THANK YOU TO OUR SPONSORS

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1 THANK YOU TO OUR SPONSORS

2 General Session 2 Data Driving Your Recruiting & Retention Decisions Bob Costello, Chief Economist & Senior VP, American Trucking Association

3 Bob Costello ATA Chief Economist & Senior Vice President

4 Duration and Strength of Recent Expansions Q4:1982 Q3:1990 (4.3%) Q1:1991 Q1:2001 (3.6%) Q1:1975 Q1:1980 (4.3%) Q4:2001 Q4:2007 (2.8%) Q2:2009-today (2.2%) (Average annual change in GDP by expansion) Q3:1980 Q3:1981 (4.4%) Expansion in Quarters Sources: ATA, BEA, WSJ and NBER

5 Quarterly Real GDP & Forecasts 6% 5% 5.0% % 1.6% 2.3% 2.7% 4% 4.0% 3.5% 3% 2% 2.3% 2.0% 2.6% 2.0% 1.4% 1.9% 2.1% 2.2% 2.8% 2.5% 1% 0.9% 0.8% 0% -1% -2% -1.2% Q Q Q Q Sources: BEA & ATA

6 Monthly Job Changes (Thousands) Job Market Unemployment Rate (Percent) % 4.9% 4.6% 4.3% Sources: BLS & ATA

7 Real Personal Disposable Income Growth 4% 3.5% 3.5% 3% 3.1% 2.7% 2.7% 2% 1.6% 1% 0% Avg Avg Avg Sources: BEA & ATA

8 Real Personal Consumption Growth (Goods Only) 5% 4% 4.1% 3.3% 4.0% 3.6% 3.9% 3.9% 3% 2% 1% 0% Avg Avg Avg Sources: BEA & ATA

9 Housing Starts Are Leveling Off At a Sustainable Pace Housing Starts (Monthly; Annualized Rate; Millions) New Permits (Monthly; Annualized Rate; Millions) H.S M 1.17 M 1.23 M Sources: Census & ATA

10 4% Factory Output 3% 3.0% 2.6% 2% 2.0% 1% 1.1% 1.2% 0.3% 0% Avg Avg Avg Sources: Federal Reserve & ATA

11 Factory Jobs vs Factory Output Index; January 1990 = Jobs Output % % Sources: Department of Labor, Federal Reserve and ATA

12 Total Business Inventory-to-Sales Ratio (Data adjusted for seasonal, holiday, and trading-day differences, but not price changes) Likely Optimal Range Source: Census Bureau

13 Freight Trends

14 Total TL Loads Index: 2000=100; 3-Month Moving Average Includes Dry Van, Flatbed, Temp Controlled, and Tank Truck Source: ATA s Trucking Activity Report

15 8% Truckload Loads 7% 6% 6.2% 5% 4% 3% 2% 2.6% 2.0% 1% 0% 0.9% 1.0% 0.1% Avg Avg Avg Source: ATA

16 Source: ATA s Trucking Activity Report LTL Tonnage Index: 2000=100; 3-Month Moving Average

17 8% LTL Tonnage 7% 6% 5.7% 5% 4.4% 4% 3% 2% 1% 1.9% 0.9% 1.1% 0% -1% -2% Avg Avg Avg % Source: ATA

18 Capacity Trends

19 US Retail Class 8 Truck Sales Thousands Includes Tractors & Straight Trucks Source: ATA s American Trucking Trends 2016 & ACT Research

20 5% Truckload Tractor Fleet Changes 4% 3% 2% 1.8% 1.9% 1% 0% -1% -0.2% 0.9% 0.1% -2% -3% -4% -5% -3.9% % Source: ATA

21 10% LTL Truck Fleet Changes 5% 1.7% 4.0% 5.6% 0% -1.7% -0.2% -5% -4.3% -10% -11.0% -15% Source: ATA

22 Driver Trends

23 Truck Driver Shortage Does not account for future regulations or quality issues. Source: ATA s Truck Driver Shortage Analysis 2015

24 100% 90% 80% Truckload 83% LTL 98% 98% 95% 93% 84% 70% 60% 50% 52% 40% 30% 20% 10% 9% 8% 8% 11% 12% 11% 10% 0% is the annualized rate for the Q1-Q3 period. Source: ATA s Trucking Activity Report

25 Source: ATA s Trucking Activity Report

26 Dry Van Average Length-Of-Haul is Down 796 miles Source: ATA

27 Average Number of New Drivers Needed Per Year Over the Next 10 Years: 89,000 Voluntary Non- Retirement Departures 11% Non-Voluntary Departures 7% Industry Growth 34% Retirements 48% Source: ATA Benchmarking Guide for Driver Recruitment & Retention

28 Impact of ELDs 1. Truckstop.com survey of 1,300 carriers, with vast majority operating fewer than 6 trucks, 84% had no ELDs on any trucks. Less than 50% of trucks have ELDs and it is likely less than 40%. 2. TL fleets that have already adopted are generally larger and more sophisticated than most of those that haven t. So, productivity impact could be larger than fleets have seen so far. 3. What if just 1% to 3% of drivers leave the market for a host of reasons, including cheaters, anti-technology, anti-big government, or just don t want to change? 4. Some carriers are likely to exit the industry.

29 Annual Employee Driver Compensation 2013 Median Pay Including Incentives and Bonuses TL Nat'l Irregular Route Van $46,084 Flatbed Van Dedicated $50,000 $50,800 LTL Local P&D All Carriers Tank Truck OTR Refrigerated $54,585 $55,000 $56,000 LTL OTR Private: Non-Van $63,000 $65,000 Private: Van Only $73,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 *Solo Drivers Only

30 Carriers Utilize Multiple Base Pay Packages 1% 76% of companies pay employee drivers two or more ways 12% 23% One Type of Base Pay Two Types of Base Pay 21% Three Types of Base Pay Four Types of Base Pay Five Types of Base Pay 42%

31 Know where you stand. Know where you can improve. Source: Strategic Programs, Inc.

32 Demand for Drivers Will Remain High

33 All Modes of Freight Transportation Will Grow Total Increase in Tonnage from 2015 to 2027 Source: U.S. Freight Transportation Forecast to 2027

34 Distribution of Tonnage by Mode: 2015 vs 2027 Air 0.1% Truck 70.1% Rail Carload 12.5% Rail Intermodal 1.6% Water 4.5% Truck 66.4% Pipeline 10.4% Water 5.6% Pipeline 17.4% Air 0.1% Rail Intermodal 1.3% Rail Carload 10.0% Source: U.S. Freight Transportation Forecast to 2027

35 Thanks

36 THANK YOU TO OUR SPONSORS