Randy Mullett Vice President - Government Relations & Public Affairs, Con-way Inc. FHWA Talking Freight Webinar February 16, 2011 Riding the U.S. and Global Economic Rebound - Opportunities and Challenges

Con-way Today – who we are 2 $5.0 Billion Industry Leader in Freight Transportation and Logistics Con-way Freight Con-way Truckload Menlo Worldwide Logistics 30,000 employees worldwide Over 500 operating locations 11,500 trucks, 35,000 trailers, 20 million sq ft warehouse space globally 150,000 customer pickups and deliveries daily in N. America Nearly one billion miles annually moving freight on USA highways Consume 150 million gallons of diesel fuel annually

Trucking / Intermodal Statistics Over 500,000 trucking companies in the US 97% have fewer than 20 trucks Pay 40% of HTF total and drive 13% of the miles 70% of all goods (by weight) in the US move by truck 83% by value 97% of all consumer goods Future modal shares are expected to stay fairly constant Over 80% of US communities are served only by truck Shipments traveling >500 miles only 13.4% of the truck freight market If rail intermodal capacity doubled by 2020, market share will be only 1.8% vs. today’s 1.5% if capacity stayed constant

A Framework to Remember We can not separate economic growth from the growth of transport resources and infrastructure.

Motor Carrier Trends Demand

Source: ATA ATA’s For-Hire Tonnage Index Seasonally Adjusted; 2000 = 100 Through December 2010 In 2010 Truck Tonnage was up 5.7%

Source: ATA ATA’s For-Hire TL Loads Index Seasonally Adjusted; 2000 = 100 Through November 2010

Sources: Department of Commerce and ATA Total Business Inventories-to- Sales Ratio (Includes retail, wholesale, and manufacturing; Through November 2010)

Source: ATA’s Trucking Activity Report Loads Jan - Nov 2010 Compared with Same Period in 2009

Motor Carrier Trends Supply

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

Source: Wards U.S. Class 8 Truck Sales Monthly Retail Sales; Through December 2010 Annual Figures 2005:253k 2006:284k 2007:151k 2008:133k 2009: 95k 2010:106k

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

Long-Run Freight Transportation Outlook

Growth in Tonnage Total Increase from 2009 to 2021 Waterborne Rail Carload Trucking Rail Intermodal Air Pipeline Source: U.S. Freight Transportation Forecast to 2021

Distribution of Tonnage by Mode: 2009 vs 2021 Source: U.S. Freight Transportation Forecast to

Source: IHS Global Insight Crude Oil Prices WTI, US$ per Barrel

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

Why does it matter? Freight in all modes will increase (26% by 2020) with resulting capacity constraints Energy and sustainability concerns will increase. Rates will increase. Delays will occur. Economy will be affected. Supply chain disruptions will result in “near sourcing” Feds, States, and Communities will rediscover that freight and freight infrastructure are the underpinnings of economic development.

Challenges CSA Hours of Service Rules Fuel / Energy / Sustainability International Competitiveness Livability Physical Capacity / Productivity

Railroad, Airline, Trucking, and Private Business Total Factor Productivity 1987–2008

Politics: Potential opportunity? Underlying issues that existed during our freight capacity “crisis” are unchanged Changes in Congress No Tax Increase Pledge No Earmarks Tea Party Influence State Responsibility

Remember ECONOMIC GROWTH cannot be separated from TRANSPORT GROWTH.