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Sources: Federal Reserve & ATA

Economic & Industry Update March 8, 2011 Bob Costello Chief Economist & Vice President American Trucking Associations. Manufacturing Output. Seasonally Adjusted Level of Output; Index (2007=100). Forecast (annual average). 2000-2013. 3.8%. 3.2%. 4.7%. Sources: Federal Reserve & ATA.

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Sources: Federal Reserve & ATA

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  1. Economic & Industry UpdateMarch 8, 2011Bob CostelloChief Economist & Vice PresidentAmerican Trucking Associations

  2. Manufacturing Output Seasonally Adjusted Level of Output; Index (2007=100) Forecast (annual average) 2000-2013 3.8% 3.2% 4.7% Sources: Federal Reserve & ATA

  3. Retail Sales Billions Billions Seasonally Adjusted Annual Rates; Billions of Dollars Forecast (annual average) 2000-2013 2.6% 3.0% 3.5% Sources: Census Bureau & ATA

  4. Wages Fell, but are Rising Again Private wages & salary disbursements; billions US$, annual rate Sources: Bureau of Economic Analysis and ATA

  5. Household Net Worth Millions 1980 – Q3: 2010 Sources: Federal Reserve and ATA

  6. Household Debt Service Ratio Percentage of Disposable Personal Income 1980 – Q3 2010 Sources: Federal Reserve and ATA

  7. Housing Starts Millions Millions Seasonally Adjusted Annual Rates 2000-2013 Forecast (annual average) 31% 61% 16% Sources: Census Bureau & ATA

  8. Total Business Inventories-to-Sales Ratio (Includes retail, wholesale, and manufacturing; Through December 2010) Sources: Census Bureau and ATA

  9. Retail Inflation Measures Seasonally Adjusted; Year-over-Year Percent Change Through January 2011 Inflation is not a near-term threat, but something to watch in the longer-run. Sources: Department of Labor and ATA

  10. Businesses are Cash Rich Millions 1952 – Q3 2010 Percentage of Liquid Assets to Total Assets Liquid Assets Sources: Federal Reserve and ATA

  11. Real Gross Domestic Product (Real GDP, Annual percent change, 2005 dollars) 2008 – 2011 Long-run Average (3%) Annual GDP Numbers 2009: -2.6% 2010: +2.9% 2011: +3.2% 2012: +2.9% Sources: IHS Global Insight and ATA

  12. The Biggest Concern: Oil Prices

  13. Oil Prices (WTI) Price Per Barrel Source: Wall Street Journal

  14. On-Highway Diesel Prices Price Per Gallon Source: Energy Information Administration

  15. Billions Industry Diesel Expense Forecast Forecasts are derived from EIA diesel price forecasts and ATA truck freight volume forecasts. Sources: ATA, EIA, and Highway Statistics

  16. Motor Carrier Trends Demand

  17. For-Hire Truck TonnageAnnual Percent Change Includes TL & LTL Source: ATA’s Monthly Truck Tonnage Report

  18. ATA’s For-Hire Truck Tonnage Index Seasonally Adjusted; 2000 = 100 Through January2011 Source: ATA’s Monthly Truck Tonnage Report

  19. For-Hire TL LoadsAnnual Percent Change Source: ATA’sTrucking Activity Report

  20. ATA’s For-Hire TL Loads Index Seasonally Adjusted; 2000 = 100 Through December 2010 Source: ATA’sTrucking Activity Report

  21. Loads by TL Sector2010 Compared with 2009 Source: ATA’s Trucking Activity Report

  22. ATA’s For-Hire TL & LTL Revenue Indexes Seasonally Adjusted; 2000 = 100 TL average Revenue/Mile LTL average Revenue/Ton Through December 2010 Source: ATA’sTrucking Activity Report

  23. Motor Carrier Trends Supply Capacity Additions or Replacements?

  24. U.S. Class 8 TrucksAverage Age 1995-2010 Sources: ACT Research & ATA

  25. U.S. Class 8 Truck Sales Monthly Retail Sales; Through January 2011 • Annual Figures • 2005: 253k • 2006: 284k • 2007: 151k • 2008: 133k • : 95k • : 106k • : 111k • (rate from Jan only) Source: Wards

  26. Illustration: Trade Cycle of a 2005 OTR Tractor Normal Mileage vs Actual and Projected Mileage Trade Point: 550,000 Miles Normal Mileage: 115,000/Year Actual Mileage based on average miles per truck per year from fleet surveys. Projected Mileage: 100,000 in 2010 and 115,000 in 2011. Source: ATA

  27. Maintenance Costs per Mile Sources: TMC, Motor Carrier Annual Reports, and ATA

  28. Truck Purchase Decision This example is for illustration purposes only. Actual numbers may vary. 2006 2010

  29. Trucking Failures Failures only includes fleets with at least five trucks Source: Avondale Partners, LLC

  30. For-Hire TL Supply vs Demand 2005 = 100 TL Loads Index TL Tractor Count Index Oversupply Through December 2010 Source: ATA

  31. Cost Pressures from All Directions

  32. Thanks! Questions?

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