1. Transportation Industry: Trends
Impacting Truckload and Less
Than Truckload Carriers
MAY 2012
RKJ Partners, LLC is an I. OVERVIEW
Atlanta, Georgia based
RKJ Partners, LLC (“RKJ”) is pleased to present our report entitled:
investment banking firm
Transportation Industry: Trends Impacting Truckload (“TL”) and Less-Than-
designed to specifically assist
Truckload (“LTL”) Carriers. Over the near term, assuming the US economy
lower middle-market growth
continues to recover, TL and LTL carriers are expected to continue generating
companies in executing
attractive financials results. Several key data points allow RKJ to possess an
transactions between $2MM
optimistic view of the TL and LTL industries, namely:
to $75MM.
❖ RE-EMERGENCE OF DEDICATED CONTRACT BUSINESS: Dedicated trucking
operations are booming! As the overall US economy improves, shippers
IN THIS ISSUE: are increasingly choosing dedicated as a way to guarantee capacity while
simultaneously assuring top-notch service. Dedicated is consistently
OVERVIEW 1 growing at near double-digit percentage rates. Industry experts estimate
that dedicated contract carriage will hit $11.5 billion in revenue over the
DEDICATED CONTRACT BUSINESS course of 2012, up 9% from last year when Dedicated grew 10.6%.
IS BACK! 1
FUEL SURCHARGES, SPOT RATES
❖ SPOT RATES, CONTRACT RATES & FUEL SURCHARGES REMAIN ATTRACTIVE: Between
March 2011 and April 2012, spot rates for dry van, reefer and flatbed
& CONTRACT RATE TRENDS 3
truckload carrier remained virtually unchanged. However, over the
NEW TRUCK ORDERS 4
aforementioned period, contract rates for each carrier type materially
increased. Given the rise in diesel fuel prices, fuel surcharges also
ABOUT RKJ PARTNERS, LLC 5
experienced material increases.
SELECT TRANSPORTATION INDUSTRY ❖ NEW TRUCK ORDERS FLAT: March 2012 new orders and net orders hit
TRANSACTION EXPERIENCE 6 22,038 units and 20,025 units, respectively, according to ACT Research
(“ACT”). ACT previously forecasted that its preliminary net orders for March
2012 would total approximately 20,000 units. February 2012 net orders
totaled 22,366 units. The lack of significant new truck orders will
exaggerate the capacity issue currently experienced by shippers over the
CYRIL JONES near term. As a result of the capacity imbalance, TL and LTL carriers
Managing Partner should realize increases in line haul rates.
cyril@rkjpartners.com
II. DEDICATED CONTRACT BUSINESS IS BACK!
GREGORY FICKLIN With capacity already tightening and increasing federal regulations threatening
Managing Partner to exacerbate the driver shortage issue, dedicated trucking should continue to
greg@rkjpartners.com grow at double-digit percentage rates.
Dedicated trucking operations are booming! As the overall economy improves,
shippers are increasingly choosing dedicated as a way to guarantee capacity
while simultaneously assuring top-notch service. Dedicated is consistently
growing at near double-digit percentage rates. Industry experts estimate that
RKJ PARTNERS, LLC dedicated contract services will hit $11.5 billion in revenue over the course of
4514 Chamblee Dunwoody Rd. 2012, up 9% from last year when it grew 10.6%.
Suite 170
Atlanta, Georgia 30338 As the name implies, dedicated trucking involves carriers “dedicating” a certain
p. 404.963.8592 percentage of its fleets to customers who can secure capacity through long-
f. 404.920.2159 term contracts. This guarantees capacity for shippers, provides fleets with a
www.rkjpartners.com consistent base of customers that do not “churn” as much as a typical
customer, and guarantees drivers a predictable number of miles along very

2. familiar routes that they may drive every day. Dedicated is a win-win-win for shippers, trucking companies, and
receivers.
The biggest names in dedicated contract services are also among the biggest names in the trucking industry. J.B.
Hunt’s dedicated division generated revenue of approximately $907 million in 2010. That was nearly a 20% jump
over the previous years. Werner Enterprises’ dedicated business generated revenue of $744 million in 2010,
representing a 14.5% increase. In total, the top 10 dedicated carriers generated $5.7 billion in business in 2010,
representing a 12.3% year-over-year increase.
This re-emergence in dedicated trucking actually began in 2008 and 2009 when the economy declined and a many
one-way truckload companies were forced out of business. The industry was comprised of significant idle capacity.
Then, about three years ago, asset-based companies with idle trucks began to move into dedicated one- and two-stop
deliveries to grow accounts. The multi-year contracts yielded as much as 6% to 12% profit margins. With capacity
tightening and increasing federal regulations threatening to exacerbate the driver shortage, dedicated trucking
continues to be a growing option for many shippers. Dedicated business allows carriers to maximize their drivers’
hours of service if you can work with multiple customers to create a continuous loop of freight. If properly routed,
every one’s costs are reduced.
There are three basis market factors driving the growth in dedicated business for carriers: drivers, regulations, and
service levels.
❖ Factor #1: Drivers: The driver shortage in TL and LTL is well documented. A combination of demographics,
increased scrutiny (including mandatory drug and alcohol testing), and the industry’s inability to market itself to
minorities and women has meant that jobs that can pay as much as $60,000 annually are going unfilled—even in
a time of 8.5% unemployment. However, it is important to understand that driving a truck is a challenging job. A
normal TL and LTL driver with a 1,200-mile length of haul can be away from home as much as three weeks at a
time. Dedicated truck driving is totally different. Because the average length of haul is much shorter, drivers can
be home nearly every night or every other night. The “loops” tend to be predictable, breeding familiarity with dock
personnel and customers. In addition, because drivers are paid by the mile, dedicated offers a guaranteed base
of pay that is often higher than that of their long-haul brethren. Lastly, truckers are doing everything they can to
retain drivers, and dedicated operations certainly help.
❖ Factor #2: Regulation: Trucking is clearly in Washington’s regulatory sights. The new Compliance, Safety,
Accountability (“CSA”) standards threaten to sideline as many as 150,000 of trucking’s 3-million long-haul
operators when fully implemented. On top of CSA, hours of service (“HOS”) regulations are being tweaked so that
drivers may be forced into more mandatory rest periods. In addition, there are tighter background checks,
mandatory drug and alcohol screening, and other increased scrutiny of drivers in the wake of the Patriot Act and
other responses to 9/11. The proposed HOS changes could have a drastic effect on shippers—unless, of course,
capacity is locked in through long-term dedicated contracts.
❖ Factor #3: Service, service, service: Dedicated business can take nearly every imaginable form. There can be
team operations that emphasize transit time speed. Dedicated business can provide ultra-high levels of service
with ancillary services such as store set-up and takeaway of old merchandise. There can also be regional “loops”
that carry the freight of two or more shippers who may have operations in the same area that can be linked in
pickups and deliveries. Loops provide both shippers with very high levels of service, while reducing carriers’
empty miles. Certain industries—automotive and retail are two—lend themselves more to dedicated business.
The biggest opportunity is blending routes of two or more customers to create a continuous “triangulation” of
business. Shippers are increasingly locating their distribution centers to take advantage of “continuous loops”
that dedicated regional service provides. Dedicated is ideal for any business with specialized equipment
requirements and multiple or complex transportation and distribution challenges. Whether shippers need to
deliver perishable products or high-value freight that requires high security, dedicated helps lower transportation
costs and increase efficiency.
The Future is Bright
By all accounts, top trucking officials agree that dedicated trucking will continue to outpace overall growth in the
industry, at least in the near term. What’s driving dedicated trucking is the fear of not having capacity coupled with
uncertainty of rates. Shippers will certainly benefit from capacity guarantees and rate stability, but there is a
downside. If the economy tanks, shippers will be stuck with a contract they need to honor, and they will not be able to
take advantage of lower spot market pricing.
2 RKJ PARTNERS, LLC: TRANSPORTATION INDUSTRY TRENDS IMPACTING TL AND LTL CARRIERS

3. III. FUEL SURCHARGE, SPOT RATE & CONTRACT RATE TRENDS
Between April 2011 and April 2012, spot rates for dry van, reefer and flatbed truckload carrier remained virtually
unchanged. However, over the aforementioned period, contract rates for each carrier type materially increased.
Given the rise in diesel fuel prices, fuel surcharges also experienced material increases.
DRY VAN RATES
Between April 2011 and April 2012, average dry van spot rate slightly declined from $1.32 per mile to $1.30 per
mile, representing a 1.5% decline. Between March 2011 and March 2012, average contract rate experienced a
material increase from $1.44 per mile to $1.56 per mile, representing an 8.3% increase. Over the same period, the
average fuel surcharge increased from $0.42 per mile to $0.52 per mile, representing a 23.8% increase.
Exhibit #1: Dry Van (TL Rates): Fuel Surcharge, Spot Rate & Contracts Rate – March 2011 thru April 2012
$1.80
$1.56
$1.60 $1.44
$1.40
$1.20
$1.32 $1.30
$1.00
$0.80
$0.60
$0.40
$0.52
$0.42
$0.20
$-
Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12
FSC Spot Contract
Source: DAT TransCore
FLATBED RATES
Between March 2011 and April 2012, average flatbed spot rate remained virtually flat at $1.63 per mile. Between
March 2011 and March 2012, average contract rate experienced a material increase from $1.69 per mile to $1.76
per mile, representing a 4.1% increase. Average fuel surcharge over the same period increased from $0.52 per mile
to $0.56 per mile, representing a 7.7% increase.
Exhibit #2: Flatbed (TL Rates): Fuel Surcharge Rates, Spot Rates & Contracts Rates – March 2011 thru April 2012
$2.00
$1.69 $1.76
$1.80
$1.60
$1.63 $1.63
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.52 $0.56
$0.20
$-
Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12
FSC Spot Contract
Source: DAT TransCore
3 RKJ PARTNERS, LLC: TRANSPORTATION INDUSTRY TRENDS IMPACTING TL AND LTL CARRIERS

4. REEFER RATES
Between March 2011 and April 2012, average reefer spot rate per mile remained flat at $1.45 per mile. However,
between April 2011 and March 2012, average contract rates experienced a material increase from $1.55 per mile to
$1.63 per mile, representing a 5.2% increase. Average fuel surcharges over the aforementioned period, increased
from $0.50 per mile to $0.54 per mile, representing an 8.0% increase.
Exhibit #3: Reefer (TL Rates): Fuel Surcharge Rates, Spot Rates & Contracts Rates – March 2011 thru April 2012
$1.80
$1.55 $1.63
$1.60
$1.40
$1.45 $1.45
$1.20
$1.00
$0.80
$0.60
$0.40
$0.54
$0.50
$0.20
$-
Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12
FSC Spot Contract
Source: DAT TransCore
Given the seasonality in the trucking business, TL and LTL generate a significant portion of their annual revenue in
the second and third quarters of the calendar year. Given this annual trend, coupled with the current capacity
shortage and the re-emergence of dedicated contract business, carriers should continue to experience rate increases
over the near term.
IV. NEW TRUCK ORDERS
ACT Research, a provider of data and analysis for trucks and other commercial vehicles, reported Class 8 new and net
orders in March 2012 were the lowest they have been since July 2011.
March 2012 new orders and net orders hit 22,038 units and 20,025 units, respectively, according to ACT. ACT
previously forecasted that its preliminary net orders for March would come in around 20,000 units. February net
orders hit 22,366 units. When the preliminary orders were initially released, ACT said that the preliminary Class 8
orders were below expectations in what is typically one of the seasonally strongest months of the year. On a
seasonally-adjusted basis, Class 8 orders are at its lowest point since hitting 18,400 units in September 2010.
For many truck drivers, the gap between new and used prices remains particularly large. Given data points presented
above, plus rising diesel prices through Q1 2012, it is easy to understand why the industry has softened. However,
RKJ believes a continuation of reasonable freight growth, strong trucker profits, and healthy used truck prices will
push demand higher once the current period of uncertainty has passed.
4 RKJ PARTNERS, LLC: TRANSPORTATION INDUSTRY TRENDS IMPACTING TL AND LTL CARRIERS

5. ABOUT RKJ PARTNERS, LLC (WWW.RKJPARTNERS.COM)
RKJ Partners is an established advisor to leading lower middle-market growth companies. We provide our clients with
experienced-based solutions and unbiased advice. Our comprehensive array of strategic advisory and execution
capabilities allows us to meet the needs of our clients and provide an outstanding level of service in connection with a
variety of transaction processes, including:
❖ CAPITAL ADVISORY: RKJ possesses substantial expertise in assisting lower middle-market clients raise capital to
fund growth strategies. Whether the capital source is senior debt, mezzanine/subordinated debt, private equity,
or venture capital, RKJ has both extensive and relevant relationships within the capital community to enable the
deployment of optimal solutions for our clients.
❖ MERGERS & ACQUISITIONS: RKJ serves as a trusted advisor in executing merger and acquisition transactions for
lower middle-market clients. In addition to our significant investment banking transactional experience, RKJ’s
bankers have owned businesses and have served in interim CFO roles for clients. As a result of our experiences
as business owners and senior level managers, RKJ’s bankers are able to bring a unique perspective to the
mergers and acquisitions process. RKJ’s mergers and acquisitions services include:
 Buy-side and Sell-side Advisory
 Divestitures
 Leveraged & Management Buyouts
❖ STRATEGIC ADVISORY: RKJ provides financial advisory services to owners, management, shareholders and their
boards to assist in the evaluation strategic alternatives and options for extending and/or maximizing shareholder
value. RKJ’s advisory services include:
 Business Valuations
 Capital Structuring & Planning
 Negotiating Joint Ventures
 Strategic Business Development
PLEASE REFER ANY QUESTIONS OR COMMENTS TO:
CYRIL JONES GREGORY FICKLIN
MANAGING PARTNER MANAGING PARTNER
RKJ PARTNERS, LLC RKJ PARTNERS, LLC
4514 CHAMBLEE DUNWOODY ROAD, SUITE 170 4514 CHAMBLEE DUNWOODY ROAD, SUITE 170
ATLANTA, GEORGIA 30338 ATLANTA, GEORGIA 30338
P.404.963.8592 P.404.509.0222
CYRIL@RKJPARTNERS.COM GREG@RKJPARTNERS.COM
WWW.RKJPARTNERS.COM WWW.RKJPARTNERS.COM
5 RKJ PARTNERS, LLC: TRANSPORTATION INDUSTRY TRENDS IMPACTING TL AND LTL CARRIERS

6. SELECT TRANSPORTATION INDUSTRY TRANSACTION EXPERIENCE
M e r ge r s & A cq ui si ti o n Tr a nsacti o ns
Pr o j e ct Se a si d e B uy - Si d e M&A Advising client on acquisition of truckload asset-based carrier. Specific role
(Expected close - June 2012) and responsibilities included: sourcing and selecting target(s); negotiating letter
of intent (LOI); drafting offering memorandum; developing financial projection
model; sourcing and negotiating terms with financing partners; overseeing due
diligence process including partnering with legal/accounting advisors; and
managing closing process.
Pr o j e ct Spa r ta n Se l l -Si d e M&A Advising client on sale of freight brokerage company. Specific role and
(Expected close - July 2012) responsibilities included: sourcing and selecting buyer(s); drafting offering
memorandum; developing financial projection model; sourcing and negotiating
terms with financing partners; overseeing due diligence process including
partnering with legal/accounting advisors; and managing closing process.
A r ca d i a Ca pi tal Gr o up B uy - Si d e M&A Advised Arcadia Capital Group on the acquisition of DJL Express, Inc. Specific
role and responsibilities included: sourcing and selecting target(s); negotiating
letter of intent (LOI); developing post-acquisition growth strategy.
Jo ne s + I ngr a m Lo gi sti cs, Inc. Se l l -Si d e M&A Advised Jones + Ingram Logistics, Inc. on the sale of the company to Orbis
Transportation, LLC. Specific role and responsibilities included: sourcing and
selecting buyer; negotiating letter of intent (LOI); managing due
diligence/transition plan; and developing post-acquisition growth strategy.
Str a te gi c A dvi so r y Engage me nts
A l l i e d Lo gi sti cs, I nc. Ad v i so r y Evaluated three (3) acquisition targets in the freight brokerage industry.
Specific role and responsibilities included: sourcing and selecting target(s);
developing preliminary financial projection models for each target; and
preliminary negotiations with targets.
B r i ck Tr ansp o r ta ti o n, LLC Ad v i so r y Evaluated acquisition target - FedEx carrier. Specific role and responsibilities
included: negotiating letter of intent (LOI); evaluation of financials and financial
projection model; and sourcing and preliminary negotiating of terms with
financing partners.
CR ST I nte r na ti o nal , I nc. Ad v i so r y Evaluated multiple acquisition targets - west-coast based freight brokerage
companies. Specific role and responsibilities included: sourcing, selecting and
presenting target(s).
K &L Tr uck i ng, Inc Ad v i so r y Presented "roll-up" strategy to senior management team. Specific role and
responsibilities included: sourcing, selecting and presenting potential target(s);
and evaluating preliminary structure for each potential target.
M o nr o e Lo gi sti cs, LLC Ad v i so r y Evaluated three (3) separate acquisition targets - small package delivery
companies. Specific role and responsibilities included: developing financial
model for each potential target; and leading preliminary negotiations with each
potential target.
Pa ul way Gr o up , LLC Ad v i so r y Evaluated three (3) acquisition targets - logistics related software company;
asset based carrier & freight brokerage company. Specific role and
responsibilities included: developing financial model for each potential target;
and leading preliminary negotiations with each potential target.
TSE Lo gi sti cs, I nc. Ad v i so r y Evaluated cross-border (Canada) acquisition target - asset based carrier.
Specific role and responsibilities included: negotiating letter of intent (LOI);
developing financial projection model; and preliminary negotiations with target.
Ca pi ta l R a i si ng Engage me nts
Pr o j e ct Pe p p e r co r n Se ni o r De b t R e cap i tal i z a ti o n Advising client on recapitalizing their balance sheet. Specific role and
(Expected close - May 2012) responsibilities included: sourcing and selecting senior lender; assisting lender
with preliminary structure; drafting information memorandum; developing
financial projection model; and managing closing process.
A l l i e d Lo gi sti cs, I nc. Eq ui ty Ca pi tal Ra i se Advised Allied Logistics in its equity capital raise. Specific role and
responsibilities included: evaluating preliminary term sheet, identifying
appropriate legal counsel to negotiate letter of intent (LOI); and developing post-
acquisition growth strategy.
Pi l o t Tr a ve l Ce nte r s Se ni o r De b t R e cap i tal i z a ti o n Assisted Pilot Travel Center in its senior debt capital raise. Specific role and
responsibilities included: developing financial projection model; and reviewing
preliminary loan documents.
6 RKJ PARTNERS, LLC: TRANSPORTATION INDUSTRY TRENDS IMPACTING TL AND LTL CARRIERS