First Research Industry Profiles: Trucking

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INDUSTRY:

Trucking LAST QUARTERLY UPDATE:

2/20/2006 CATEGORY:

Transportation, Energy, and Storage SIC CODES:

4213 NAICS CODES:

484110, 484120

INDUSTRY OVERVIEW The US trucking industry has annual revenue of about $165 billion, and includes about 40,000 companies and 30,000 independent contractors. Big companies include Yellow Roadway, Schneider National, CNF, and JB Hunt, with annual revenues over $1 billion. The industry also contains several dozen regional companies with revenue above $100 million and about 2,000 firms with revenue above $5 million. Despite strong consolidation in recent years, the industry remains fragmented. The 50 largest companies hold less than 30 percent of the market.

COMPETITIVE LANDSCAPE Demand for trucking services is closely tied to the overall health of the economy, especially to levels of manufacturing, retail sales, and international trade. Because of the high cost of trucks, the profitability of individual companies depends on efficient operations and the volume of business they handle. Large companies can best serve large customers and may have more effective marketing operations and economies of scale in buying fuel. Small companies can compete effectively by offering faster service and may also have lower costs. Average annual revenue per employee is about $120,000.

PRODUCTS, OPERATIONS & TECHNOLOGY About 70 percent of industry revenue comes from long-distance trucking and 30 percent from short-haul and local trucking. The major types of trucks used are dry van, flatbed, refrigerated, bulk, and tank. The type of operation a trucker runs depends on the type of shipments handled. Some truckers handle only truckload (TL) shipments that go from a single customer to a single delivery point. Some handle only less-than-truckload (LTL) shipments that are collected into one truck and then go to several delivery points. TL shipments are the largest part of the market. The customer typically loads a trailer and the trucker delivers it to a destination where the receiver unloads it. Because it goes directly, the shipment is usually delivered within 1 or 2 days, depending on the distance. LTL shipments (under 10,000 pounds) are a smaller but faster-growing part of the market. In local markets, LTL truckers may collect loads from several customers and deliver them directly to local destinations, or may operate a local terminal where all loads are received and then transferred to delivery trucks. For regional or national delivery, truckers must operate a network of terminals that receive and distribute locally, connected by long-distance routes. Delivery times for LTL shipments may be from 2 to 5 days due to the transfers required. Because of the cost of building and operating a large network of terminals, this segment of the market is highly concentrated: the top 50 companies control more than 80 percent of the segment. Logistics (arranging, consolidating, timing, and monitoring shipments) are an especially important activity for large LTL truckers, who can cut costs significantly through efficient operations. Trucks ("revenue equipment") are of several types. Local delivery trucks are often one-piece vans, but most industry trucks consist of two pieces: a tractor and a trailer. Companies often own 3 trailers for each tractor, because trailers are dropped off for customers to load and unload, while the more expensive driver and tractor go to the next job. Major tractor manufacturers are Mack, Freightliner, and Peterbilt.

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Great Dane is a major trailer manufacturer. Tractors usually travel more than 100,000 miles per year and may be driven more than 500,000 miles before being replaced. Large companies typically perform their own truck maintenance; small ones may outsource this function. Drivers are the largest expense (and biggest management problem) for truckers. Because of their high cost, companies try to use drivers efficiently and retain their best ones. Many drivers belong to the Teamsters Union, which negotiates a National Master Freight Agreement that sets wages and work rules for many unionized truckers. Companies hire their own drivers but also contract with independent contractors (owner-operators) who drive their own tractors, typically pay all their own expenses, and are often paid on a rate-per-mile basis. Diesel fuel is another major expense. Because the cost of fuel can vary substantially from month to month, large truckers may keep large inventories on hand. During periods of exceptionally high prices, truckers add fuel surcharges to their regular rates. Computer and telecommunications technology make trucking much more efficient but are also expensive. Scheduling is typically handled by sophisticated computer systems that can track and direct individual trucks equipped with GPS (Global Positioning System) devices. GPS devices are also used to keep track of parked trailers. Trucks may contain computer systems that constantly monitor speed and fuel consumption, and that determine maintenance schedules.

SALES & MARKETING A network of agents and shippers handle marketing and sales for most truckers, who sell services to a wide range of customers. Truckers seek long-term relationships with large customers through "dedicated" contracts. Freight rates are different for TL and LTL shipments. Pricing is relatively stable in the long-distance LTL segment of the market, more volatile in local markets due to fierce local competition. (Barriers to entry are lower for local truckers.) Freight rates for TL shipments are quoted in dollar per mile ($2 per mile might be typical for furniture). LTL freight rates are calculated based on weight, distance, and type of freight.

FINANCE & REGULATION Trucking revenue is somewhat seasonal because many shipments are made before the winter holiday selling season. Receivables are often 30 to 60 days sales. Inventories of fuel can be significant. Trucks are the major financial asset. New tractors cost over $100,000. A used tractor with 400,000 miles may cost $50,000. Truckers operate in a largely deregulated industry, although the US DOT and various state agencies regulate truck specifications and safety standards. Deregulation began in the 1980s and culminated with the abolition of the Interstate Commerce Commission in 1996. Concerns about trucking safety led to the creation of the Federal Motor Carrier Safety Administration (FMCSA) in 2000. Truckers who operate their own fuel depots or maintenance centers may have environmental problems with ground contamination or disposal of toxic wastes.

REGIONAL & INTERNATIONAL ISSUES Under the North American Free Trade Agreement (NAFTA), Mexican-based truckers can operate in the US beyond the border commercial zones if they meet certain regulations designed to ensure safety. The number of Mexican truckers that meet the requirements will grow. Until recently, the large amount of truck traffic with Mexico had to be transferred within the border zones.

HUMAN RESOURCES Trucking is a semiskilled occupation that commands above-average compensation. Deregulation has allowed easy entry into the industry by companies using nonunion, lower-paid drivers, which has kept wage increases low in recent years. NAFTA will soon give Mexican truckers full access to US highways, which will further restrain wage increases for drivers. Annual turnover among drivers in any one company can be 100 percent. Average annual driver earnings are about $40,000. Safety in the industry has increased rapidly in the past decade. The annual rate of illness and injury per 100 workers was down to seven cases in 2003, versus five for all US workers. Nonetheless, about 4,000 truckers are killed in driving accidents each year and 100,000 trucks are involved in injury crashes (out of eight million registered trucks).

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Industry Employment Growth Bureau of Labor Statistics

Average Hourly Earnings & Annual Wage Increase Bureau of Labor Statistics

RECENT DEVELOPMENTS QUARTERLY INDUSTRY UPDATE Truck Tonnage Drops, Growing Long-Term - Total tons of cargo moved by truck in the US dipped slightly in December, but are expected to continue growing in 2006. The Truck Tonnage Index (TTI), a measure of trucking volume by the American Trucking Association (ATA), fell 3 percent from November to December 2005, yet was still 0.6 percent higher than in December 2004. Over the whole of 2005, trucking volume increased by 2 percent over 2004, and industry insiders expect continued growth in 2006. The ATA says truck tonnage growth may have been limited by capacity in 2005, suggesting fleet expansion may allow further tonnage increases. Heavy-Duty Truck Sales At Record Level - Sales of Class 8 trucks reached a record level in 2005, signaling strength in the trucking sector. Sales of class 8 trucks, defined as less than 5 axle tractors with a single trailer, totaled 252,792 in 2005, up 24 percent from 203,197 Class 8 trucks in 2004, according to Ward’s Automotive and The Trucker magazine. Most of the new trucks were produced by Freightliner, followed by International. Higher truck sales may indicate rising forecasted future demand for moving cargo via trucking services and greater replacement rates of existing fleets. Growing Shortage of Truck Drivers - Trucking firms may have difficulty hiring drivers as a labor shortage in the heavy-duty truck driving segment persists. In the US long-haul, heavy-duty truck segment, there is currently a shortage of 20,000 truck drivers, according to ATA. At the current pace of labor force growth and demographic trends, the shortage could balloon to 111,000 by 2014. As a result, qualified truck drivers are in high demand and may be able to negotiate higher compensation or other benefits. Diesel Fuel Prices Marching Upward - Diesel fuel prices continue to climb far beyond previous year levels and add to expenses for trucking firms. The average US price per gallon of diesel fuel on January 30, 2006, was $2.49, up 50 cents (25 percent) from one year previous based on Department of Energy data. Regionally, prices were highest in California at $2.73 per gallon, and lowest in the Midwest at $2.43 per gallon. The price of diesel fuel is a major variable cost for trucking firms and thus may directly affect profits.

BUSINESS CHALLENGES CRITICAL ISSUES Highly Dependent on Flow of Goods - The volume of goods moved by the trucking industry is closely

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tied to the overall health of the national economy, measured by factory output and retail sales. For example, during the 2001 recession, US manufacturing production dropped 5 percent and imports of manufactured goods dropped 4. During periods of lower revenue, trucking profits are disproportionately hurt because fixed costs are fairly high. The value of US durable goods manufacturing shipments rose 6.2 percent in 2005 compared to 2004, indicating a rise in demand for product transport. Vulnerable to High Fuel Prices - For truck fleets, fuel costs are the second-highest operating expense next to labor, and typically represent 10 to 20 percent of expenses. Most fleets try to pass increased fuel costs to shippers. In recent years, diesel prices have sometimes increased 25 percent within 12 months. Retail diesel prices are expected to average $2.51 per gallon in 2006, up 4.1 percent from 2005, before gradually retreating to $2.42 per gallon in 2007.

OTHER BUSINESS CHALLENGES High Personnel Turnover - Many trucking companies have high driver turnover; annual turnover may be close to 100 percent. To attract and keep drivers, some long-haul firms guarantee shorter trips by switching drivers at mid-way terminals. Because driver costs are the largest expense of trucking, firms have little leeway to raise salaries. Customer or Industry Concentration - Many trucking firms receive a large portion of their business from just a few big customers or customers all in the same industry; such concentration leaves them exposed to special credit or economic forces. The trend to more corporate outsourcing of trucking has intensified this, as some truckers now are virtual subsidiaries of large customers. Ease of Entry - Because trucking requires just a truck and a driver, many small operators can enter when demand is strong, keeping rates and profit margins low, especially in less-than-truckload (LTL) local markets. In the long-haul market, a large number of independent truck owner-operators operate. Driver Safety Issues - Although trucks make up 3 percent of all vehicles, they account for 9 percent of all road fatalities. Substance abuse testing has prevented more fatalities, but time pressures and inexperienced drivers cause speeding and reckless driving. Low profit margins in trucking also encourage companies to skip maintenance. Freight Theft - American Trucking Association (ATA) is calling on truckers and shippers to adopt new security standards to fight the $1 billion-per-month freight theft problem in the US. Fences, gates, and cameras for heavier security cost money, as does time lost due to tighter and more thorough load inspections. High freight losses result in higher trucker insurance costs.

TRENDS AND OPPORTUNITIES BUSINESS TRENDS Increased Competition - Trucking deregulation has caused fierce rate competition. New truckers in the industry, especially in the truckload (TL) segment, which doesn't require the same capital investment as longer-than-truckload (LTL) operations, have cut operating margins and forced all operators to become more efficient or sell out. Competition has prompted companies to buy trucks with new technology that reduces accidents, curbs diesel exhaust, and indirectly decreases driver turnover. Consolidation - The inability of many midsized truckers to compete with the service efficiency of national companies, on the one hand, and the price-cutting of small local operators, on the other, has resulted in an industry structure of a few large companies and many small ones. Midsized companies have had to merge to survive. Value-Line Investment Survey says that mergers and acquisitions will accelerate in the next two years partly because large companies can be more competitive in driver pay and benefits. Nonunionized Subsidiaries - Some high-cost unionized national truckers, such as Yellow Freight, have started nonunionized subsidiaries to compete in regional markets. Information Technology (IT) Helps Truckers - Large truckers are among the most sophisticated users of IT. Most in-cab systems include basic management and dispatching software, and many daily operations are from a central desktop, which enables operational information on equipment and drivers

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to be gathered. And instructions sent between drivers and dispatchers can be clarified and dispatchers can maintain constant communication with drivers. Many newer in-cab systems send manifests, bills of lading, and pickup and drop-off instructions. The new systems are incorporating bar code readers, signature capture, and radio frequency signal capture, and these features allow seals, pallet and product identifiers, and customer signatures to be captured electronically and transferred to the home office or directly to the shipper. Knowledge of computer systems used to run their own operations has led some truckers to expand into courier services and provide logistics' services to large customers. Alternative Fuels - Increased attention to environmental concerns, especially air pollution, has initiated additional research into alternative fuels to replace regular diesel. In states like California, liquefied natural gas-fueled trucks are replacing diesel-fueled long-haul trucks. Biodiesel, a cleaner-burning diesel fuel made from natural sources like vegetable oil, has been introduced. The Army is testing alternative fuels, such as battery-like fuel cells and liquid fuels made from coal, oil, natural gas, and waste products, for the National Energy Technology Laboratory. Low-sulfur diesel is being required by new EPA standards. Transition to Trucking - US shippers are gradually moving from overnight air shipping to rely more on trucking, which is cheaper. Shippers are changing buying patterns and shifting from overnight to two- to three-day delivery. Small air freighters are falling from favor because those airplanes can be easily be replaced by trucks, which cost one-tenth of the price of air shipping, according to MergeGlobal.

INDUSTRY OPPORTUNITIES Outsourcing - Heavy users of trucking, abandoning their own fleets to take advantage of lower-cost trucking services (sometimes through "dedicated contracts") and just-in-time (JIT) inventory management techniques that rely on truckload delivery of components, have boosted the truckload (TL) segment. Service regionalization has steadily eroded the traditional "greater than 1,500 miles" length of freight haul. Regionalization is primarily due to trends such as JIT inventory practices, distributed warehousing, and new longer length-of-haul by regional and parcel carriers. E-commerce - Business-to-business and business-to-consumer sales have fueled growth, as distant sales demand more freight services. Truckers are taking on added roles as more manufacturers demand JIT parts' delivery and as more consumers buy from mail-order catalogs and the Web. Longer Combination Vehicles (LCVs) - By using longer trucks, firms can use their drivers, their biggest expense, more efficiently. Federal regulations limit the size of combination vehicles - trucks with two or three trailers - and states limit their use to certain routes. Some states, including California, don't allow LCVs. Special driver education is required but efficiency can be improved by up to 100 percent.

CALL PREPARATION QUESTIONS CONVERSATION STARTERS How does the company manage fluctuations in manufacturing and retail demand for shipping? The volume of goods moved by the trucking industry is closely tied to the overall health of the national economy, measured by factory output and retail sales. How does the company deal with changing fuel costs? For truck fleets, fuel costs are the second-highest operating expense next to labor, and typically represent 10 to 20 percent of expenses. How successful are the company's recruitment and retention efforts in reducing driver turnover? Many trucking companies have high driver turnover; annual turnover may be close to 100 percent. How is the company positioned to take advantage of manufacturers outsourcing shipping needs? Heavy users of trucking, abandoning their own fleets to take advantage of lower-cost trucking services (sometimes through "dedicated contracts") and just-in-time (JIT) inventory management techniques that rely on truckload delivery of components, have boosted the truckload (TL) segment. How is the company benefiting from growth of e-commerce sales? Business-to-business and business-to-consumer sales have fueled growth, as distant sales demand more freight services.

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Does the company plan to use longer combination vehicles (LCV) on long-haul trips? By using longer trucks, firms can use their drivers, their biggest expense, more efficiently.

QUARTERLY INDUSTRY UPDATE QUESTIONS How have volume demand affected the company’s fleet needs? Data suggest the trucking industry may have been limited by capacity in 2005, causing sales of heavy-duty trucks to increase in anticipation of further growth in 2006. To what extent has the company experienced difficulty finding and hiring qualified drivers? The shortage of truck drivers in the US is expected to grow as many older drivers retire and replacement drivers fail to enter the workforce at a pace matching growth in demand for their services.

OPERATIONS, PRODUCTS AND FACILITIES QUESTIONS Is the company in the less-than-truckload (LTL) or truck load (TL) segment? The TL segment accounts for 70 percent of all freight revenues. If TL, does the firm specialize in refrigerated, dry van, flatbed, or bulk (tank) services? Specialized equipment at higher equipment and insurance expense is required for some of these services. How many tractors, trailers, and terminal assets does the company own? Trucks ("revenue equipment") consist of tractors (the engine part of the truck) and trailers. What is the average age of the company's tractors? The average age of tractors in some large companies is under two years. How many of the company's truck fleet are over four years old? The big trucks have an average life cycle of about four to five years, or 500,000 to 600,000 miles. How does the company deal with changing fuel costs? Some companies buy fuel in bulk when fuel prices escalate or charge fuel surcharges.

CUSTOMERS, MARKETING, PRICING, COMPETITION QUESTIONS What territory does the company cover? Service regionalization has caused the steady erosion of the traditional "greater than 1,500 miles" length of freight haul. Regionalization is primarily due to trends such as just-in-time (JIT) inventory practices, distributed warehousing, and new longer length-of-haul by regional and parcel carriers. Who are the company's major customers? Many truckers have repeat business. How does the company find new business? A network of agents and shippers handle marketing and sales. E-commerce is emerging as way to find new business. Has the company raised its rates recently? Rate increases are often difficult because of very strong competition.

REGULATION, R&D, IMPORT, AND EXPORT QUESTIONS Is the workforce unionized? Many truck drivers belong to the Teamsters Union. Has deregulation been good or bad for the industry? Trucking deregulation, which started in the 1980s with the Motor Carrier Act, has increased competition and created opportunities for thousands of new owner/operators who historically couldn't have entered the business. What measures has the company taken to increase driver safety? Driver fatigue is the greatest cause of accidents. What anti-terrorist measures has the company introduced? Greater examination of cargos and background checks of drivers are more common. Procedures for

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carrying hazardous materials have been reviewed and drivers given additional training.

ORGANIZATION AND MANAGEMENT QUESTIONS Does the company hire its own drivers or use owner/operators? Companies hire their own drivers but also contract with owner/operators who drive their own tractors, typically pay all their own expenses, and are paid rate-per-mile. How does the company recruit drivers? Labor is the largest expense and issue for the trucking industry. What employee screening and training programs does the company have? What is the company's safety record? Trucking-related accidents result in 4,000 deaths in the US per year.

FINANCIAL ANALYSIS QUESTIONS Is the company's cash flow uneven throughout the year? Company cash flows often follow the cyclical nature of manufacturing and retail industries. Does the company have receivables concentrated in a few large customers? Many smaller companies depend on just a few customers for most of their business. How does the company handle short-term cash surpluses or deficits?

BUSINESS AND TECHNOLOGY STRATEGY QUESTIONS Does the company plan to expand into other markets? Does the company plan to add specialty trucking services? Special trucks are used to haul certain kinds of goods. Does the company use computerized communications links to tractors? Large truckers are among the most sophisticated users of information technology (IT). Werner equips all its tractors with satellite communication devices to track truck movements, log driver hours, monitor engine performance, and allow communication between drivers and schedulers. Does the company have merger or acquisition plans? Many midsized truckers are squeezed by the greater efficiency of national companies on one hand and price-cutting by small local operators on the other. Further industry consolidation is expected.

FINANCIAL INFORMATION SMALL COMPANY FINANCIAL BENCHMARK INFORMATION Portions of data excerpted from The 2005 Almanac of Business and Financial Ratios, Copyright © 2005 by CCH Incorporated. All rights reserved. To order the complete book go to http://tax.cchgroup.com. "Truck Transportation" (484000)

Category

$158 Billion

Total Receipts Number of Enterprises

84,746

Average Total Receipts

$1,867,000

Income Statement Data*

Balance Sheet Data

Cost of Operations

30.1%

Current Ratio

1.1x

Advertising

0.2%

Quick Ratio

0.9x

Officers' Compensation

1.9%

Total Liabilities/ Net Worth

2.6x

Operating Margin

N/A

Inventory Turnover

82.2x

Depreciation

5.7%

Receivables Turnover

9.9x

Employee Benefits

2.7%

Cash Flow to Total Debt

1.4x

Return on Equity (AIT)

2.5%

Return on Total Assets

4.7%

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1.4x

Coverage Ratio**

* Data presented as a percentage of operating income. N/A = not available. ** Coverage Ratio-the number of times all interest paid by the company is covered by earnings before interest charges and taxes (EBIT.) For that reason, the ratio is also known as the "times interest earned ratio." The ratio indicates the company's ability to service its debt based on its income.

SELECTED PUBLIC COMPANY FINANCIAL INFORMATION Fiscal Year Ended 2004 Revenue

Gross Margin

Net Margin

Total Debt / EBITDA

Return on Equity

Liab. / Net Worth

Current Ratio

Days Recev.

Werner Enterprises

$1,678

55%

5%

2.7x

11%

0.6

2.2

43

USFreightways

$2,408

4%

1%

3.4x

3%

1.1

1.9

53

Yellow Corp

$6,767

27%

3%

2.3x

15%

2

0.9

46

in millions of US dollars

VALUATION MULTIPLES Trucking Acquisition multiples below are calculated using at least 15 private, middle-market (valued at less than $1 billion) industry transactions completed between 1/1995 and 7/2005. Last annual update: January 2006. Valuation Multiple Equity/Net Sales Median Value

0.4

Equity/Net Income

MVIC/Net Sales

MVIC/EBIT

9.2

0.4

8.8

Equity (Equity price) = Reported selling price MVIC (Market Value of Invested Capital) = Equity price + Long-term liabilities assumed EBIT (Earnings Before Interest & Taxes) = Net Income + Interest expense + Taxes SOURCE: Pratt's Stats™ (Portland, OR: Business Valuation Resources, LLC) To purchase more detailed information, please either visit www.BVMarketData.com sm or call Business Valuation Resources at 888-287-8258.

TRADE ASSOCIATION BENCHMARKING STATISTICS 2003 Industry Performance Averages - American Trucking Association (ATA) The American Trucking Association (ATA) is an association with many resources. Each year the ATA publishes Twenty From the Top, a benchmarking guide to the operations of for-hire truckload carriers that examines 20 of the best managed and most profitable companies from 6 trucking industry segments. The data is categorized by firm type and size. ATA also publishes American Trucking Trends, US Freight Transportation Forecast, Motor Carrier Annual Report, and more. Below is an abstract of Twenty From the Top 2003, provided by the ATA, which contains an abundance of in-depth benchmarking data, statistics, and ratios on the top 20 carriers of general freight* with revenue less than $50 million as compiled by the ATA. ALL TWENTY CARRIERS

2000

2001

2002

Operating Expenses (cents/mile)

134.72

130.51

128.08

Salaries, Wages, Fringe Benefits

40.12

33.06

30.62

Operating Taxes & Licenses

4.49

3.13

2.78

Total Insurance

4.30

5.06

5.39

Depreciation & Amortization

9.11

9.51

8.72

Equipment Rents & Purchased Transportation

32.57

43.09

49.89

Other Expenses

10.75

5.64

5.75

Operating Ratio (as a %)

93.67

94.12

92.49

3.34

3.82

4.77

Average Annual Miles Per Power Unit

116,121

133,821

135,309

Operating Expense Per Power Unit ($)

156,440

175,090

175,178

Net Profit Margin (as a %)

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Find out more about purchasing this publication by calling (703) 838-1700 or by going to http://www.ttnews.com/20top/20Top.asp. *General Freight - Relative to the best managed and most profitable companies. Power Units (tractor) - The control and pulling vehicle for trailers and semitrailers. Trailer - A vehicle designed without motive power, to be drawn by another vehicle. Tractor Semitrailer - A combination vehicle consisting of a power unit (tractor) and a semitrailer. Note: Trucking companies focus on cents/mile statistics as a benchmark in order to understand its management of operating expenses. OTHER ATA PUBLICATIONS Motor Carrier Annual Report Contains motor carrier financial and operating statistics, balance sheets, income statements, revenue/expense details, employee and equipment counts, and more. Includes detailed summaries on over 1,400 individual Class I and II carrier reports based on the comprehensive annual reports filed with the Department of Transportation. US Freight Transportation Forecast...To 2014 Presents the most current year's estimates as well as forecasts ten years out for both the volume and revenues generated by examining the transportation industry's current economic landscape. Forecasts based upon modal volume, revenue, and market share size. American Trucking Trends 2003 Provides a wealth of trucking data including industry size, trucking employment, earnings, safety, taxes, retail sales, diesel prices, operating expenses, and international trucking, as well as additional in-depth subjects. Includes an explanation of easy-to-read graphics, tables, and charts by ATA's chief economist. Each of these publications is valuable for First Research users. Find out more about purchasing these products by calling (800) 282-5463 or by going to http://www.truckline.com/store.

INDUSTRY FORECAST The output of US trucking and warehousing services is forecast to increase at an annual compounded rate of 4.6 percent between 2005 and 2008. Trucking and Warehousing Growth Slowing

Source: IERF, Inc. First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.

WEBSITE AND MEDIA LINKS American Trucking Association General information, news, and a useful search engine. Bureau of Transportation Statistics A US Department of Transportation site that provides databases, state and local information and more. Commercial Vehicle Safety Alliance News highlights, events, publications, information on inspections and safety. eTrucker.com A wealth of recent trucking news. Federal Motor Carrier Safety Administration Safety regulations for trucks. Safety statistics.

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International Brotherhood of Teamsters Information on the most important labor union in the trucking industry. Owner-Operator Independent Drivers Association Industry news. Industry issues. The Trucker News. Traffic World Industry news. Industry issues. Transport Topics News Articles Excellent news, a chart of the top 100 trucking companies, and more. Truck.net Industry news. Trucker.com Industry news, trade shows, associations, manufacturers links, buy and sell trailers and trucks. Trucking Info Latest news, information, research, product and services guides, diesel prices, road conditions, industry links. US Department of Transportation Government information on the transportation industry.

GLOSSARY OF ACRONYMS ATA - American Trucking Association CDL - Commercial Driver License DOT - Department of Transportation EPA - Environmental Protection Agency FHA - Federal Highway Administration FMCSA - Federal Motor Carrier Safety Administration GPS - Global Positioning System HOS - Hours of Service IT - information technology JIT - just-in-time LCV - Longer Combination Vehicles LTL - Less Than Truckload; a load of less than 10,000 pounds MSD - Musculoskeletal Disorders TL - Truckload “The purpose of the Profiles is for sales call preparation and general business and industry analysis. Profiles provide general background information only and are not intended to furnish detailed information about the creditworthiness of any individual borrower or purchaser or to be used for making any loans, leases or extension of credit to any individual borrower or purchaser. First Research, Inc. is not an investment advisor, nor is it in the business of advising others as to the value of securities or the advisability of investing in securities, and the Profiles are not intended to be relied upon or used for investment purposes.”

© Copyright 2006, First Research, Inc. All Rights Reserved. This information cannot be copied, sold or distributed in any manner without the written permission of First Research, Inc. www.firstresearch.com

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