2010 John Larkin

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You are viewing presentations from conferences that I have attended. Please enjoy & if we can help you with any logistics projects in the Americas please contact me at 678.364.3475

Bill was also on the Board of Directors for the St.Vincent DePaul Foodbank in Roseville California helping with the fund raising and meals to the poor program. While based in Northern California he was successful in fund raising programs for the Crusade of Mercy and helped Father Dan Madigan at the Sacramento Food Bank also. For 2008, Bill is a member of the Board for WORKTEC on also an Advisory Board Member for Boys and Girls Club for Metro Atlanta-Clayton County Chapter. See www.worktec.biz or www.bgcma.org . Bill is also on the Board of Directors for the Southeastern Warehouse Association & represents Georgia for 2010-2012.

Regards,

Bill Stankiewicz
Vice President and General Manager
Shippers Warehouse
Email: williams@shipperswarehouse.com
www.shipperswarehousega.com
http://www.linkedin.com/in/billstankiewicz2006
http://twitter.com/BillStankiewicz
http://www.topexecutivesnet.com/index.aspx

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2010 John Larkin

  1. 1. 2010 Food Shippers of America Conference Equity Research Some Seasonal Strengthening Has Occurred In The Freight Markets; However, The Road To Recovery Will Be Gradual John Larkin, CFA Stifel, Nicolaus & Company, Incorporated (443) 224-1315 jglarkin@stifel.comImages courtesy of KNX, SAIA, FDX and BNSF February 23, 2010 All relevant disclosures and certifications can be found on pages 46-47 of this report. Transportation & LogisticsFreight Transportation & Logistics Group CONFIDENTIAL 1 1
  2. 2. 2010 Food Shippers of America Conference Equity Research Outline I. The Economy Is Gradually Recovering: Sustainability Is An Issue II. Freight Volumes Are Reflecting The Economic Recovery III. Each Freight Transportation Sector Is Driven By Unique Factors IV. Short Term Predictions – “Not Out Of The Woods Yet” V. Longer Term Predictions – “The Future Will Be Bright” Transportation & LogisticsFreight Transportation & Logistics Group CONFIDENTIAL 2 2
  3. 3. Macroeconomic Indicators Remain Relatively Soft Equity Research Real Consumer Spending “Cratered” in 2008 But Hasn‟t Improved Much Real Retail Sales Increased 2.4% Y/Y in December; It Appears That The Worst May Be Behind Us CPI-Adjusted Retail Sales Y/Y% Change 190 8.0% 6.0% 180 4.0% Decline From Monthly Retail Sales ($ bn) 2.0% Peak Y/Y % Change 170 0.0% -9.5% -2.0% 160 -4.0% -6.0% 150 -8.0% -10.0% 140 -12.0% Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09Chart displays seasonally adjusted dataSource: St. Louis Federal Reserve Bank, Company data Transportation & Logistics Freight Transportation & Logistics Group CONFIDENTIAL 3 3
  4. 4. U.S. Consumers Are Saving More to Offset Real Estate and Investment Portfolio Losses Equity Research Increased Savings = Reduced Consumption; Is This a Permanent Change in Behavior? U.S. Personal Savings ($ in Billions) U.S. Personal Savings Rate (%) 1952 - 2009 1952 - 2009 DPI Less Personal Outlays - Inflation Adj. to 1952 ($ BN) 80 15.0% 70 Personal Savings / Disposable Inc. (%) 60 10.0% 50 40 30 5.0% 20 10 0 0.0% 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 Monthly U.S. Personal Savings ($ in Billions) Monthly U.S. Personal Savings Rate (%) Figures Seasonally Adjusted at Annual Rates Figures Seasonally Adjusted at Annual Rates Jan. 2007 - Dec. 2009 Jan. 2007 - Dec. 2009 850 7.0% 750 DPI Less Personal Outlays ($ BN) Personal Savings / Disposable Inc. (%) 6.0% 650 5.0% 550 4.0% 450 350 3.0% 250 2.0% 150 1.0% 50 0.0% (50) -1.0% Aug-07 Aug-08 Aug-09 Apr-07 Apr-08 Apr-09 May-07 May-08 May-09 Mar-07 Mar-08 Feb-07 Nov-07 Nov-08 Mar-09 Nov-09 Jul-07 Sep-07 Feb-08 Jul-08 Sep-08 Feb-09 Jul-09 Sep-09 Jan-07 Jun-07 Dec-07 Oct-07 Jan-08 Jun-08 Dec-08 Dec-09 Oct-08 Jan-09 Jun-09 Oct-09 Apr-07 Aug-07 Apr-08 Aug-08 Apr-09 Aug-09 Feb-07 May-07 Mar-07 Jul-07 Sep-07 Nov-07 Feb-08 May-08 May-09 Mar-08 Jul-08 Sep-08 Nov-08 Feb-09 Mar-09 Jul-09 Sep-09 Nov-09 Jan-07 Jun-07 Oct-07 Jan-08 Dec-07 Jun-08 Oct-08 Jan-09 Dec-08 Jun-09 Oct-09 Dec-09*DPI less Personal Outlays in May 2008 and Personal Saving as a Percentage of Personal Disposable Income in May 2008 are not comparable due to the Economic Stimulus Act of 2008, when the Government issued rebate payments of $1.9 billion in April, $48.1billion in May, and $27.9 billion in June and $13.7 billion in July. The stimulus package effectively reduced the level of personal taxes, which are part of the calculations for Savings in dollars and percentage savings rate.Personal savings is disposable personal income net of personal outlaysSource: Bureau of Economic Analysis Transportation & Logistics Freight Transportation & Logistics Group CONFIDENTIAL 4 4
  5. 5. ISM Index Suggests Manufacturing Growth Equity Research ISM Index in January Suggested Growth in the Manufacturing Economy For the Sixth Consecutive Time Since July ‟09; Export Growth Had Been Masking Domestic Manufacturing Weakness For Most of „08 65.0 60.0 55.0 ISM Index 50.0 Jan-10 45.0 58.4 40.0 35.0 30.0 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10ISM Index values over 50 indicate industrial growth while ISM Index values below 50 indicate industrial contraction.Source: Institute for Supply Management Transportation & LogisticsFreight Transportation & Logistics Group CONFIDENTIAL 5 5
  6. 6. Industrial Production Recovering Slowly Equity Research Tonnage-Weighted Industrial Production Has Been Slightly Weaker Than Value-Weighted Industrial Production Due to Steep Declines in Heavy Building/Construction Materials and Automotive Volumes and Emphasis Given to More Concentrated/Compact Products With Smaller Packaging U.S. Industrial Production Index Tonnage-Weighted Industrial Production Index Jan. 1999- Jan. 2010 Nov. 1998- Nov. 2009 Industrial Production Y/Y% Change Tonnage Weighted IP Index Y/Y % Change 110.0 10.0% 120.0 10.0% 100.0 5.0% 100.0 5.0%Industrial Production Index Tonnage-Weighted IP Index 90.0 0.0% 80.0 0.0% Y/Y % Change Y/Y % Change 80.0 -5.0% 60.0 -5.0% 70.0 40.0 -10.0% -10.0% 60.0 20.0 -15.0% 50.0 -15.0% 0.0 -20.0% 40.0 -20.0% Nov-98 Nov-99 Nov-00 Nov-01 Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Data in both graphs are adjusted for PPI, excluding food and energy Source: St. Louis Federal Reserve, American Trucking Associations Transportation & Logistics Freight Transportation & Logistics Group CONFIDENTIAL 6 6
  7. 7. Credit Managers Index Somewhat Encouraging Equity Research Recent Credit Managers Index (CMI) Data Suggests Commercial Business Transactions Have Expanded in Each of the Past Three Months; December ‟09 CMI Highest Since January „08 60 Combined Manufacturing and Services CMI (SA Index) 55 50 Dec-09 52.9 45 40 4 9 4 9 4 5 8 9 8 07 5 6 07 06 07 l- 0 l- 0 -0 -0 -0 -0 r- 0 -0 -0 -0 -0 n- n- g- v- b p b c c t ar ay Ju Ju Oc Ap De De Fe Se Fe Ja Ju Au No M MCMI Index values over 50 indicate expansion while CMI Index values below 50 indicate contraction.Source: National Association of Credit Management Transportation & Logistics Freight Transportation & Logistics Group CONFIDENTIAL 7 7
  8. 8. Manufacturing Orders Showing Growth Equity Research New Manufacturing Orders Weakened Dramatically Through the End of 2008; 2009 Comparisons Rebounded, With July Through December Showing Increasing Y/Y Growth; January Growth Pulled Back Slightly From December; Is This Growth Sustainable? Manufacturing New Orders Jan. 1997 - Jan. 2010 New Orders (SA) Y/Y % Change 75 210% 180% 65 150% ISM New Orders Index 55 120% Y/Y % Change 90% Jan-10: 45 98.5% 60% 35 30% 0% 25 -30% 15 -60% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Source: Institute for Supply Management Transportation & Logistics Freight Transportation & Logistics Group CONFIDENTIAL 8 8
  9. 9. Manufacturing Inventories Growing While Customers’ Inventories Continue Decline Equity Research Was 2H09 Strength Tied to Inventory Replenishment at the Supplier and Manufacturing Levels? Manufacturing Supplier Deliveries Manufacturing Inventories Jan. 1997 - Jan. 2010 Jan. 1997 - Jan. 2010 Supplier Deliveries (SA) Y/Y % Change Manufacturers Inventories (SA) Y/Y % Change 70 40% 70 40% 30% ISM Manufacturing Inventories Index 20% 60 20% ISM Supplier Deliveries Index 60 Y/Y % Change 10% Y/Y % Change 0% 50 0% -10% 50 -20% 40 -20% Jan. 32.7% Jan. 24.0% -30% 40 -40% 30 -40% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Manufacturing Customers Inventories Retail Inventories Jan. 1998 - Jan. 2010 Jan. 1996- Dec. 2009 Customers Inventories (SA) Y/Y % Change 65 30% Retail Inventories (SA) Y/Y % Change ISM Manufacturing Customers Inventories Index 550 10% 60 20% Retail Inventories (SA in 000s) 10% 500 5% 55 Y/Y % Change Y/Y % Change 0% 50 450 0% -10% 45 -20% 400 -5% 40 -30% 35 Jan. -42.3% 350 Dec. -10.9% -10% -40% 30 -50% 300 -15% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Manufacturing Data through January 2010, Retail Inventories through December 2009Source for top two and bottom left graphs: Institute for Supply Management; Source for bottom right graph: U.S. Census Bureau Transportation & Logistics Freight Transportation & Logistics Group CONFIDENTIAL 9 9
  10. 10. IS Ratio Spike Was Due to Dramatic Downturn in Sales Equity Research Inventory Levels Appear to Have Adjusted to “New Normal” Demand Levels; Did Manufacturers Restock Too Early? Manufacturers Inventories, total ($bn) Inventory/Sales Ratio Wholesale Inventories, total ($bn) Inventory/Sales Ratio 600 1.5 500 1.4 Manufacturers Inventories ($bn) 1.45 Wholesale Inventories ($bn) 1.35 550 Dec-09 I/S Ratio: 450 Dec-09 I/S Ratio: 1.4 1.3 1.29 1.35 1.12 I/S Ratio 400 I/S Ratio 500 1.25 1.3 450 350 1.2 1.25 1.15 1.2 400 300 1.15 1.1 350 1.1 250 1.05 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Retail Inventories, total ($bn) Inventory/Sales Ratio Business Inventories, total ($bn) Inventory/Sales Ratio 550 1.7 1,600 1.50 Dec-09 I/S Ratio: 1.65 Business Inventories ($bn) Dec-09 I/S Ratio: 1,500 1.45Retail Inventories ($bn) 500 1.37 1.6 1.26 1,400 1.40 I/S Ratio I/S Ratio 1.55 450 1,300 1.35 1.5 1,200 1.30 1.45 400 1.4 1,100 1.25 350 1.35 1,000 1.20 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09Source: U.S. Census Bureau Transportation & Logistics Freight Transportation & Logistics Group CONFIDENTIAL 1010
  11. 11. Existing Housing Sales Showing Nice Rebound; New Home Sales Remain Anemic Equity Research Freight Tied to Residential Construction Remains Relatively Weak; Strength in Existing Home Sales Has Generated Some Incremental Traffic New Home Sales Remain Negative Even as Comps Existing Home Sales Reach Highest Level Since Get Progressively Easier February 2007 New Home Sales Y/Y% Change Existing Home Sales Y/Y% Change 1,500 40.0% 7,500 50.0% New Home Sales (Annual rate in 000s) Existing Home Sales (Annual Rate in 30.0% 7,000 40.0% 20.0% 1,200 Y/Y % Change 10.0% 30.0% 6,500 Y/Y % Change 0.0% 20.0% 6,000 000s) 900 -10.0% 10.0% -20.0% 5,500 0.0% -30.0% 5,000 600 -10.0% -40.0% 4,500 -20.0% -50.0% 300 -60.0% 4,000 5/31/2005 -30.0% 10/31/2005 3/31/2006 8/31/2006 1/31/2007 6/30/2007 11/30/2007 4/30/2008 9/30/2008 2/28/2009 7/30/2009 12/30/2009 5/31/2005 10/31/2005 3/31/2006 8/31/2006 1/31/2007 6/30/2007 11/30/2007 4/30/2008 9/30/2008 2/28/2009 7/30/2009 12/30/2009Left Graph current through December 2009, Right Graph current through December 2009Sources: U.S. Census Bureau, National Association of Realtors Transportation & Logistics Freight Transportation & Logistics Group CONFIDENTIAL 1111
  12. 12. A Bottom Seen in New Home Construction? Equity Research On an Absolute Basis, January Building Permits Took a Small Step Down From December; Many Local Markets Still Appear Overbuilt; Lack of Credit Remains a Big Issue; Extended Tax Credit For New Home Buyers Has Been Stimulating Activity Monthly Housing Starts Fell 17.2% Year-Over-Year Building Permits fell 22.3% Year-Over-Year in January; A Bottom Seen? in January Housing Starts 6 mo. Moving Avg. Y/Y% change New Building Permits 6 Month Moving Avg. %Y/Y change 2,350 20.0% New Building Permits (Seasonally Adjusted 2,400 20.0% 6 Mo. Moving Avg. Y/Y % Change 6 Month Moving Avg. Y/Y % Change New Housing Starts (Seasonally Adjusted in 2,100 10.0% 2,150 10.0% 1,850 0.0% 1,900 0.0% in Thousands) 1,600 -10.0% 1,650 -10.0% Thousands) 1,350 -20.0% 1,400 -20.0% 1,100 -30.0% 1,150 -30.0% 850 -40.0% 900 -40.0% 600 -50.0% 650 -50.0% 350 -60.0% 400 -60.0% Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-10 Starts Jan-10 Permits 591,000 621,000 Fall From Peak Fall From PeakData through January 2010 -73.9% -72.6%Source for all graphs: U.S. Dept. of Commerce Transportation & Logistics Freight Transportation & Logistics Group CONFIDENTIAL 1212

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