The Transport & Logistics Week in Review

Transcription

1 AIRFREIGHT & SURFACE TRANSPORTATION Airfreight & Logistics Market Weight Railroads Market Overweight Trucking Market Weight FRIDAY FREIGHT The Transport & Logistics Week in Review Welcome to our Friday Freight report. We distribute this product each Friday mid-day, so clients have some freight reading material to make their weekends truly worthwhile! We always appreciate your feedback if you have any suggestions. Have a great weekend! This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. Included are (1) key takeaways, selected shipper comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel. SOUND BITES FROM WHAT WE RE HEARING Railroads (Market Overweight): We spoke with a large U.S. grain shipper about recent volume and pricing trends. Our contact has felt the effects of lower grain prices in recent weeks which have caused farmers to hold onto inventory in hopes of better future pricing. Wheat pricing, for example, has dropped 25% in the past three months. Severe flooding in parts of the Midwest over the summer has also reduced the quality of the crop this year, while U.S. grain pricing is also feeling downward pressure from strong production in Russia, Canada and Australia. As a result, this shipper is moving less grain versus last year, although shipment levels have been steady compared to last month. Looking to 2012, our contact does not anticipate a material improvement in grain volumes until the middle of the year, but farmers will ultimately have to start moving more inventories. Despite the drop in commodity prices, our contact has not seen a similar decline in rail rates. This shipper moves almost all of its grain on tariffs with the rails and has experienced rail rate increases of around 2%-4% this year, similar with increases in past years. However, a few tariff increase announcements have not gone into effect recently as grain prices have plummeted, but this shipper has not yet seen any actual rate reductions. Our contact added that overall rail service levels are decent with UNP currently best. Lastly, our contact was obviously relieved that a rail strike was averted last week, and he is confident that the last rail labor union will settle before the extended cooling off period ends in February. [Among the public U.S. rails, UNP has the most exposure to weak grain volumes at 17% of revenue versus about 9% for CSX and NSC Wolfe Trahan comment]. Trucking (Market Weight): We spoke with a food & beverage shipper about recent capacity and pricing trends within Truck and Rail. Our contact s volumes are Company Name Canadian National Railway Co. (CNI) Canadian Pacific Railway Ltd. (CP) CSX Corporation (CSX) Heartland Express Inc. (HTLD) Kansas City Southern (KSU) Roadrunner Transportation Systems Inc. (RRTS) Union Pacific Corp. (UNP) UTi Worldwide Inc. (UTIW) YRC Worldwide Inc. (YRCW) OP=Outperform, PP=Peer Perform, UP=Underperform, NR=Not Rated Closing Rtg Price $77.06 UP $63.19 UP $21.04 OP $13.42 UP $65.71 PP $14.75 PP $ OP $13.15 PP $11.28 UP Edward M. Wolfe (646) EWolfe@WolfeTrahan.com Scott H. Group (646) SGroup@WolfeTrahan.com Reena Krishnan (646) RKrishnan@WolfeTrahan.com Ivan Yi (646) IYi@WolfeTrahan.com Carol A. Krakowski (646) CKrakowski@WolfeTrahan.com Charlie Legg (646) CLegg@WolfeTrahan.com DO NOT FORWARD DO NOT DISTRIBUTE DOCUMENT CAN ONLY BE PRINTED TWICE This report is limited solely for the use of clients of Wolfe Trahan & Co. Please refer to the DISCLOSURE SECTION located at the end of this report for Analyst Certifications and Other Disclosures. For Important Disclosures, please go to or write to us at Wolfe Trahan & Co., 420 Lexington Avenue, Suite 648, New York, NY WolfeTrahan.com Page 1 of 11

2 currently tracking flattish y/y which he expects to continue into next year. About 60% of this shipper s TL capacity is negotiated directly with carriers, while the remaining 40% is booked through truck brokers and this split is expected to remain fairly stable going forward. On the truck side, our contact has multi-year pricing contracts with large national carriers, including SWFT and Schneider, as well as local carriers, and he uses a combination of dry van and reefer. While TL capacity is tight, particularly in the Northeast, our contact is not having any real issues finding capacity today. However, he is considering increasing his Dedicated capacity next year as he is worried that pending regulatory changes could push more TL capacity out of the market. Our contact recently completed a bid and generally found carriers posturing for rate increases based on potential driver shortages rather than pending regulatory changes. Overall, our contact s TL rates increased 2%-3% on average, similar to last year. On the rail side, our contact uses all Class I rails, primarily for box car and very little intermodal. Our contact would prefer to use more intermodal, but it is not feasible for his business due to the shorter lengths of haul and lack of accessibility to rail ramps associated with his distribution network. Our contact is in the process of negotiating his rail contracts and expects to incur pricing increases of 2%-3% on average next year, similar with this year. Airfreight & Logistics (Market Weight): We spoke with a large international freight forwarder about recent airfreight volume and pricing trends. Our contact indicated that demand generally remains soft but appears stable. Asian exports to the U.S., particularly from Shanghai and Hong Kong, remain weakest, but exports from the U.S. to Asia remain fairly strong along with U.S. traffic to and from Europe. Our contact believes that weakness in Hong Kong (as evidenced by recent double digit monthly declines in HACTL volumes) is part cyclical and part secular as Chinese manufacturing bases continue to move west. As a result, Chengdu, the largest cargo terminal in mid-western China has seen a significant increase in flights and frequencies this year. Our contact added that overall airfreight capacity feels plentiful but not significantly oversupplied as carriers have cut capacity since the end of the summer. Still, airfreight pricing remains low by historical standards with significant discounts on back-haul lanes. To combat falling prices, our contact is seeing more airlines sell block space at fixed rates for 4-5 month terms to help put a short term floor on rates. Lastly, our contact has not seen any noticeable pick-up in demand or pricing that would signal an effort to restock depleted inventories following strong post-thanksgiving shopping. Looking ahead, this forwarder is optimistic that we could see low single digit volume growth next year, although he expects the first half of 2012 to remain sluggish. Railroads (Market Overweight): We spoke with an eastern U.S. coal producer about recent trends in coal supply and demand. This coal producer ships both met (25%) and steam (75%) coal, with almost all of its steam coal bound for domestic power plants and 75% of its met coal exported abroad. This is up somewhat from recent years when about two-thirds of met coal was exported. Our contact continues to see strong export met coal to date with the majority of exports destined for Europe, Brazil, and Japan this year, but the fastest growth to China and India. In contrast, our contact continues to see weak domestic thermal coal demand in the East due to a sluggish U.S. economy and high utility stockpiles. Since it has taken utilities about two years to work down high stockpile levels closer to historical ranges, he believes many utilities are increasingly inclined to keep inventories leaner going forward. In terms of rail pricing, this coal producer only pays the rails directly for export moves and has experienced stable rail rates recently with export met coal rates to the rails at around $50/ton and steam coal rates at around $40/ton. Rail rates are up materially this year, similar with underlying met coal commodity prices, and our contact believes rail rates will continue to move directionally with coal pricing. Lastly, this producer believes the Cross State Air Pollution Rule (CSAPR) will take effect at the start of 2012, but there still remains some chance it will be deferred. Ultimately, our contact does not believe CSAPR will have a material further impact and estimates it will reduce his overall coal volumes by less than 1M tons. WolfeTrahan.com Page 2 of 11

3 Auto & Truck Manufacturing (Market Weight, Tim Denoyer): We spoke with the president of a medium TL fleet about fleet and capex planning for This fleet is mostly composed of NAV tractors since beginning to switch purchases from Mack in Most of our contact's Internationals are EPA 2007 ProStars with 15L CMI ISX engines, which our contact prefers, but this year s deliveries have all been EPA 2010 ProStars with NAV s MaxxForce 13 engines. Although our contact is not thrilled about EGR as a longterm emissions solution or about NAV s move away from CMI, the new trucks with the MaxxForce engine are mostly for dedicated regional applications and have performed very well in terms of fuel economy, with only minor maintenance issues which were quickly resolved. In addition, our contact found NAV's warranty and residual value guarantee more attractive than the competition. This TL carrier plans to continue purchasing exclusively from NAV in 2012, although our contact's 2012 capex budget is unlikely to rise much as his purchases are still replacement only, with no near term growth plans. Longer-term, our contact is considering a switch to Freightliner in order to return to the CMI ISX, but believes NAV will find a more sustainable emissions solution. The largest parts problem this fleet has faced this year was downtime related to Eaton s AutoShift transmission, though Eaton has been responsive in addressing the problems and providing improved warranties for its product going forward. Our contact also replaced roughly 10% of its relatively large trailer fleet in 2011 and sees no capacity constraints with his trailer supplier, Stoughton, in the near term. Note: Each of the comments above represents the viewpoint of a single shipper or industry contact. They are not necessarily representative of the overall market and do not necessarily reflect the opinion of Wolfe Trahan unless specified. UPCOMING EVENTS: TRANSPORTATION INDUSTRY EVENTS OF NOTE Sign up for events and check out our new Research Library tab on our website at WolfeTrahan.com December 15, 2011: Ed Wolfe, Scott Group and Michael Kantrowitz will host a Wolfpack Roundtable Lunch in New York City. January 10, 2012: Scott Group will host meetings with Key Members of Rail Regulatory Groups in Washington, D.C. January 11-12, 2012: The Midwest Association of Rail Shippers will host its semi-annual meeting in Oak Brook, IL. February 7, 2012: Wolfe Trahan will host meetings with CHRW Senior Management at their headquarters in Eden Prairie, MN. February 8, 2012: Wolfe Trahan will host meetings with Meritor Senior Management at their headquarters in Troy, MI. February 8-9, 2012: Canadian National will host an Analyst Day in New Orleans. February 9-10, 2012: Wolfe Trahan will host meetings with Cummins Senior Management in Boston. May 22-23, 2012: Save the Date: Wolfe Trahan 5 th Annual Global Transportation Conference in New York City. WolfeTrahan.com Page 3 of 11

4 HIGHLIGHTS FROM OUR TRANSPORTATION RESEARCH THIS WEEK: On Track, Week 48 Ending December 3: Solid Rail Volume Growth, But Not as Strong as Last Week (12/08/11). Total Week 48 Rail vols increased 3.6% y/y, decelerated from +5.3% last week but better than +1.7% 2 weeks ago. Vols increased 14% sequentially following Thanksgiving the prior week, and vols are now tracking up 2.8% QTD, improved from +0.7% during 3Q and above our expectations for about 2% growth this qtr. Relative to our expectations, vols so far in 4Q are relatively best for UNP and KSU. Roadrunner Transportation: Initiating Coverage with Peer Perform Rating (12/07/11). Roadrunner is historically an asset-light LTL carrier, but it has quickly expanded into better margin and better return TL and Logistics businesses the past five years. Looking forward, we believe Roadrunner s unique model should continue to deliver solid long-term growth, both organically and through acquisitions. Improving LTL pricing also seems positive in the near term, although this will likely be offset in the fourth quarter by higher interest expense and transaction-related expenses from recent acquisitions. We also see risk to LTL pricing next year in a slower industrial economy, and our 2012 EPS estimate of $1.07 is currently about 7% below prior Consensus. Inside Freight: A Black Box Approach to Valuation for the Transports (12/06/11). We believe valuation should be based on a combination of an underlying company s risk, reward and returns. Our note today compares each of our transport companies relative to each other and the S&P 500 based on 6 historical and projected metrics including: Rev. and EPS growth (i.e. reward), free cash flow and return on capital (i.e. returns), and balance sheet leverage and earnings cyclicality (i.e. risk). RECENT CONFERENCE CALLS AND REPORTS: The Wolfe Monthly Macro Watch: More Mixed Signals from Freight Domestic Continues to Feel Better than International (11/21/11). This month s macro examines Sept. and Oct. data. Overall, trends remain mixed with 7 of 15 series this month improved y/y compared with the prior month, similar with the pace of improvement witnessed last month. Rail vols have improved y/y so far in 4Q relative to 3Q and the Ceridian Pulse of Commerce index (based on trucker fuel consumption) improved in Oct. for its best month in the past 4. However, the broad-based Cass shipment index slowed materially in Oct. and West Coast ocean port vols inflected back negative y/y in Oct. despite our channel checks which indicate signs of a late peak season. With some series improving and some decelerating, our view is that freight remains choppy but relatively stable overall with few signs of an impending material slowdown or recession. Ed Wolfe & Scott Group Conference Call: Introducing 2013 Forecasts, New Target Prices and Trends Out of 3Q Reports (11/14/11). Ed Wolfe & Scott Group hosted this conference call. Key topics included: What are the Key Operating Trends out of 3Q that will Impact 2012?; Freight Data Remains Mixed What Does it Mean?; Introducing 2013 Forecasts and Year End 2012 Target Prices; Annual Review of Our Thesis, Ratings and Sector Weightings; and Our Favorite Stocks for 2012? Ed Wolfe & Scott Group Conference Call: Repositioning EPS Forecasts and Ratings for Change in Market Conditions (9/6/11). Ed Wolfe and Scott Group hosted a conference call discussing the following key topics: What is the market telling us about freight demand and the Stocks?; What should investors do from here with the transports?; Recent survey results reflect further slowing in international air and ocean pricing and recent deceleration in TL, Rail, Intermodal & Small Package pricing; Updated look at valuation after earnings changes; Which transport sub-sectors are best positioned?; What secular forces in transports should help offset weaker economic demand?; and Why are we near term bullish on transports? WolfeTrahan.com Page 4 of 11

5 Ed Wolfe & Scott Group Conference Call: Freight Points to a Slowdown, But Not End of the World Here's a List of Transport Stocks to Navigate that Environment (8/8/11). Ed Wolfe and Scott Group hosted a conference call recapping current freight trends into early August and out of 2Q transport earnings reports. Freight and the overall economy are clearly slowing, but our companies and shippers mostly remain upbeat and comparisons generally get easier in the second half of the year. Pricing across domestic modes also remains strong, although international pricing trends continue to weaken. In this call, we update our thesis on the transport stocks in light of slowing volumes but the sharp pullback in the stocks as valuation seems compelling for the first time in over a year. We highlight our favorite stocks to own that can continue to grow earnings solidly, even in a low growth macro environment. TNTE Initiation: Lots of Potential Ways to Unlock Value (7/18/11). We are initiating coverage of TNT Express with an Outperform rating and 10 year-end 2012 target price based on our 2013 EPS estimate of TNT has struggled the past couple of years with weak pricing in Europe, integration issues in Brazil and management distractions during the demerger process. However, we believe earnings trends have finally bottomed and we favor longer term express industry fundamentals in Europe given the region s dense population that lends itself to high margin and return on capital ground operations. Valuation also appears attractive after the sharp underperformance of the stock since the demerger, and we now have only the second Outperform recommendation among 23 analysts. Changing Lanes: Pendulum Ready to Shift Back to Large TL Carriers (5/25/11). This 75-page report lays out our thesis that Truckload (TL) carriers are in the early innings of a multi-year pricing upswing that should increasingly favor large, well-capitalized carriers. Within the report, we analyze data gathered from our proprietary truck capacity survey and discuss how over the last several years small carriers held a financial advantage that allowed them to gain market share over large carriers. However, with increasing headwinds from tighter credit standards, higher fuel costs, and rising new truck prices, we expect further reductions in truck capacity, which along with impending regulatory changes, should allow the profitability pendulum to swing back to the favor of large carriers. Rail Regulatory Cheat Sheet (Updated 4/8/11). We expect an increasingly active Surface Transportation Board over the next few years. This 2-page rail regulatory cheat sheet is perfect for your bulletin board as a handy reference piece. We lay out 13 key regulatory issues important for the railroads and highlight winners and losers among the group from potential regulatory reform. We also discuss what authority the STB has to implement policy changes on its own without Congress, and list current rate cases pending before the Board. The First Days are the Hardest Days (3/18/11). This 248-page primer provides a comprehensive overview of the airline industry in a historical, current, and future context. We examine important structural changes that have occurred in the worldwide airline industry over the last five years, almost all of which were driven by two crises, both unprecedented in scope, that sent many airlines to the brink of insolvency: the spike in fuel prices in 2008, and the ubiquitous revenue collapse in See also, Hunter Keay s Conference Call - Initiating Coverage of the Passenger Airline Sector (3/18/11). Swift Transportation Company: Leveraged For Success (1/31/11). We initiated coverage of Swift with an Outperform rating and a $19 year-end 2011 target price. Swift has high-end operating and financial leverage within the Truckload sector and thus we believe should have some of the most upside earnings potential over the next few years in that sector into expected continued strong industry pricing fundamentals as well as an evolving company specific turnaround. WolfeTrahan.com Page 5 of 11

6 General Motors Company Initiation: Return of the General Compelling End Markets & Valuation (11/22/10), Tim Denoyer (Auto & Truck Manufacturing). We initiate coverage of General Motors Company with an Outperform rating and a $47 year-end 2011 target price. We believe GM s strong positions in emerging markets, restructured North American operations with labor stability, and compelling valuation more than compensate for the risks we detail in this report. Parcel Paradise Are Express Carriers Ready to Reclaim Pricing Power? (5/25/10). This 245-page primer report lays out our thesis for investing in the express stocks UPS, FedEx, and TNT. We provide detailed background and market share data on the express industry, as well as histories of UPS and FedEx. We then discuss historical volume and yield trends, explore relevant regulatory/legislative issues, and review current and historical valuations and stock performance through cycles. We also lay out our thesis on why better pricing fundamentals for UPS and FedEx could be the most important drivers of their stocks over the next five years. We conclude with detailed profiles of each company and explain why we currently favor UPS over FedEx. Fasten Your Seatbelts Rough Road Ahead (4/8/10), Tim Denoyer (Auto & Truck Manufacturing). This 438-page Auto & Truck Manufacturing industry primer explains in detail our fundamental investment thesis on the industry. It includes our proprietary survey of the trucking industry regarding equipment and capital spending plans, as well as our proprietary U.S. auto sales forecast model. The report also includes deep dives on industry economics, industry data and background, regulatory issues and trends in vehicle electrification. The next section of our report discusses our eleven individual company theses, with each company section averaging about 20 pages. A Training Manual Will Rail Renaissance Survive Recession and Re-Regulation? (05/20/09). This 400-page report provides an in-depth overview of the railroads historical and current operating, financial, and regulatory trends and changes. It includes analysis of rail financial performance during past recessions, including rail volumes back to the Great Depression and rail financial and stock performance out of historical downturns. We also provide a deep dive on rail end-segment customers as well as a full analysis of railroad pricing, expenses (including an in-depth discussion on pension and labor unions and costs), capital spending and returns on capital. The report concludes with individual company reports and models for all nine public railroad companies in our coverage. The Whole Trucking Story In-Depth Update, Industry Primer and Truck Carrier Survey (05/19/09). This 340-page trucking industry primer provides an in-depth look at our fundamental trucking thesis, including deep dives on the macro environment, industry background, regulatory issues and pensions. This report also breaks down the TL and LTL sectors, including analysis of valuation, volume, pricing and fuel, with discussion of competition with railroads and a large LTL bankruptcy case study. The report includes our truck carrier capacity and equipment survey results, and concludes with individual company reports and models for all 11 public trucking companies in our coverage universe. Updated and Revised Rail Map (05/19/09). Our updated and revised railroad map includes all of the major North American railroads as well as short-line railroads Genesee and Wyoming and RailAmerica. Our new map highlights new Rail, Coal and Ports including updates of recent track build-outs plus key lanes for each major Rail. It is available in hard copy for Wolfe Trahan clients by request. WolfeTrahan.com Page 6 of 11

7 WOLFE TRAHAN S TRANSPORTATION STOCK PERFORMANCE C11 Past 7 Rolling Five- C11 Past 7 Rolling Five- Company C08 C09 C10 YTD Days Year CAGR C08 C09 C10 YTD Days Year CAGR Airfreight (Asset-Based) Less-than-Truckload FedEx Corp. (FDX) -28.1% 30.1% 11.5% -11.3% 0.5% -6.5% Arkansas Best (ABFS) 37.2% -2.3% -6.8% -32.1% -0.7% -13.0% United Parcel Service (UPS) -22.0% 4.0% 26.5% -0.8% 1.3% -1.6% Con-way Inc. (CNW) -36.0% 31.2% 4.8% -23.4% 0.9% -8.7% Group Average -25.0% 17.0% 19.0% -6.1% 0.9% -4.0% Old Dominion Freight (ODFL) 23.2% 7.9% 56.3% 19.7% 0.5% 16.9% Saia, Inc. (SAIA) -18.3% 36.5% 11.9% -27.1% 4.7% -13.4% Other Airfreight YRC Worldwide, Inc. (YRCW) -83.2% -70.7% -82.3% -99.0% 16.0% -87.0% Atlas Air Worldwide (AAWW) -65.1% 97.1% 49.9% -31.4% -4.4% -3.3% Group Average -15.4% 0.5% -3.2% -32.4% 4.3% -21.0% Non-Asset Based Service Providers Railroads (Class I) C.H. Robinson (CHRW) 1.7% 6.7% 36.5% -16.1% -0.6% 9.8% Canadian National (CNI) -21.7% 47.9% 22.3% 15.9% -0.3% 10.8% Expeditors Int'l (EXPD) -25.5% 4.5% 57.0% -25.1% -3.2% -1.3% Canadian Pacific (CP) -48.0% 60.6% 20.0% -2.5% 4.8% 2.6% Group Average -11.9% 5.6% 46.8% -20.6% -1.9% 4.3% CSX Corporation (CSX) -26.2% 49.3% 33.2% -2.3% -3.2% 11.4% Norfolk Southern (NSC) -6.7% 11.4% 19.8% 16.3% -2.3% 7.6% Asset-Light Based Forwarders Union Pacific (UNP) -23.9% 33.7% 45.0% 8.3% -2.5% 16.7% Forward Air (FWRD) -22.1% 3.1% 13.4% 10.5% 0.7% -0.7% Group Average -25.3% 40.6% 28.1% 7.1% -0.7% 9.8% Hub Group (HUBG) -0.2% 1.0% 31.2% -13.0% 3.2% 1.9% Landstar (LSTR) -8.8% 0.9% 5.6% 11.4% 0.3% 2.2% Railroads (Regional) Pacer Int'l (PACR) -28.6% -69.7% 116.5% -35.7% 0.9% -31.4% Genesee & Wyoming (GWR) 26.2% 7.0% 62.2% 13.4% -0.4% 16.7% Universal Truckload (UACL) (1) -26.1% 27.8% -12.0% 1.0% 17.4% -6.8% Kansas City Southern (KSU) -44.5% 74.8% 43.8% 37.3% -4.4% 18.4% UTi Worldwide (UTIW) -26.8% -0.1% 48.0% -38.0% -2.7% -14.2% RailAmerica (RA) N/A N/A 6.1% 7.3% -0.4% N/A Group Average -18.8% -6.2% 33.8% -10.6% 3.3% -8.2% Group Average -9.2% 40.9% 37.4% 19.4% -1.8% 17.5% Truckload Other Rail Celadon Group (CLDN) -6.9% 27.2% 36.3% -25.0% 3.7% -10.5% Wabtec Corporation (WAB) 15.4% 2.7% 29.5% 26.1% -2.7% 15.0% Covenant Transportation (CVTI) -70.2% 110.5% 129.9% -69.3% 0.7% -23.8% Heartland Express (HTLD) 11.1% -3.1% 4.9% -16.2% -0.5% -2.7% Other Truck J.B. Hunt (JBHT) -4.6% 22.8% 26.5% 7.9% -3.1% 14.7% Ryder System (R) -17.5% 6.2% 27.9% -1.7% -0.5% 0.3% Knight Transportation (KNX) 8.8% 19.7% -1.5% -22.0% 0.1% -3.8% Swift Transportation (SWFT) N/A N/A N/A -28.1% 6.1% N/A S&P % -38.5% 23.5% 10.7% -1.9% -2.6% Werner Enterprises (WERN) 1.8% 14.2% 14.1% 3.4% 0.4% 4.7% Group Average -10.0% 31.9% 35.0% -21.3% 1.1% -3.6% Prices dated as of: 12/08/11 Source: FactSet Research Systems Inc.; Wolfe Trahan & Co. WOLFE TRAHAN S TRANSPORTATION RECENT FUEL COST TRENDS 4Q:10 1Q:11 2Q:11 3Q:11 To Date Week 43 Week 44 Week 45 Week 46 Week 47 Week 48 Average Oil Price (WTIC, $/barrel) $84.75 $93.32 $ $89.80 $92.21 $92.32 $93.24 $96.97 $99.32 $96.70 $99.75 y-o-y change 12.4% 18.7% 31.6% 18.2% 8.8% 12.5% 9.8% 11.6% 20.8% 17.5% 15.0% change from previous period 11.6% 10.1% 10.2% -12.6% 2.7% 6.3% 1.0% 4.0% 2.4% -2.6% 3.2% Avg On-Highway Diesel Price (Truck; $/gallon) $3.158 $3.630 $4.017 $3.858 $3.891 $3.892 $3.887 $3.987 $4.010 $3.964 $3.931 y-o-y change 15.2% 27.2% 32.6% 31.2% 23.2% 26.9% 24.7% 25.2% 26.5% 25.4% 23.0% change from previous period 7.4% 15.0% 10.7% -4.0% 0.8% 1.8% -0.1% 2.6% 0.6% -1.1% -0.8% Rail Diesel (No. 2 NY Heating Oil, $/gallon) $2.335 $2.806 $3.049 $2.970 $3.001 $3.045 $3.029 $3.125 $3.105 $2.971 $2.987 y-o-y change 20.5% 37.5% 45.3% 47.1% 28.6% 36.9% 30.8% 30.7% 35.8% 30.4% 25.4% change from previous period 15.6% 20.2% 8.7% -2.6% 1.1% 1.3% -0.5% 3.2% -0.6% -4.3% 0.5% Avg Jet Fuel Price (Gulf Coast, $/gallon) $2.331 $2.855 $3.143 $3.022 $3.002 $3.041 $3.027 $3.127 $3.094 $2.954 $2.970 y-o-y change 19.5% 39.2% 48.0% 46.4% 28.8% 35.4% 30.9% 30.7% 35.3% 28.8% 24.7% change from previous period 13.0% 22.5% 10.1% -3.9% -0.6% 1.3% -0.5% 3.3% -1.1% -4.5% 0.5% Note: Most recent week's data represents closing prices on December 2, 2011, for oil, rail diesel, and jet fuel prices; and Dept of Energy survey prices on December 5, 2011, for highway diesel. WolfeTrahan.com Page 7 of 11

8 Railroads Edward M. Wolfe Scott H. Group Footnotes: (1) Most recently reported (quarterly basis) fully-diluted share count. (2) Date of last rating change along with direction of change (U=Upgrade, D=Downgrade, S=Suspended, I=Initiated). (3) Please go to WolfeTrahan.com/Disclosures for risks to our price targets for Outperform and Underperform rated stocks. (4) "FactSet average rating" -- 1 = "Buy", 2="Hold", 3 = "Sell", all of which as defined by FactSet. "# of Analysts" -- number of sell side analysts covering the stock. (5) S&P 500 forward EPS based on FactSet Consensus estimates. (6) Enterprise value defined as market cap plus debt minus cash and cash equivalents. For EV/EBITDAR calculation, we have added present value of off balance sheet debt to EV and rental expense to EBITDA. (7) Blended 12-Month Rolling Forward P/E and EV/EBITDAR consist of 12-month forward estimates from current date. (8) Historical 5- and 10-year averages based on weekly averages of forward-rolling metrics using Consensus estimates. (9) Based on Adjusted EBITDA(R) for RA beginning in 2009, which removes $17M sale of Section 45G tax credits shown as contra expense in Other expenses. WOLFE TRAHAN RAILROAD UNIVERSE P/E, EV/EBITDAR, AND PRICE/BOOK VALUE MULTIPLES E Share Market Rating 2012 Avg Rating Dividend SECTOR WEIGHTING: Price ($) 52 week range Count Cap Since Target and # of Yield Market Overweight 12/8/2011 High Low (M)(1) ($M) Rating (U/D)(2) Price (3) Analysts (4) (%) Large-Cap Railroads Canadian National (CNI) $77.06 $81.26 $ $34,785 Underperform 9/6/11 (D) $ / 24 firms 1.7% Canadian Pacific (CP) $63.19 $69.92 $ $10,774 Underperform 3/9/09 (D) $ / 23 firms 1.9% CSX Corp. (CSX) $21.04 $27.06 $ ,077.0 $22,660 Outperform 9/6/11 (U) $ / 28 firms 2.3% Norfolk Southern Corp. (NSC) $73.04 $78.40 $ $25,491 Peer Perform 11/23/10 (D) / 28 firms 2.4% Union Pacific (UNP) $ $ $ $48,991 Outperform 10/28/09 (U) $ / 27 firms 2.4% Small-Cap Railroads Genesee and Wyoming (GWR) $60.07 $63.73 $ $2,572 Outperform 9/6/11 (U) $ / 16 firms - Kansas City Southern (KSU) $65.71 $70.48 $ $7,219 Peer Perform 4/28/10 (D) / 20 firms - RailAmerica (RA) $13.90 $17.34 $ $724 Peer Perform 3/3/10 (D) / 14 firms - Other Rail Wabtec Corporation (WAB) $66.67 $72.43 $ $3,225 Peer Perform 5/20/10 (I) / 9 firms 0.2% S&P 500 1, , , % EPS Estimates Book Value / Share E E 2012E 2013E 2010 Current 2011E 2012E 2013E Large-Cap Railroads Canadian National (CNI) $2.86 $4.07 $4.83 $5.10 $5.50 $23.28 $25.82 $26.31 $27.53 $29.04 Canadian Pacific (CP) $2.22 $3.74 $3.30 $4.10 $4.65 $27.64 $30.49 $30.57 $33.00 $36.21 CSX Corp. (CSX) $0.90 $1.38 $1.67 $1.80 $2.15 $7.54 $7.68 $9.28 $10.99 $13.02 Norfolk Southern Corp. (NSC) $2.74 $3.92 $5.29 $5.60 $6.45 $28.69 $29.38 $34.21 $39.85 $45.05 Union Pacific (UNP) $3.56 $5.54 $6.55 $7.80 $9.00 $35.36 $38.04 $38.18 $41.79 $46.03 Small-Cap Railroads Genesee and Wyoming (GWR) $1.55 $2.15 $2.77 $3.10 $3.60 $19.53 $21.14 $22.29 $25.35 $28.95 Kansas City Southern (KSU) $0.62 $2.07 $2.86 $3.35 $3.85 $22.78 $24.29 $24.90 $27.64 $30.70 RailAmerica (RA) $0.33 $0.61 $0.77 $0.90 $1.05 $12.86 $12.92 $12.72 $13.71 $14.87 Wabtec Corporation (WAB) $2.36 $2.56 $3.75 $4.15 $4.60 $18.82 $20.97 $21.80 $25.53 $29.74 S&P 500 (5) Absolute P/E Multiples Rolling Price / Book Value (Absolute) 5-Year 10-Year 12-Month E Avg. (8) Avg. (8) 2011E 2012E 2013E Fwd (7) Current 2011E 2012E 2013E Large-Cap Railroads Canadian National (CNI) 13.9x 13.8x 16.0x 15.1x 14.0x 15.2x 3.0x 2.9x 2.8x 2.7x Canadian Pacific (CP) 14.0x 13.5x 19.1x 15.4x 13.6x 15.7x 2.1x 2.1x 1.9x 1.7x CSX Corp. (CSX) 13.6x 13.5x 12.6x 11.7x 9.8x 11.7x 2.7x 2.3x 1.9x 1.6x Norfolk Southern Corp. (NSC) 13.0x 13.6x 13.8x 13.0x 11.3x 13.1x 2.5x 2.1x 1.8x 1.6x Union Pacific (UNP) 14.1x 14.3x 15.3x 12.9x 11.2x 13.0x 2.6x 2.6x 2.4x 2.2x Group Average 13.7x 13.7x 15.4x 13.6x 12.0x 13.7x 2.6x 2.4x 2.2x 2.0x Small-Cap Railroads Genesee and Wyoming (GWR) 17.9x 16.3x 21.7x 19.4x 16.7x 19.5x 2.8x 2.7x 2.4x 2.1x Kansas City Southern (KSU) 19.1x 20.8x 23.0x 19.6x 17.1x 19.8x 2.7x 2.6x 2.4x 2.1x RailAmerica (RA) 19.4x 13.6x 18.0x 15.5x 13.2x 15.6x 1.1x 1.1x 1.0x 0.9x Group Average 18.8x 16.9x 20.9x 18.1x 15.7x 18.3x 2.2x 2.1x 1.9x 1.7x Wabtec Corporation (WAB) 15.5x 17.0x 17.8x 16.1x 14.5x 16.2x 3.2x 3.1x 2.6x 2.2x Railroad Average 15.6x 15.2x 17.5x 15.4x 13.5x 15.5x 2.5x 2.4x 2.1x 1.9x S&P x 16.7x 12.7x 12.0x 10.7x 12.1x Enterprise Value / EBITDAR (6) Rolling Enterprise Value / EBITDA (6) 5-Year 10-Year 12-Month E Avg. (8) Avg. (8) 2011E 2012E 2013E Fwd (7) E 2012E 2013E Large-Cap Railroads Canadian National (CNI) 8.2x 8.2x 9.4x 8.9x 8.4x 8.9x 11.0x 9.7x 9.2x 8.7x Canadian Pacific (CP) 7.8x 6.0x 9.3x 8.4x 7.7x 8.4x 9.7x 10.0x 9.0x 8.2x CSX Corp. (CSX) 6.6x 6.2x 6.3x 6.1x 5.5x 6.1x 7.6x 6.9x 6.6x 6.0x Norfolk Southern Corp. (NSC) 7.0x 7.3x 7.3x 7.1x 6.5x 7.2x 9.2x 7.7x 7.5x 6.8x Union Pacific (UNP) 6.9x 6.7x 7.6x 6.7x 6.1x 6.8x 8.8x 7.8x 6.9x 6.3x Group Average 7.3x 6.9x 8.0x 7.4x 6.8x 7.5x 9.2x 8.4x 7.8x 7.2x Small-Cap Railroads Genesee and Wyoming (GWR) 9.5x 8.5x 11.5x 10.4x 9.3x 10.5x 16.5x 12.1x 11.0x 9.7x Kansas City Southern (KSU) 8.1x 7.9x 10.0x 9.2x 8.3x 9.3x 13.1x 11.1x 10.2x 9.2x RailAmerica (RA) (9) 6.3x 6.3x 6.9x 6.6x 6.3x 6.6x 7.7x 7.1x 6.8x 6.6x Group Average 8.0x 7.6x 9.5x 8.7x 8.0x 8.8x 12.4x 10.1x 9.3x 8.5x Wabtec Corporation (WAB) 8.6x 8.7x 10.2x 9.4x 8.7x 9.5x 14.3x 10.5x 9.7x 8.9x Railroad Average 7.7x 7.3x 8.7x 8.1x 7.4x 8.1x 10.9x 9.2x 8.5x 7.8x Source: Company reports; FactSet Research Systems Inc.; Wolfe Trahan & Co. estimates. WolfeTrahan.com Page 8 of 11

9 WOLFE TRAHAN GROUND TRANSPORT TRUCK UNIVERSE EPS, EV/EBITDA AND BOOK VALUE MULTIPLES E Trucking Edward M. Wolfe Scott H. Group Footnotes: (1) Most recently reported (quarterly basis) fully-diluted share count. (2) Date of last rating change along with direction of change (U=Upgrade, D=Downgrade, S=Suspended, I=Initiated). (3) Please go to WolfeTrahan.com/Disclosures for risks to our price targets for Outperform and Underperform rated stocks. (4) "FactSet average rating" -- 1 = "Buy", 2 = "Hold", 3 = "Sell", all of which as defined by FactSet. "#Analysts" -- number of sell side analysts covering the stock. (5) CGI's EPS shown on calendar basis and P/E and EV/EBITDA are based on calendar estimates. All other numbers represent its June end Fiscal year. Our F12 and F13 EPS estimates are $0.76 and $0.80, respectively. (6) Blended 12-Month Rolling Forward P/E and EV/EBITDAR consist of 12- month forward estimates from current date. Average Forward P/E for LTLs excludes ABFS. (7) Enterprise value defined as market cap plus debt minus cash and cash equivalents. Excludes OBD. Ryder is an EV/EBITDAR calculation which includes off-balance sheet debt in EV and includes Rental Expense. (8) S&P 500 forward EPS based on FactSet Consensus estimates. (9) YRCW has been excluded from average P/E and P/B calculations. 1.9B shares outstanding to reflect full impact of recent 97.5% shareholder dilution. (10) Historical 10-year averages based on weekly averages of forward-rolling metrics using Consensus estimates. (11) CVTI has been excluded from average P/E, EV/EBITDA and P/B calculations given expectations for operating losses in Share Market Rating 2012 FactSet Dividend SECTOR WEIGHTING: Price ($) 52 week range Count Cap Since Target Avg. Rating / Yield Market Weight 12/8/2011 Low High (M)(1) (MM) Rating (U/D)(2) Price (3) Analysts (4) (%) Truckload (TL) Celadon Group, Inc. (CGI) $11.09 $8.18 $ $251 Peer Perform 6/6/11 (U) / 11 firms 0.7% Covenant Transportation (CVTI) $2.97 $2.35 $ $44 Peer Perform 10/11/11 (D) / 5 firms - Heartland Express (HTLD) $13.42 $12.75 $ $1,210 Underperform 11/14/11 (D) $ / 18 firms 0.6% Knight Transportation (KNX) $14.82 $12.63 $ $1,189 Outperform 6/7/10 (U) $ / 25 firms 1.6% Swift Transportation Co. (SWFT) $9.00 $5.39 $ $1,256 Outperform 1/26/11 (I) $ / 16 firms - Werner Enterprises (WERN) $23.37 $19.78 $ $1,711 Outperform 8/4/11 (U) $ / 24 firms 0.9% Less-than-Truckload (LTL) Arkansas Best Corp. (ABFS) $18.62 $14.22 $ $473 Peer Perform 9/8/10 (D) / 18 firms 0.6% Con-way Inc. (CNW) $28.03 $20.56 $ $1,573 Peer Perform 4/12/10 (D) / 23 firms 1.4% Old Dominion (ODFL) $38.29 $27.40 $ $2,199 Peer Perform 9/6/11 (D) / 19 firms - Saia, Inc. (SAIA) $12.10 $9.27 $ $196 Peer Perform 9/6/11 (D) / 8 firms - YRC Worldwide Inc. (YRCW) (9) $11.28 $9.00 $1, $77 Underperform 10/12/10 (D) $0 2.3 / 9 firms - Other Truck Ryder System Inc. (R) $51.77 $34.28 $ $2,627 Peer Perform 10/26/11 (U) / 14 firms 2.2% S&P 500 1, , , % EPS Estimates Absolute P/E Multiple Rolling 10-Year 12 Month E E 2012E 2013E Avg. (10) 2011E 2012E 2013E Forward (6) Truckload (TL) Celadon Group, Inc. (CGI) (5) ($0.01) $0.46 $0.70 $0.80 $ x 15.8x 13.8x 12.3x 13.9x Covenant Transportation (CVTI) (11 ($0.85) $0.20 ($0.23) $0.20 $ x NM 15.0x 9.9x 18.3x Heartland Express (HTLD) $0.50 $0.63 $0.72 $0.75 $ x 18.6x 17.8x 15.8x 17.9x Knight Transportation (KNX) $0.60 $0.72 $0.72 $0.90 $ x 20.5x 16.6x 14.1x 16.8x Swift Transportation Co. (SWFT) ($1.83) ($0.55) $0.57 $0.77 $ x 15.7x 11.7x 9.5x 11.9x Werner Enterprises (WERN) $0.78 $1.10 $1.40 $1.55 $ x 16.6x 15.1x 13.7x 15.2x Group Average x 17.4x 15.0x 12.6x 15.1x Less-than-Truckload (LTL) Arkansas Best Corp. (ABFS) ($2.38) ($1.35) $0.51 $0.98 $ x 36.2x 19.0x 10.6x 19.8x Con-way Inc. (CNW) $0.61 $0.47 $1.65 $1.90 $ x 17.0x 14.7x 11.9x 14.9x Old Dominion (ODFL) $0.62 $1.35 $2.41 $2.60 $ x 15.9x 14.7x 13.4x 14.8x Saia, Inc. (SAIA) ($0.66) $0.08 $0.68 $0.93 $ x 17.8x 13.0x 11.0x 13.3x YRC Worldwide Inc. (YRCW) (9) ($253.75) ($8.30) ($2.11) ($26.44) ($22.76) 10.0x NM NM NM NM Group Average x 16.9x 14.2x 12.1x 14.3x Other Truck Ryder System Inc. (R) $1.56 $2.25 $3.49 $3.90 $ x 14.8x 13.3x 11.5x 13.4x Trucking Average x 18.9x 15.0x 12.2x 15.2x S&P 500 (8) x 12.7x 12.0x 10.7x 12.1x Enterprise Value / EBITDA (7) Rolling Price / Book Value (Absolute) 10-Year 12 Month E Avg. (10) 2011E 2012E 2013E Forward (6) 2010 Current 2011E 2012E 2013E Truckload (TL) Celadon Group, Inc. (CGI) (5) 4.1x 4.8x 4.8x 4.4x 4.8x 1.6x 1.4x 1.5x 1.4x 1.3x Covenant Transportation (CVTI) (11 1.9x 4.7x 3.8x 3.5x 3.8x 0.4x 0.5x 0.4x 0.4x 0.4x Heartland Express (HTLD) 8.3x 6.8x 6.5x 6.0x 6.5x 3.6x 3.4x 3.4x 3.2x 2.9x Knight Transportation (KNX) 8.2x 7.1x 6.1x 5.5x 6.2x 2.5x 2.6x 2.5x 2.3x 2.1x Swift Transportation Co. (SWFT) 5.6x 5.6x 5.1x 4.7x 5.1x NM NM NM 6.7x 3.7x Werner Enterprises (WERN) 4.8x 5.0x 4.7x 4.4x 4.7x 2.4x 2.3x 2.4x 2.3x 2.3x Group Average 6.2x 5.8x 5.4x 5.0x 5.5x 2.5x 2.4x 2.4x 3.1x 2.4x Less-than-Truckload (LTL) Arkansas Best Corp. (ABFS) 4.5x 3.6x 3.0x 2.4x 3.1x 1.0x 1.0x 1.0x 0.9x 0.8x Con-way Inc. (CNW) 5.6x 4.8x 4.5x 4.1x 4.5x 1.8x 1.8x 1.8x 1.6x 1.5x Old Dominion (ODFL) 6.3x 7.5x 7.0x 6.2x 7.0x 2.5x 2.6x 2.5x 2.1x 1.9x Saia, Inc. (SAIA) 4.4x 4.2x 3.6x 3.2x 3.6x 0.9x 0.7x 0.9x 0.8x 0.8x YRC Worldwide Inc. (YRCW) (9) 6.3x 11.6x 6.5x 5.5x 7.0x NM NM NM NM NM Group Average 5.4x 6.3x 4.9x 4.3x 5.0x 1.6x 1.5x 1.5x 1.4x 1.2x Other Truck Ryder System Inc. (R) 3.8x 4.1x 3.8x 3.6x 3.9x 1.9x 1.8x 1.8x 1.7x 1.6x Trucking Average 5.3x 5.8x 4.9x 4.5x 5.0x 1.9x 1.8x 1.8x 2.1x 1.7x Source: Company reports; FactSet Research Systems Inc.; Wolfe Trahan & Co. estimates. WolfeTrahan.com Page 9 of 11

10 WOLFE TRAHAN AIRFREIGHT & LOGISTICS UNIVERSE EPS, EV/EBITDA AND BOOK VALUE MULTIPLES E Airfreight/Logistics Edward M. Wolfe Scott H. Group Footnotes: (1) TNTE price and EPS denominated in Euros ( ); traded on Euronext Amsterdam. Historical per share numbers based on initial sharecount of 542M. Share Market Rating 2012 FactSet Dividend SECTOR WEIGHTING: Price ($) 52 week range Count Cap Since Target Avg. Rating/ Yield Market Weight 12/8/2011 Low High (MM) (2) (MM) Rating (U/D) (3) Price (4) # Analysts (5) (%) Express/Parcel Carriers FedEx Corp. (FDX) $82.47 $64.07 $ $26,225 Peer Perform 3/18/10 (D) / 29 firms 0.6% TNT Express N.V. (TNTE ) (1) ,069 Outperform 7/18/11 (I) / 24 firms 1.4% United Parcel Service (UPS) $72.02 $60.74 $ $71,084 Peer Perform 9/6/11 (D) / 27 firms 2.9% Atlas Air Worldwide (AAWW) $38.30 $29.50 $ $1,013 Underperform 9/6/11 (D) $ / 11 firms - Non-Asset-Based Forwarders C.H. Robinson (CHRW) $67.25 $62.30 $ $11,061 Outperform 10/3/08 (U) $ / 26 firms 2.0% Expeditors International (EXPD) $40.87 $38.25 $ $8,776 Outperform 11/23/10 (U) $ / 20 firms 1.2% Asset-Light Forwarders Forward Air (FWRD) $31.36 $23.70 $ $927 Underperform 11/23/10 (D) $ / 15 firms 0.9% Hub Group (HUBG) $30.58 $25.77 $ $1,132 Outperform 8/10/11 (U) $ / 17 firms - J.B. Hunt Transport (JBHT) $44.04 $34.42 $ $5,334 Outperform 10/14/09 (U) $ / 28 firms 1.2% Landstar System (LSTR) $45.60 $36.64 $ $2,161 Peer Perform 11/14/11 (U) / 21 firms 0.5% Pacer International (PACR) $4.40 $3.30 $ $154 Peer Perform 11/14/11 (U) / 11 firms - Roadrunner Transportation (RRTS) $14.75 $12.48 $ $468 Peer Perform 12/7/11 (I) / 7 firms - Universal Truckload (UACL) $16.08 $11.14 $ $250 Peer Perform 6/6/11 (U) / 5 firms - UTi Worldwide (UTIW) $13.15 $11.94 $ $1,360 Peer Perform 3/24/11 (D) / 17 firms 0.5% (2) Most recently reported (quarterly S&P 500 1, , , % basis) fully diluted share count. EPS Estimates Absolute P/E Multiples 12 Month (3) Date of last rating change along 2011E 2012E 2013E with direction of change 10-Year Rolling Check FDX Footnote (U=Upgrade, D=Downgrade, E E 2012E 2013E Avg. (11) Forward (10) S=Suspended, I=Initiated). F07 - $ linked Express/Parcel Carriers F08 - $ linked FedEx Corp. (FDX) (6) $2.73 $4.51 $5.56 $6.25 $ x 14.8x 13.2x 11.9x 13.3x (4) Please go to F07 - $ hard code WolfeTrahan.com/Disclosures for TNT Express N.V. (TNTE ) (1) NA 28.5x 15.3x 10.3x 15.9x F08 - $ hard code risks to our price targets for United Parcel Service (UPS) $2.31 $3.56 $4.22 $4.70 $ x 17.1x 15.3x 13.6x 15.5x Outperform and Underperform rated Group Average x 16.0x 14.3x 12.7x 14.4x stocks. Atlas Air Worldwide (AAWW) $3.45 $5.78 $4.26 $3.70 $ x 9.0x 10.3x 10.1x 10.2x (5) "FactSet average rating" -- 1 = "Buy", 2= "Hold", 3 = "Sell", all of which as defined by FactSet. "#Analysts" -- number of sell side analysts covering the stock. (6) FDX's EPS shown on calendar basis and P/E and EV/EBITDA are based on calendar estimates. All other numbers represent its May end Fiscal year. Our F12 and F13 EPS estimates are $5.75 and $6.70. (7) UTIW fiscal year ends January 31. F12, F13, and F14 end Jan. 31, 2012, 2013 and 2014, and represent calendar years 2011, 2012, and 2013, respectively. (8) S&P 500 forward EPS based on FactSet Consensus estimates. (9) Enterprise value defined as market cap plus debt minus cash and cash equivalents. Excludes OBD for most, except for FDX, TNTE, UPS, AAWW and PACR where EV/EBITDARs include Off- Balance Sheet Debt in EV and associated Rental Expense in EBITDAR. (10) Blended 12-Month Rolling Forward P/E and EV/EBITDAR consist of 12-month forward estimates from current date. Non-Asset-Based Forwarders C.H. Robinson (CHRW) $2.13 $2.33 $2.65 $3.00 $ x 25.4x 22.4x 19.5x 22.6x Expeditors International (EXPD) $1.11 $1.59 $1.83 $2.03 $ x 22.3x 20.2x 18.2x 20.3x Group Average x 23.9x 21.3x 18.8x 21.5x Asset-Light Forwarders Forward Air (FWRD) $0.49 $1.10 $1.56 $1.63 $ x 20.1x 19.2x 16.5x 19.3x Hub Group (HUBG) $0.95 $1.16 $1.62 $1.85 $ x 18.9x 16.5x 14.2x 16.7x J.B. Hunt Transport (JBHT) $1.10 $1.58 $2.09 $2.35 $ x 21.0x 18.7x 16.3x 18.9x Landstar (LSTR) $1.37 $1.81 $2.33 $2.50 $ x 19.5x 18.2x 16.0x 18.3x Pacer International (PACR) ($0.64) $0.08 $0.35 $0.35 $ x 12.4x 12.4x 9.8x 12.4x Roadrunner Transportation (RRTS) ($0.03) $0.59 $0.81 $1.07 $1.25 NA 18.2x 13.8x 11.8x 14.1x Universal Truckload (UACL) $0.36 $0.60 $1.08 $1.21 $ x 15.0x 13.3x 12.4x 13.4x UTi Worldwide (UTIW) (7) $0.45 $0.69 $0.76 $0.87 $ x 17.2x 15.2x 13.2x 15.3x Group Average x 17.8x 15.9x 13.8x 16.1x Universe Average x 18.5x 16.0x 13.8x 16.2x S&P 500 (8) x 12.7x 12.0x 10.7x 12.1x Enterprise Value / EBITDA(R) (9) 12 Month Price / Book Value (Absolute) 10-Year 2011E 2012E 2013E Rolling E Avg. (11) Forward (10) 2010 Current 2011E 2012E 2013E Express/Parcel Carriers FedEx Corp. (FDX) (6) 6.9x 6.2x 5.7x 5.4x 5.8x 1.8x 1.7x 1.6x 1.5x 1.3x TNT Express N.V. (TNTE ) (1) NA 5.3x 4.6x 3.9x 4.7x 1.0x 1.0x 1.1x 1.0x 0.9x United Parcel Service (UPS) 9.8x 9.2x 8.6x 7.9x 8.7x 9.0x 9.0x 9.1x 8.7x 7.4x Group Average 8.4x 7.7x 7.2x 6.7x 7.2x 5.4x 5.4x 5.3x 5.1x 4.3x Atlas Air Worldwide (AAWW) 7.4x 7.3x 7.0x 5.8x 7.0x 1.0x 0.9x 0.9x 0.8x 0.8x Non-Asset-Based Forwarders C.H. Robinson (CHRW) 14.3x 14.5x 12.9x 11.8x 13.0x 9.3x 8.7x 8.7x 8.2x 7.4x Expeditors International (EXPD) 15.4x 11.4x 10.3x 9.4x 10.4x 5.1x 4.5x 4.8x 4.4x 4.0x Group Average 14.9x 13.0x 11.6x 10.6x 11.7x 7.2x 6.6x 6.7x 6.3x 5.7x (11) Historical 10-year averages Asset-Light Forwarders Forward Air (FWRD) 11.0x 9.3x 8.9x 8.2x 9.0x 3.6x 3.4x 3.4x 3.0x 2.6x based on weekly averages of Hub Group (HUBG) 9.9x 10.3x 9.1x 7.9x 9.2x 3.0x 2.7x 2.7x 2.3x 2.0x forward-rolling metrics using J.B. Hunt Transport (JBHT) 7.0x 9.3x 8.7x 8.0x 8.7x 9.8x 10.7x 10.5x 9.8x 9.2x Consensus estimates. AAWW uses Landstar (LSTR) 10.9x 10.6x 10.0x 9.5x 10.1x 9.0x 7.8x 7.1x 6.9x 6.4x a 7-year avg (emerged from bankruptcy in 2004) and UACL uses Pacer International (PACR) 5.7x 5.0x 4.9x 4.6x 4.9x 1.6x 1.4x 1.4x 1.2x 1.1x a 6-year avg (IPO in 2005). Roadrunner Transportation (RRTS) NA 12.0x 8.7x 7.6x 9.0x 1.7x 1.6x 1.6x 1.5x 1.3x Universal Truckload (UACL) 6.9x 6.3x 5.9x 5.6x 5.9x 1.6x 1.6x 1.5x 1.4x 1.2x UTi Worldwide (UTIW) (7) 10.1x 7.1x 6.4x 5.8x 6.4x 1.5x 1.5x 1.4x 1.4x 1.5x Group Average 8.8x 8.7x 7.8x 7.2x 7.9x 4.0x 3.8x 3.7x 3.4x 3.2x Universe Average 9.6x 8.9x 8.0x 7.3x 8.1x 4.2x 4.0x 4.0x 3.7x 3.4x Source: Company reports; FactSet Research Systems Inc.; Wolfe Trahan & Co. estimates. WolfeTrahan.com Page 10 of 11

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