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Outlook for the Domestic Transport

and Logistics Market in 2H14 and Beyond

July 2014

@CarrierDirect

CarrierDirect

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Legal Disclaimer

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CarrierDirect and its affiliates are in the business of providing, among other things, consulting and marketing services to carriers

and third-party logistics companies. In their role they are entrusted with information, some of which may be confidential and

proprietary, regarding market strategies and operations, technology and route-to-market tactics. All information provided herein

is based upon public information shared in publicly disclosed documents, industry events and company-sponsored

presentations. CarrierDirect may be currently, may have in the past or may in the future provide services to certain of the

companies referenced in this presentation.

For more information, contact us at www.carrierdirect.co.

What We’re About At CarrierDirect

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Bringing fresh perspectives to the

transportation and logistics industry.

The 2014 Freight Market Outlook

4

What The Industry Looks Like Halfway Through 2014

Key Trends On The Horizon For 2H14 and Beyond

Strategic Priorities Leadership Should Have On Their Agendas

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How The Industry Looks From A Few Different Angles

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Truckload Asset-LightLess-than-

Truckload

Third-Party

Logistics

US

Economy

Q1 Was A Frozen Nightmare, But Prospects Of Life For The Rest of The Year

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Seasonally Adjusted US GDP from Q2 2010 – 2014

Source: Bureau of Economic Analysis, 6/25/14 Q1 14 Revised Estimate

ATA Monthly Truck Tonnage Index (2007 – Present)

% C

han

ge

in R

eal G

DP

(S

easo

nal

ly A

dju

sted

)

3.9

2.8 2.8

-1.3

3.2

1.4

4.9

3.7

1.2

2.8

0.1

1.1

2.5

4.1

2.6

-2.9

3.5

2.73

-4

-3

-2

-1

0

1

2

3

4

5

6

Q2

- 20

10

Q3

- 20

10

Q4

- 20

10

Q1

- 20

11

Q2

- 20

11

Q3

- 20

11

Q4

- 20

11

Q1

- 20

12

Q2

- 20

12

Q3

- 20

12

Q4

- 20

12

Q1

- 20

13

Q2

- 20

13

Q3

- 20

13

Q4

- 20

13

Q1

- 20

14

Q2

- 20

14 (

Est

)

Q3

- 20

14 (

Est

)

Q4

- 20

14 (

Est

)

The aftermath of one of

the most brutal winters

in recent memory

Moderate estimates for

remainder of 2014

TLAsset-

LightLTL 3PLEconomy

95

100

105

110

115

120

125

130

135

Source: American Trucking Associations, Transport Topics

2007 2008 2009 2010 2011 2012 2013 2014

Tru

ck T

on

nag

e In

dex

(20

00 =

100

)

Continued strong freight levels

keeping trucking companies busy

2009 starting to

seem like just

a bad dream

Freight Stocks Continued To Be A Mixed Bag Of Investment Quality

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Source: Yahoo Finance

ODFL (LTL)

ABFS (LTL)

SAIA (LTL)

HTLD (TL)

SWFT (TL)

ECHO (3PL)

XPO (3PL)

RRTS (AL)

YRCW (LTL)

CHRW (3PL)

CGI (TL)

WERN (TL)

S&P

0

50

100

150

200

250

Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14

Sto

ck In

dex

(7/

1/20

13 =

100

)

TLAsset-

LightLTL 3PLEconomy

Key Themes On Everyone’s Minds In The Truckload Market

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TLAsset-

LightLTL 3PLEconomy

Driver recruitment and retention is still the biggest issue, as thousands of seats go unfilled due to

prospective drivers being kept out of the industry by new government regulation, increased company

scrutiny and the allure of comparable “blue collar” jobs with better lifestyles

1

High levels of uncertainty around how FMCSA changes will affect the “day-to-day” of trucking operations,

leaving many small trucking companies worried if they’ll still be able to compete as more regulation rolls out2

Trucking companies (and LTL guys, too) making decision to allocate assets to dedicated lanes as

they’re able to grab more revenue per mile from long-term commitments with customers3

A lot of opportunity to convert loads to intermodal, but not able to do as much as there should be

due to rail line congestion, not having enough equipment and allocating assets towards bulk markets4

It’s So Glamorous, Why Don’t More People Want To Drive Trucks?

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TLAsset-

LightLTL 3PLEconomy

Sleeping in their cab at

night, often having to go

for days without showering

Driving for hours in a cramped cab,

many get a dog for companionship

Truck stops are a source

for fuel, showering and

relaxing after long hauls

And a spot to meet with other people

who live on the road (where they talk

about which Brokers or Shippers

they like or hate to work with)

State Of the Driver: By The Numbers

Source: Bureau of Labor Statistics, YRCW, The National

Transportation Institute, Transport Topics, HealtheSignals

*Note: For Heavy and Tractor-Trailer Drivers in the US

Number of Drivers* +1.7M

Drivers That Are Male 94.6%

Average Pay (Dry Van) $48K

Over The Age of 45 56%

Suffers From Pre-Hyper 87%

Tension or Hypertension

Obese / Morbidly Obese 75%

Driver Life Expectancy Early 60’s

Drivers Needed Over 96,178

Next 10 Years

With Huge Fragmentation, Widespread Changes In TL Takes Years To Realize

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Carrier

2013

Revenue*

Share

of Market

$3,052M

$2,320M

$1,642M

1,622M

$1,606M

0.99%

0.75%

0.53%

0.53%

0.52%

Source: Journal of Commerce, Company 10K Reports, Internal Estimates

Change

from 2012

+1.5%

+1.3%

(2.46%)

+3.8%

(4.4%)

Carrier

2013

Revenue*

Share

of Market

$1,480M

$1,478M

$1,152M

$1,071M

$1,008M

0.48%

0.48%

0.37%

0.35%

0.33%

Change

from 2012

(9.2%)

7.7%

7.6%

0.8%

0.9%

$291,186M 94.67%Every Other TL Carrier

*Includes non-Truckload revenue in figures (approximate total)

TLAsset-

LightLTL 3PLEconomy

Linehaul Rates In the Truckload Market Continue On A Steady Incline

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TLAsset-

LightLTL 3PLEconomy

Nationwide Broker Spot Linehaul TL Rates (July 2013 – July 2014)

Source: DAT, DW

Nationwide Shipper Contract Linehaul TL Rates (June 2013 – June 2014)

Source: DAT, DW

Van FB Reefer Intermodal

$0.65

$0.85

$1.05

$1.25

$1.45

$1.65

$1.85

$2.05

$2.25

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

2013 2014

$0.65

$0.85

$1.05

$1.25

$1.45

$1.65

$1.85

$2.05

$2.25

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Van FB Reefer

2013 2014

Steady increases in rates as

capacity continues to be tight

Truckers continuing to go back to

shippers / 3PLs multiple times per

year to renegotiate rate agreements

LTL Carriers Feeling Good With More Freight In Networks and Pricing Power

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TLAsset-

LightLTL 3PLEconomy

The new challenge: how to deal with the problem of having too much freight in their networks and the

right way to “purge” the bad freight strategically that won’t backfire when freight levels ease1

LTL carriers being affected by the good and bad spillover from the truckload market: huge challenge in

finding Linehaul drivers (P&D not so much a problem), but also getting the potential benefit from the freight

spillage that moves from truckload to LTL (but again, see trend #1)

2

Tech is the next big initiative for LTL carriers who see the writing on the wall that the better they know

their network the better they’ll be able to generate profit (if management makes the right decisions with it)3

New Leaders In Market And Consolidation May Pave Way For Change in LTL

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Carrier

2013

Revenue*

Share

of Market

$5,095M

$3,466M

$3,127M

2,502M

$2,126M

14.47%

9.85%

8.88%

7.11%

6.04%

Source: Journal of Commerce, Company 10K Reports, Internal Estimates

Change

from 2012

+1.7%

+2.2%

(1.9%)

+5.2%

+9.5%

Carrier

2013

Revenue*

Share

of Market

$1,835M

$1,730M

$1,721M

$1,298M

$1,139M

5.21%

4.91%

4.89%

3.69%

3.24%

Change

from 2012

+4.8%

+5.4%

+3.1%

+3.8%

+3.7%

$11,161M 31.71%Every Other LTL Carrier

*Includes ancillary business unit revenue in some cases

TLAsset-

LightLTL 3PLEconomy

LTL Carriers Getting Good Freight From Third-Party Logistics Companies

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Source: CD LTL Benchmarking For 3PLs – 2014

Inbound % of Total

TX 15.36%

CA 14.49%

FL 4.89%

IL 4.73%

OH 4.20%

IN 3.39%

PA 3.37%

NY 3.30%

MI 3.12%

AZ 3.06%

6.2%

14.3%

23.8%

4.0%

16.9%

6.8% 7.2%5.7%

4.0%

0.8%3.3% 3.3%

0.0% 0.3% 0.4%2.4%

0.5% 0.1% 0.0%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

CL50

CL55

CL60

CL65

CL70

CL77.5

CL85

CL92.5

CL100

CL110

CL125

CL150

CL160

CL175

CL200

CL250

CL300

CL400

CL500

37.95%

20.38%17.13% 16.47%

8.07%

0.00%

10.00%

20.00%

30.00%

40.00%

0 - 499lbs.

500 - 999lbs.

1,000 -1,999 lbs.

2,000 -4,999 lbs.

5,000 -9,999 lbs.

41.43%

22.92%

14.72%

8.94%

11.99%

< 500 Miles 501 - 1,000 Miles

1,001 - 1,500 Miles 1,501 Miles - 2,000 Miles

+2,001 Miles

TLAsset-

LightLTL 3PLEconomy

Outbound % of Total

CA 19.91%

TX 12.54%

IL 6.44%

MI 5.01%

OH 4.79%

NJ 4.58%

IN 3.89%

PA 3.64%

GA 3.59%

TN 3.19%

Top 10 OB / IB States

% of Total Weight By Weight Break

33.4%

22.8%20.1%

16.3%

4.5%1.6% 1.3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Revenue To Carrier (Includes FSC) Length of Haul

Average

$209.26

Average

944 mi.

Average

1,529 lbs.

Median

CL 70

Class Allocation of 3PL Freight

(Actual Class – No FAKs)

Shipments to LTL Carriers From 3PLs (<10K lbs., Actual Class, 60 Days)

Asset-Light Continues To Be A Market Many Want To Get Into

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TLAsset-

LightLTL 3PLEconomy

More asset-light carriers entering the market each quarter, bringing a new level of competition to the

marketplace for carriers that rely on contractual partnerships / interline agreements to haul freight1

The asset-light carriers who disregard service and play on price alone are being abandoned by shippers

and brokerages as frustration grows from unreliable transit times and congestion because of opting for

slower intermodal linehaul (e.g. not using expedited rail options or OTR)

2

Established asset-light carriers (e.g. RRTS) putting their efforts into diversifying their solutions and

branching into full-fledged logistics solutions vs. standard consolidation networks3

Roadrunner Remains An Interesting Case Study In Asset-Light Evolution

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TLAsset-

LightLTL 3PLEconomy

Brands Under the RRTS Umbrella as of July 2014

Source: RRTS 2013 Annual Report, www.rrts.com

Company Snapshot As of FY13 End

Total Revenue: $1.36B

− Truckload: $658M

− LTL: $559M

− TMS: $154M

EBITDA: $101.7M

Net Income: $49M

Employees: 2,756

LTL Delivery Agents: 200

LTL Service Centers: 45

Truckload Fleet: 3,500

TL Terminals: 27

Linehaul Cost per Mile (No FSC): $1.24

Brokerage Agents: 96

3PLs Entrench Themselves Deeper In Industry, Get Bigger and Better

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TLAsset-

LightLTL 3PLEconomy

M&A has continued in the logistics space as small, mid-sized and large logistics companies are

gobbled up by market-share-hungry 3PLs looking to scale quickly by organic / inorganic means1

Interesting mix of events where “strategic” 3PLs work to become more like brokerages and

“transactional” 3PLs look to tackle more complex supply chain problems for shippers2

The brokerage market is getting much more difficult to get into (not because of the bond increase), but

because of Truckload and LTL carriers reducing the number of 3PLs they do business with3

M&A Continues At A Rapid Pace In The Logistics Sector

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Source: Company Filings, Internal CD Analysis, CapIQ

Date Target

Announced Buyer Transaction Notes

5/13/2014 One Stop Logistics Echo Global Logistics acquires One Stop Logistics, a leading LTL brokerage based in California for

Echo Global $37.3 million, representing an 8.7x EBITDA multiple

3/31/2014 Access America Transport Coyote and Access America complete their merger for a combined revenue of $2+ billion, helping to

Coyote Logistics diversify Coyote's service offerings and strengthen its presence in the LTL arena

3/14/2014 Unitrans International Corporation Roadrunner acquires Unitrans International, a leading provider of international logistics, for $55 million;

Roadrunner Transportation Unitrans generated a TTM total revenue of $84 million at the time of acquisition

2/26/2014 Comcar Logistics Echo Global Logistics acquires Comcar Logistics, a non-asset based truckload brokerage based in

Echo Global Jacksonville, FL; Comcar has approximately $15 million in TTM revenue at the time of acquisition

2/24/2014 Rich Logistics / Everett Transportation Roadrunner acquires Rich Logistics and Everett Transportation for a total transaction value of $48 million

Roadrunner Transportation to strengthen Roadrunner's truckload capacity to/from Mexico; TTM revenue from Rich was $113 million

1/6/2014 Pacer International Pacer, the 3rd largest intermodal provider in America, agrees to be acquired by XPO for an Enterprise

XPO Logistics Value of $296 million; Pacer generated a TTM total revenue of $1.0 billion at the time of announcement

12/10/2013 Landstar SCS XPO Logistics purchased Landstar's Supply Chain Solutions group for $87M at a 7.5X EBITDA multiple

XPO Logistics

7/12/2013 3PD XPO Logistics purchased 3PD, a last mile delivery 3PL for $365 million

XPO Logistics

3/19/2013 Open Mile Echo Global acquired Open Mile, an East Coast TL brokerage for $2M

Echo Global Logistics

Echo and Coyote acquisitions increase the

already well-established dominance of

Chicago’s brokerage market

As XPO integrates its numerous

acquisitions the industry holds

its breath to see what’s next

TLAsset-

LightLTL 3PLEconomy

The Top Brokerages Continue to Get Bigger And Offer More Services

19

Single-Mode Multi-Mode Complex Multi-Mode

$250M

$1B

$500M

$10B

Gro

ss R

even

ue

(As

Rep

ort

ed a

s R

un

-Rat

e E

stim

ates

)

$750M

Solutions Brokerage Can Competitively Offer CustomersSource: Transport Topics, CD Estimates

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TLAsset-

LightLTL 3PLEconomy

Private Companies Continue to Play Big Roles In The Brokerage Space

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Modes They’re

Growing Into

Sales

How They’re

Changing the

3PL Market

Parcel (1 of 2 authorized

UPS domestic resellers)

Less-than-Truckload

Dry Van / Flatbed

International Air / Ocean

Franchises

Proprietary TMS

Fastest growth trajectory

of any 3PL in the LTL

reselling space

Expansive, well-trained

franchise network

Unique service portfolio

Dry Van Truckload

Reefer Truckload

Intermodal

Heavy Haul / Flatbed

Less-than-Truckload

W2 Employees

Proprietary TMS

Service-oriented

commitment to customer

is “raising the bar”

Truckload tech years

beyond their competition

Perfection of the

“buy / sell” model

Less-than-Truckload

Dry Van / Flatbed

Intermodal

W2 Employees

Proprietary TMS

“Systematized” the LTL

process better than any

other 3PL; will do the

same for Truckload

Largely quiet outside of

TL, with enormous goals

for growth in the mode

“Claim to Fame”

Brokerage Modes

Technology

TLAsset-

LightLTL 3PLEconomy

Brokerages Continue To Favor W2 / Franchises Over Sales Agent Programs

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TLAsset-

LightLTL 3PLEconomy

Brokerage

Sales Channels

To Reach

Market

W2 Employees

Dedicated sales force calling on

small / mid-sized customers over

the phone and visiting larger

customers in person

Franchises

Businesses with exclusive,

legally bindings agreements to

sell the company’s logistics

services

Sales Agents

1099 group with non-exclusive

or (less frequently) exclusive

sales agreements with

Brokerage to resell their services

Sales Channel

Inside Sales

- Base Salary or Draw

- Share of Gross Profit

Outside Sales

- Base Salary or Draw

- Share of Gross Profit

Franchise pays royalty to

Franchisor each month

Fees for any operational

support from Corporate

Share of Gross Profit for

each transaction

Penalties or fees for support

expenses from Corporate or

for bad debt expense on

Agent’s Gross Revenue

Compensation Structure

+ Ultimate control over sales,

pricing programs and handling

channel conflict with carriers

+ Early investment pays off with

higher returns per employee

+ Franchise responsible for

operations and cash collection

+ Cash infusion from each new

franchise in the system

+ Good economic structure for

Franchisor and Franchisee

- Brands have “worn out” model

(i.e. difficult recruitment)

- Difficult to direct agents

towards strategic goals and

resolve channel conflict with

carriers

Highlights Of Channel

Most

Favored

Most

Favored

Least

Favored

The 2014 Freight Market Outlook

22

What The Industry Looks Like Halfway Through 2014

Key Trends On The Horizon For 2H14 and Beyond

Strategic Priorities Leadership Should Have On Their Agendas

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Even Bigger and Better Collaboration Between Shippers / 3PLs / Carriers

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Strategic Value Curve for 3PL / Carrier Partnerships

Source: BG, Menlo Worldwide Logistics

What’s Ahead In Carrier / 3PL Collaboration

The 3PLs who treated carriers poorly when the

pendulum was in their favor are now getting

crushed as it swung back towards carriers

Best-in-class 3PLs understand that carrier

services aren’t a commodity and are finding

ways to improve collaboration, such as:

− Gain share programs on new opportunities

− “Open book” agreements with target

profitability for carrier and 3PLs

− Tackling shipper opportunities with

combined sales and technology efforts

The 3PLs who don’t adopt this kind of

partnership will fail in the next 3-5 years

*Take the 23rd Annual Trends and Issues survey to share your

perspectives on the industry

With the pendulum swinging back in favor of carriers, there will need to be more strategic conversations

and collaboration between 3PLs and carriers to make the relationship work for all parties

Technology Will (Eventually) Come To Truckload and LTL Carriers

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Technology In Transportation

Outdated systems that are more

“reactive” than “proactive”

Poor costing, pricing and tracking

technology

Outdated, unintuitive user

interfaces that requires too many

“super users” to navigate

A lot of data being captured, but

lacking analytical tools to use to

make proper mgmt decisions

Today

Truckload Technology

Smart pricing and costing models

that can aid in making smarter

management decisions on how

and where to position assets

More smartphone-enabled

technology to provide for dynamic,

real-time load information sharing

*Driverless trucks in +15 years, but some

degree of computer-aided trucking sooner

LTL

Stronger data capturing ability

(e.g. dimensioners) and costing

models to price services more

accurately

Improved route-optimization and

tracking software to improve P&D

density

Dynamic pricing of services based

on network and market conditions

(more on this to come)

What’s Ahead

The carriers who don’t invest in these technologies will be pushed all the “bad freight” that they

aren’t able to properly price and make the right management decisions on how to handle in their networks

The carriers who invest in technology are going to be leagues ahead of those who are slow to adapt to

available, cheap technologies which would allow them to provide better services to their customers

“Pushed” Into 3PLs and Shipper Systems

We’re Standing On The Edge Of Big Pricing Changes For LTL Sector

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Web Services

Connections

Dimensional

Pricing

Dynamic

Pricing

Real-Time

Information

Gathering

Pay for space taken up in trailer

vs. confusing class-based system

FedEx/UPS goes first, then the industry

Pricing based on needs of carrier’s network

Ability to set future discounts to guide freight

shipments to days that are typically light

Driver / sales rep pricing using

handheld “dimensioners”

LH planning before freight hits dock

Output From Carriers’ Operating System

Getting Paid For What’s

Moved vs. Hoping For Best

Ability to Standardize / Tier

Pricing For Different 3PLs

Immediate Change Of Freight

Mix vs. Long Tariff Changes

Source: CD Internal Perspective

It’s been talked about since de-regulation, but we are truly on the cusp of some pretty significant changes

in the LTL industry that will let carriers better manage their businesses and run more efficient networks

Carriers Will Start Using 3PLs As An Extension Of Their Sales Channel

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A smaller handful of 3PLs will start to be considered a legitimate extension of the carrier’s sales force (and

not thought of as a competitor) that can be used to extend the reach of the carrier without the sales costs

Carrier

Head of Sales

National Account ManagersRegional Key Account ManagersValue-Added Resellers

Carrier 3PL

Whose Employee

A small sub-set of 3PLs that meet

the carrier’s rules of engagement

Tiered pricing that is well thought

out by the carrier to meet goals

Offer business to carriers that is

“scaled” and meets needs of

carrier’s network

Deployed in local markets across

different regions in carrier’s

footprint

Tasked with directives to build out

local sales presence targeting

specific kinds of accounts

(of a size or growth potential)

Located at carrier’s headquarters

Works closely with pricing and

operations teams to build account

and implement new initiatives

Focus on large accounts that

span multiple-regions with

centralized decision-making

The Biggest Carriers May Become The Biggest 3PLs

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Asset Non-Asset

Company trucks

Consolidation /

Service Centers

Ability To Move

Quickly As Needed

Manage KPIs Closely

Sub-Contracted or

Brokered Assets

Outsource To Others

Are Experts / Do For

Less Money

More Services To

Offer Shippers

Requires next-generation technology and extremely

progressive thinking / leadership to make the model work properly

Blending the Best of Asset-Based And Non-Asset ModelsWhat Carriers Must Do To Become 3PLs

Large, asset-based have barely tapped into

the potential of offering true logistics services

Growth has come from having established

brands with shipper, not any remarkable

logistics services (for the most part)

The next wave of growth from carriers offering

3PL services will be from adopting practices

and ideas that have made some 3PLs so

successful (technology, brokerage tactics,

thinking of the whole vs. the trucks)

Breaking through to the next level of logistics

services is going to require extremely

progressive thinking and leadership

A handful of carriers have made good progress in building out logistics divisions, but their growth has

largely been due to being established brands; getting to the next level is going to take a new game plan

New Entrants To The Industry Are Coming Who Want To Solve Sexy Problems

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Companies Bridging the Physical / Digital World Divide

“Uber of Freight”

The Web Services Hub For Freight

What These Outsiders Are Doing And Why

Enticed by the unique and big problems that are

pervasive across the freight industry

Successful entrants partner with people that

have been in the industry for a long time

(see Cargomatic with Kessler + Parker)

Preferring to focus on technology solutions that

bridge asset-based world with digital world vs.

doing a “typical” brokerage play

When they do go into brokerage, they are doing

some pretty amazing things (see Coyote’s MIT

squad or Echo’s team of tech rockstars)

Few tech entrants are focusing on making

trucking companies more efficient (hint,

hint…tech people looking for a problem to solve)

Over-Dimensional

Freight Capacity

Advanced TL & IM Pricing

Freight Exchange

The freight industry is getting more attractive to outsiders, and they’re beginning to get their hands dirty

on applying new technologies being used in other industries to the challenges of transportation

Electronic Log Books / Fleet Management

Entrance of Exchanges Could Be Trouble for Low-Value Brokers

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Logistics companies who provide little value to shippers are at risk of being replaced by tech startups,

though those who establish relationships and provide value-added services are less likely to be affected

“Need an armoire moved on a

no-name carrier? No problem.”

“I don’t know anything

about this carrier, but

here’s your rate. Good

luck!”

“Based on your needs,

I recommend using CWF.

Good? Great. I’ll get this

done for you.”

“We’ll handle all

your freight from our

facilities. We’ll take care

of everything.”

…High Risk …Little Short-Term Risk …Very Little Risk

Legend

Future tech startups will take the form

of “marketplaces” or “exchanges” who

efficiently pair shippers with carriers

Companies who only provide rates to

shippers without a “hook” will be replaced

by these tech companies

3PLs who offer higher value services are

less likely to be affected

Some value-add services to protect a

3PL from obsolescence include:

− Multiple service options

(e.g. TL, LTL, International, Parcel)

− Warehousing services

− High-degree of carrier knowledge

and ability to meet a customer’s

needs on any given shipment

Value-Added

Transportation

Services

High-Value Logistics

Non-Commercial

Freight Moves

Transactional Rate

Reselling

The 2014 Freight Market Outlook

30

What The Industry Looks Like Halfway Through 2014

Key Trends On The Horizon For 2H14 and Beyond

Strategic Priorities Leadership Should Have On Their Agendas

All rights reserved by CarrierDirect, LLC, 2014

Strategic Initiatives That Should Be On Asset and Non-Asset Agendas

31All rights reserved by CarrierDirect, LLC, 2014

Non-AssetAsset-Based

Initiatives For Asset-Based Companies In the Years Ahead

32All rights reserved by CarrierDirect, LLC, 2014

Non-

Asset

Asset-

BasedNow that the pendulum has swung back to carriers, it’s important that they take this

opportunity to invest for what the future holds to prepare for inevitable market shifts

Get Your Logistics

Division To The Next Level

Keep Investing In Technology

(Build For The Future)

Align With The Right Customers

And Build Collaboration Roadmaps

1 2 3

If you’ve launched a logistics division

that’s had some success, know that

it’s just the beginning

Getting to the next level to compete

with incumbents is going to take an

entirely new level of thinking and

talent to catch up to where industry

leaders are today

Always remember to think about the

big picture of your company vs. asset

utilization metrics

On the trucking and logistics

segments, continuously invest into

your technology to make it smarter,

faster and stronger

Create technology that is ready for the

web-enabled world and can share

information and service information in

a dynamic environment

Look to what’s come before you: learn

from e-commerce giants and the

technology needed to operate in high

shipment laden businesses

Take the opportunity to purge “bad

freight” from your system and push to

others who aren’t as sophisticated

Align with your customers on what

works well for your network, where

you can meet them halfway and what

is non-negotiable

Build collaboration roadmaps on how

your partnership can work well for

both companies (remember: you

never get anything you don’t ask for)

How Non-Asset Companies Can Better Compete In This Environment

33All rights reserved by CarrierDirect, LLC, 2014

Non-Asset companies should be dedicated to build advanced technology platforms,

creating high-value services and finding ways to maximize yield on customer business

Build For A

Multi-Modal Future

Focus On Your Core

Carrier Relationships

Become Better

Buyers of Freight

1

2

3

Develop core competencies to be able to do well in environments that require

spot market savviness or dedicated/contract pricing relationships

Create a S.W.A.T. team of people (and technology) that knows pricing and are

able to develop deep relationships with carriers across various modes

Be brutally understanding of what you can offer carriers, what you can’t and

how it compares to others in the marketplace

Develop deep relationships with core carriers where there is mutual trust

Take “scaled” business to carriers vs. making promises of things to come

Realize that being exceptional at one mode is great, but know that your

competitors are building the ability to function exceptionally well by offering

true multi-modal solutions

Begin laying the groundwork early to build teams of people and technology

that will enable for multi-modal sales and operations

Points To Focus On

Non-

Asset

Asset-

Based

CarrierDirect

All rights reserved by CarrierDirect, LLC, 2014 34

CarrierDirect, LLC

105 West Adams, Suite 3010

Chicago, IL 60603

@CarrierDirect

CarrierDirect

Listen to Stifel Call

www.carrierdirect.co

Joel Clum

President

(312) 725-6712

joel@carrierdirect.co

JoelClum