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CSX Transportation, Inc.

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CSXT Reservation Process Change

Released: Aug 27, 2008

August 27, 2008

To: All CSXT Coal Customers
Re: CSXT Reservation Process Change

CSX Transportation (CSXT) is implementing a change in the Coal Reservation Process effective Friday, September 5, 2008. This change is necessary to improve the scheduling process and has previously been described in the rollout demonstrations of the CSXT Coal Management System. CSXT is implementing the Coal Producers ability to activate a reservation from a loading request by clicking on the Agree to Load function as provided in the ShipCSX Unit Train Management tool located under View Orders task. Customer reservation requests, submitted via ShipCSX, to load a train at a CSXT origin will not transition from Requested to Activated status and will not receive a specific CSX reservation number until the Coal Company has clicked yes, agree to load on the reservation request.

Each CSXT unit train/trainload Coal Producing Company has or should have at least one individual who is assigned to administrate their companys reservation requests. These individuals are assigned the ability to use the Agree to Load functionality by the CSXT eBusiness group. Possessing this functionality is recognition of their authority to accept or reject any reservation requests received from their customers by using the Agree to Load function. Information regarding How to use the Agree to Load function is being provided to each customers Agree to Load designee.

CSXT is requesting that effective Friday, September 5, 2008; these individuals select the reservation requests and activate only those requests for each origin that it can commit to loading during the next seven (7) days (Saturday Sept. 6 thru Friday, Sept 12). Thereafter each day commencing on Saturday September 6th, these individuals will update the next seven (7) days by:

1) Nominating additional reservation requests for Saturday September 13th (by selecting a Yes on the Agree to Load function for that request).

2) Making any load date or train sequencing changes necessary to the Activated and Scheduled loadings listed on that origins seven (7) day ShipCSX calendar with CSXT Coal Operations. Any changes required for scheduled reservations, less than 48 hours prior to their scheduled load date will be subject to penalties as governed by CSXT Tariff 8200 Series.

This process will be continued each day by the Producers designated individual(s), providing a refreshed seven (7) day rolling outlook of what the producer is expecting to load and allow CSXT to concentrate its resources toward those reservations that the origin expects to have the coal quality to load during that period. Once a reservation request has been Agreed to Load by the Coal Producing Company, it will either be loaded or automatically deleted by CSXT, if not moved into the following seven (7) day rolling window. Requests cannot initially be designated with the Yes agreed-to-load within forty-eight (48) hours of their load date because of the time required to coordinate resources.

Reservation requests marked Agree to Load outside of any seven (7) day rolling window period are subject to having the Yes removed by CSXT, thereby requiring the Producer to re-mark them when the 7-day window comes about.

CSXT will limit the number of reservations (trains/cars) that a load origin can agree to load during any seven (7) day rolling period. The load origin will be limited to no more than two (2) additional (train/car) reservations above its previous six week weekly-average (trains/cars) reservations, even though that limitation may be because of CSXT limitations in serving a particular load origin. (The individual load origin owner may request their current demonstrated weekly rating by contacting the CSX Coal Development Department at 800.852.4923 or by e-mail CSXTs intent is not to limit increased production; how ever, CSXT will require additional information and must agree that CSXT is not constrained before increasing an origins weekly capacity rating. CSXT will consider all force-majeure type events that may have negatively impacted a load origins six week weekly-average of (trains/cars)

Any activated or scheduled reservation that has not been loaded, which has a scheduled loading date greater than forty-eight (48) hours from the current date may be moved by the Producer to a subsequent loading date (through communications with the proper CSXT Coal Coordinator), provided the load origins two (2) additional (train/car) reservation capacity limitation is not exceeded during the period in which the reservation is to be moved. If that capacity is exceeded the Producer will be asked to delete a reservation to make room for the moved reservation. Should an origin select more reservation requests than their capacity rating for any seven (7) day rolling period, none of the agree to load activated reservations will be moved to scheduled status and no trains/cars will be assigned until the origin nominates the correct number of reservations and moves/deletes the remaining activated reservations.

These changes are needed immediately to allow CSXT to accommodate the growing demand for coal shipments and to concentrate resources toward reservations that will actually be shipped. CSXT has had far too many trains waiting at origins to load while other origins are requesting trains to be loaded because communication between all of the necessary parties is incomplete. We anticipate this change will have an immediate affect to improve the communication process between the Producer/Receiver and CSXT.

A process flow chart that further illustrates these changes is attached for your perusal.

We thank you for your assistance in implementing this new procedure. If you have any questions, please contact your Coal Development or Coal Marketing Representative.

CSXT Coal Operations