The U.S. truckload market is vast and fragmented, making it hard to predict. The Coyote Curve is a proprietary forecasting model that detects patterns, making it easier to project its ups and downs. Learn about the model and the accuracy of early 2019's forecast: https://resources.coyote.com/coyote-curve

1. Presented by:
Chris Pickett, Chief Strategy Officer
U.S. Truckload Market Forecast
Q2 2019
W E B I N A R

2. At Coyote
• Chief Strategy Officer since 2006.
• Oversees North American Sales, Marketing, Operations, Supply Chain
Engineering, Data Science, and Pricing Strategy.
Prior Experience
• Various strategy development and consulting roles at Adjoined Consulting
(now Capgemini), Agile Software Corp. (now Oracle), Electron Economy
(now Viewlocity) and Andersen Consulting (now Accenture).
• Architected, implemented and managed diverse supply chain management
projects for a variety of global market leaders across multiple industry
sectors.
Education
• B.S. in Industrial & Systems Engineering from Virginia Tech
• Masters of Engineering in Logistics from MIT
• MBA from Georgia Tech
ABOUT THE PRESENTER
Chris Pickett, CSO

3. COYOTE CURVE 101Agenda
Market Dynamics
• Truckload Market Structure
• Three Primary Market Cycles
Explaining the Coyote Curve
• Indices and Indicators
• Driving Forces
Market Forecast
• Recent History
• Current State vs. Projection
• Q2 and 2019 Outlook
Additional Market Resources
Q2 MARKET UPDATE

4. The U.S. truckload market is:
• Vast: Over $700B* in annual shipper spend
• Fragmented: hundreds of thousands of
market participants
• Dynamic: low barriers to entry and exit
TRUCKLOAD MARKET
DYNAMICS +580K*
For-hire common carriers
Top ten control <15% market
share
Supply
97%
Operate less than 20 trucks
91%
Operate less than 6 trucks
Demand
Just as fragmented as
supply.
Consists of hundreds of
thousands:
• Manufacturers
• Wholesalers
• Importers
• Exporters
• Retailers
Each with their own agenda
that constantly changes in
response to their own
customers’ demands.
*Source: American Trucking Association

5. Cycle 1: Seasonal Demand
Cycle 2: Annual Procurement
Cycle 3: Market Capacity
THE FORCES AT PLAY
1

6. Cycle 1: Seasonal Demand Dislocations
Cycle 2: Annual Procurement Cycle
Cycle 3: Market Capacity Cycle
THE FORCES AT PLAY
2

7. THE FORCES AT PLAY
3
• Coyote proprietary index
• Proxy for spot market rate activity
• Measures year-over-year rate of
change, on a quarterly basis, in TL
base spot market rates ex-fuel

8. • Cass is a 3rd-party
aggregator for freight
billables
• Proxy for contract TL
market rate activity
• Measures year-over-
year rate of change, on
a quarterly basis, in
base Cass rates ex-fuel
• Tends to trail the sport
market curve Curve by
3-6 months
THE CASS TL LINEHAUL INDEX

9. ATA TRUCKLOAD DEMAND
Truckload Demand
American Trucking Associations
Industrial Production
Federal Reserve Board
Imports
Bureau of Economic Analysis
Consumption
Bureau of Economic Analysis

10. DOE DIESEL RATES
*Source: Department of Energy

11. THE COYOTE CURVE: STANDARD VIEW
+ Demand (vol)
+ Carrier costs (fuel/labor)
= Supply scarcity
Driving spot rates up
- Demand (vol)
- Carrier costs (fuel/labor)
= Oversupply
Driving spot rates down
Coyote Curve Cass Index ATA TL Volume DOE Diesel Index
(secondary axis)

12. WHAT DRIVES THE MARKET
Supply Indicators
• DOE Diesel Rates
• NA Class 8 Tractor Orders
• Industry News & Speculation
Demand Indicators
• ATA Truckload Demand Index
• Industrial Production & Imports
• Consumer Spending
We use these economic indicators and external indices to inform our forecast.

13. THE COYOTE CURVE: CURRENT STATE
Coyote Curve Cass Index ATA TL Volume DOE Diesel Index
(secondary axis)

14. WHAT DROVE RECORD DEFLATION
The market deflated further and faster
than we originally anticipated.
There are three factors we believe are driving it.
1. Overblown fears surrounding the ELD Mandate.

15. WHAT DROVE RECORD DEFLATION
Source: ACT Research NA Class 8 Tractor Orders
Coyote Curve (left axis)
Class 8 Tractor Orders (right axis)
1. Overblown fears surrounding the
ELD Mandate.
2. Record capacity binge fueled by
tax reform.

16. WHAT DROVE RECORD DEFLATION
1. Overblown fears surrounding the
ELD Mandate.
2. Record capacity binge fueled by
tax reform.
3. Weaker TL volume demand
despite a relatively healthy
economy
Truckload Demand
American Trucking Associations
Consumption
Bureau of Economic Analysis
Imports
Bureau of Economic Analysis
Industrial Production
Federal Reserve Board

17. THE COYOTE CURVE: FORECAST
Coyote Curve Coyote Curve ForecastCass Index Cass Index Forecast

18. • You probably won’t exceed your 2019 freight budget
due to unplanned spot market exposure like many did
in 2018… some by mid-year.
• The spot market could be a source of opportunity…
rather than pain and disappointment.
• Anticipate record primary tender acceptance.
• Seasonal demand dislocations (and hurricanes) will
probably have less of an effect on overall spot market
rates.
• Stick with Shipper of Choice and Carrier of Choice
strategies and play the long game.
• Don’t panic (or run a victory lap) – this too shall pass
GENERAL INSIGHTS FOR 2019

19. Coyote Curve White Papers
• Part 1: Understanding the Three Market Cycles
• Part 2: The Coyote Curve Explained
• Part 3: Q2 Market Update
Deeper-Dive into Produce Season
• Shipper’s Guide to Produce season
• 5 Need-to-Knows About Produce Season
infographic
Additional articles and helpful market insights
ADDITONAL INSIGHTS
Stay tuned. We’ll be back in Q3.
https://resources.coyote.com/

20. Thank You
Chris Pickett, Chief Strategy Officer
chris.pickett@coyote.com