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Special Committee on Intermodal Transportation and Economic Expansion Workshop October 23, 2009 Patrick E. Quinn Co-Chairman & President U.S. Xpress Enterprises Industry Facts • Represents roughly 5% of the nation’s gross domestic product (GDP) • $660 billion industry, hauling 10.2 billion tons of freight annually •8.9 million people throughout the economy employed in trucking jobs • 3.5 million truck drivers, including local & over-the-road Industry Facts • Operates 2.0 million truck-tractors and 7.0 million total heavy duty commercial trucks • Class 8 trucks log 139 billion miles annually •Consumes 39 billion gallons of diesel annually • Exclusively serves over 80% of communities in the U.S. Distribution of Tonnage by Mode: 2008 vs 2020 Rail Intermodal 1.1% Pipeline 9.9% Rail Intermodal 1.5% Pipeline 8.5% Air 0.1% Air 0.1% Water 5.7% Water 6.3% Rail Carload 13.3% Rail Carload 13.8% Truck 68.8% 2008 Source: U.S. Freight Transportation Forecast to…2020 Truck 70.9% 2020 Thousands U.S. For-Hire Trucking Employment 1,500 Through September 2009 1,400 1,300 Lowest level since 1995 1,200 1,100 1,000 1990 1992 1994 1996 1998 Sources: Department of Labor and ATA 2000 2002 2004 2006 2008 Housing Price Index Average Annual Growth Rate: -9.4% 2006 – 2009:Q2 200 175 150 125 100 75 50 1987 1989 1991 1993 1995 1997 1999 2001 Sources: S&P/Case-Shiller National Index and ATA 2003 2005 2007 2009 U.S. Manufacturing Production Through August 2009; 2000 = 100 115.0 110.0 105.0 100.0 6.7% drop peak-to-trough 95.0 17.3% drop peak-to-trough 90.0 1998 2000 2002 Sources: Federal Reserve Board and ATA 2004 2006 2008 Total Business Inventories-toSales Ratio 1.6 (Includes retail, wholesale, and manufacturing; Through August 2009) Significant progress has been made to clear out bloated inventories. 1.5 1.4 1.3 1.2 1992 1994 1996 1998 2000 Sources: Department of Commerce and ATA 2002 2004 2006 2008 ATA’s For-Hire Truck Tonnage Index Seasonally Adjusted; 2000 = 100 125 Through August 2009 Aug: -7.5% from Aug 2008 120 115 110 105 100 95 Looks like a bottom, finally. 1999 Source: ATA 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 150 140 ATA’s For-Hire Truck Revenue Index 2000=100; Through August 2009 130 120 110 100 90 Aug: -24.9% from Aug 2008 80 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: ATA Trucking Failures Failures only includes fleets with at least five trucks 1,400 1,200 Failures are surprisingly low, but truck counts are more important than the number of carriers that fail. 1,000 800 600 400 Source: Avondale Partners, LLC Q1 09 Q1 08 Q1 07 Q1 06 Q1 05 Q1 04 Q1 03 Q1 02 Q1 01 Q1 00 200 Fleets Continue to Downsize 1% 0% -1% -2% -3% -4% -5% -6% -7% -8% -9% -10% Cumulative Decrease Aug 2009 vs Aug 2008 ! This slide shows the change in the fleet size for those TL carriers that are surviving. It is not total industry capacity, which has fallen significantly more. Last 9 Quarters Source: ATA’s Trucking Activity Report Year Earlier U.S. Class 8 Truck Sales Monthly Retail Sales; Through August 2009 30,000 25,000 Truck sales are running well below historical replacement rates. 20,000 15,000 10,000 5,000 0 No Pre-buy Here 2005 Source: Wards 2006 2007 2008 2009 On-Highway Diesel Prices Price Per Gallon Record: $4.76 (07/14/08) $4.90 $4.40 $3.90 $3.40 $2.90 $2.40 $1.90 $2.58 (10/5/09) $1.40 $0.90 Jan-94 Jan-96 Jan-98 Jan-00 Source: Energy Information Administration Jan-02 Jan-04 Jan-06 Jan-08 Top Industry Issues 2009 1. Economy 2. Government Regulation 3. Fuel Issues 4. Congestion/Highway Infrastructure 5. Hours of Service 6. Commercial Driver Issues 7. Environmental Issues 8. Tolls/Highway Funding 9. Truck Size and Weight 10.Onboard Truck Technology Congestion/Highway Infrastructure FHWA report on top highway bottlenecks 226 Million Hours Lost Annually Cost $19 Billion/year (ATRI) Physical bottlenecks account for 40% of congestion ATA supports diesel tax increase provided funds dedicated to addressing bottlenecks Tolls/Highway Funding Fuel tax fairest, most efficient source of funding for highways Oppose tolls on existing highways High administrative costs Cause diversion to local roads Oppose privatization of existing highways Would consider supporting shipper fees provided truck driver/carrier is not tax collector and no serious administrative/collection issues Revenue should go to freight infrastructure projects proportionate to modal contribution Truck Size and Weight Reforms can produce safety, energy & emissions, economic benefits ATA supports a process under which states can petition the federal government for regulatory relief Support state option – no mandates Commission Freight Recommendations Create and fund a national freight transportation program in conjunction with States and metropolitan areas and consistent with a National Freight Transportation Plan, that eliminates chokepoints and increases throughput Federal grants for meritorious projects Establish dedicated freight fund