Transportation & Logistics Anthony P. Gallo, CFA(410) office, (410) mobile Michael R. Busche(704) office, (910) mobile Understanding CSA All estimates/forecasts are as of 12/03/2012 unless otherwise stated. Please see page 27 for rating definitions, important disclosures and required analyst certifications. Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision. December 2012

Wells Fargo Securities, LLC 1 Agenda  Understanding CSA  The State of the Trucking Industry  Q & A

December 2012 Wells Fargo Securities, LLC 2 “Good Intentions, Unclear Outcomes”  FMCSA mission is to reduce crashes, injuries and fatalities involving large trucks and buses  Identify unsafe motor carriers for intervention,  Identify safety performance within broad areas at carriers,  Monitor safety performance on a near-continuous basis  Compliance, Safety, Accountability (CSA) was developed in furtherance of this mission and to focus limited resources on the most problematic carriers  CSA assigns percentile rankings in seven “BASICs” (Behavior Analysis and Safety Improvement Categories)  Unsafe Driving, Fatigued Driving, Driver Fitness, Controlled Substances, Vehicle Maintenance, Cargo-Related and Crash Indicator  On May 16, 2012 FMCSA essentially placed due diligence responsibilities on brokers, shippers and insurers.

December 2012 Wells Fargo Securities, LLC 3 Our findings  No meaningful statistical relationship (using simple regression analysis) between unfavorable BASIC scores and actual accident incidence,  A Federal program executed at the State level with unexplainable differences in State enforcement and inspection protocols,  Severity weights that did not appear to accurately capture driving behaviors that lead to accidents,  Disproportionate inspection rate for small carriers,  Potential negative “feedback loop”,  Problematic crash reporting. Wells Fargo Securities; three studies, most recently across a universe of 4,600 carriers with at least 50 inspections.

December 2012 Wells Fargo Securities, LLC 4 What others have found  UMTRI: high correlation between BASIC scores and crash rates  Wells Fargo Securities: no meaningful statistical relationships, only modestly higher accident rates for above threshold carriers, various problems with the program  “University of Maryland, Gimpel study”: highlights problems with selection bias  Transplace, Iyoob: refutes several UMTRI findings  ATRI: strong safety relationship for Unsafe Driving, Fatigued Driving, and Vehicle Maintenance, no positive relationship between Driver Fitness and Controlled Substance,/Alcohol BASIC.  No study has introduced control variables, such as time of day, traffic density or other factors that influence crashes and safety

December 2012 Wells Fargo Securities, LLC 5 We think the scope of CSA is limited

December 2012 Wells Fargo Securities, LLC 6 Accidents versus BASIC categories

December 2012 Wells Fargo Securities, LLC 7 Snapshot of publicly traded trucking company CSA BASICs

December 2012 Wells Fargo Securities, LLC 8 Snapshot of publicly traded trucking company CSA BASICs

December 2012 Wells Fargo Securities, LLC 9 A simple regression analysis showed very low correlations

December 2012 Wells Fargo Securities, LLC 10 Above Threshold carriers in certain BASICs did have higher accident rates

December 2012 Wells Fargo Securities, LLC 11 Inconsistent enforcement among states and jurisdictions Source: Vigillo, LLC and Wells Fargo Securities, LLC

December 2012 Wells Fargo Securities, LLC 12 Fatigued Driving severity weights and violation description

December 2012 Wells Fargo Securities, LLC 13 The strongest relationship we observed was inspections to scores

December 2012 Wells Fargo Securities, LLC 14 Small carriers appear to have disproportionate inspection rates

December 2012 Wells Fargo Securities, LLC 15 Industry wide inspection statistics

December 2012 Wells Fargo Securities, LLC Potential negative feedback loop 2/3rds of inspections result in some violation Higher BASIC scores prompt inspections and enforcement actions Violations are carried for 24 months Newer violations carry more weight Higher BASIC scores prompt inspections and enforcement actions Small carriers have higher inspection rates 16

December 2012 Wells Fargo Securities, LLC 17 Lack of “responsibility” assigned to accidents is problematic in our view

December 2012 Wells Fargo Securities, LLC 18 FMCSA commentary demonstrates program limitations

December 2012 Wells Fargo Securities, LLC 19 Might shippers, brokers and insurers be confused?  FMCSA properly uses BASICs for safety interventions and prioritization, but makes BASIC scores available to the public,  All motor carriers are lumped together despite vast differences in operations (LTL, long-haul TL, dedicated fleets, parcel, etc.)  FMCSA explains that “BASIC assessments are not safety ratings”  …but “believes [BASICs] provide users…informed, current and comprehensive picture of a motor carrier’s safety and compliance…”  Only 19% of active carriers have at least one BASIC score  Nearly 58% of active carriers have insufficient data to have a BASIC score  54% of carriers with a BASIC score have had fewer than 20 inspections  Nearly 57% of crashes are from carriers with NO scores above threshold

December 2012 Wells Fargo Securities, LLC 20 Agenda  Understanding CSA  The State of the Trucking Industry  Q & A

December 2012 Wells Fargo Securities, LLC 21 A very fragmented industry

December 2012 Wells Fargo Securities, LLC 22 Driver turnover remains an industry headwind

December 2012 Wells Fargo Securities, LLC 23 Industry fleet age is at all time highs…

December 2012 Wells Fargo Securities, LLC 24 Maintainence expense accelerates after ~5 years

December 2012 Wells Fargo Securities, LLC 25 Equipment prices have grown consistently over the past 5 years

December 2012 Wells Fargo Securities, LLC 26 Agenda  Understanding CSA  The State of the Trucking Industry  Q & A

December 2012 Wells Fargo Securities, LLC 27 Disclosures

December 2012 Wells Fargo Securities, LLC 28 Disclosures