 23 AUG 2010: 13: 31: 00. 000000 SHP 7 V 23 AUG 2010: 14: 31: 00. 000001 SHP 7 V DESCRIPTION ©Railinc 2010 All Rights Reserved incident created DV_DIPSO requested DV_DISPO provided interchange reported from DC car reported on hand car reported repairs complete 50

Example: Incident 108 EVENT TS FROM MARK TO MARK LCS CODE 20 AUG 2010: 11: 56: 00. 000000 MRL V 23 AUG 2010: 13: 00. 005272 MRL DSP 8 G 23 AUG 2010: 13: 01: 00. 000000 DSP 8 V 23 AUG 2010: 14: 17: 00. 000000 DSP 8 V 23 AUG 2010: 15: 09: 00. 005272 DSP 8 MRL G 23 AUG 2010: 15: 10: 00. 000000 MRL BNSF P 23 AUG 2010: 15: 11: 00. 000000 BNSF DSP 8 G 23 AUG 2010: 15: 16: 00. 005273 DSP 8 SHP 8 G 23 AUG 2010: 15: 17: 00. 000001 SHP 8 V 23 AUG 2010: 16: 17: 00. 000002 SHP 8 V DESCRIPTION ©Railinc 2010 All Rights Reserved incident created DV_DIPSO requested DV_DISPO provided interchange reported from HC car reported on hand car reported repairs complete 51