Geoffrey Muessig, EVP/Chief Marketing Officer, PITT OHIO Government Transportation Forum April 23, 2014

Government Transportation Forum April 23, 2014 Summary  Overview of the LTL Industry  Differences between regional and long haul networks.  SWOT Analysis - what are the strengths and weaknesses of regional trucking?  Emerging LTL Industry Trends

Government Transportation Forum April 23, 2014 LTL Industry Developments The barriers to entry are rising:  Capital intensive business  Increased regulation is leading to an industry wide driver shortage  Terminal NIMBY issue  Technology requirements  Increasing penetration of freight brokers  Cyclical markets – easy to generate cash flow but hard to turn a profit. The LTL industry is becoming more concentrated.  Top 25 LTL carriers control 90% of the market  Top 8 LTL carriers control 65% of the market. Source: SJ Consulting Group, Inc.

Government Transportation Forum April 23, 2014 Who Are the Top 20 LTL Players 2013 Rank Top 20 Carriers 1 FedEx FreightNationwide 2 Con-way FreightNationwide 3 YRC FreightNationwide 4 UPS FreightNationwide 5 Old Dominion Freight LineNationwide 6 Estes Express LinesNationwide 7 YRC RegionalRegional 8 ABF Freight SystemNationwide 9 R+L Carriers*Multi-regional 10 Saia Motor Freight LineMulti-regional 11 Southeastern Freight Lines*Regional 12 Averitt ExpressRegional 13 Roadrunner TransportationMulti-regional 14 AAA CooperRegional 15 Central Transport Intl.Regional 16 Dayton Freight Lines*Regional 17 PITT OHIORegional 18 New England Motor FreightRegional 19 A. Duie Pyle*Regional 20 Central Freight Lines*Regional

Government Transportation Forum April 23, 2014 Regional Trucking  Regional Focus  Full state and all points coverage – minimal reliance on agents to serve remote markets.  Privately Held, Family Owned  Focus on next day delivery  Partnerships for inter-regional service

Government Transportation Forum April 23, 2014 Operations are Configured Differently  Precisely scheduled departures vs load factor  Direct loading vs break bulk operation  48 and 53 foot trailers versus 28 foot pup trailers  Over the road versus intermodal  Speed  Reliability and less variance  All points coverage vs use of cartage agents to serve remote points

Sample LTL Shipment Burlington, NJ to Detroit, MI Regional Carrier – Direct Load Shipper Burlington, NJ Consignee Detroit, MI Origin NJ Terminal Destination MI Terminal

Sample LTL Shipment Burlington, NJ to Detroit, MI Shipper Burlington, NJ Consignee Detroit, MI Long Haul Carrier – Break Bulk Origin Break Bulk Harrisburg, PA Origin NJ Terminal Destination MI Terminal

Sample LTL Shipment Riverside, CA Shipper Burlington, NJ Consignee Riverside, CA Long Haul Carrier – Double Break Bulk Origin Break Bulk Harrisburg, PA Destination Break Bulk Chino, CA Origin NJ Terminal Destination CA Terminal

Government Transportation Forum April 23, 2014 Regional LTL Strengths  Fewer claims  More reliable – less variance in transit days  Faster  Lower overhead, can be less expensive  Specialists with a lot of expertise in their core service areas.  Direct coverage  More flexible  Focus on specific industries – e.g. chemicals, retail  Privately held – focus on long-term success

Government Transportation Forum April 23, 2014 Regional LTL Weaknesses  More information required upfront for planning purposes.  Niche player vs a generalist – stay away from foodstuffs, appointment retail, or chemicals  Lack of nationwide coverage – not a one stop shop  Fewer ancillary services – TL, Supply Chain  Some regional LTL providers are information and technology challenged

Government Transportation Forum April 23, 2014 Regional LTL Opportunities  Expansion of LTL Coverage Area. Legacy long haul carriers have not cracked the code to transition into regional next day carriers however regional carriers have succeeded in growing into multiregional carriers.  Consolidation (Vitran sold off in pieces)  Leverage the LTL brand to develop ancillary revenue streams  TRNet Solutions – layer long haul service over regional service thereby gaining expanded coverage area without incurring significant investment expense.

Government Transportation Forum April 23, 2014 Regional LTL Threats  Continued industry consolidation in the aftermath of industry downturns.  Bundling of services by larger competitors  Failure to keep pace with information technology developments and requirements.  Re-capitalization requirements.  Globalization of trade – how many regional specialists are needed?

Government Transportation Forum April 23, 2014 Emerging LTL Industry Trends  National carriers have purchased regional carriers (e.g. YRC & FDX)  Poorly capitalized and technology challenged LTL carriers will be acquired or close. (e.g. Milan, Midstates, & Vitran)  Asset light solutions are emerging (e.g. Roadrunner, Daylight Transport)  Regional LTL carriers are developing seamless and reliable long haul services (TRNET)

Government Transportation Forum April 23, 2014 TRNET - The Reliance Network

Government Transportation Forum April 23, 2014 Map of TRNET

Government Transportation Forum April 23, 2014 Thank You!