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May 12, 2014

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66 THE JOURNAL OF COMMERCE www.joc.com MAY 12.2014 QUARTERLY SHIPPER OUTLOOK SPECIAL REPORT JOC: What are your members seeing in terms of the economy and what are their expecta- tions through 2015? C A R LT O N: I think there is a general small smile on their faces. It's not elation. Things are getting better. It's been slow. It's been slow from Day 1. The climb out of the deep hole from the Great Reces- sion has been arduous, but we're getting there. There are defi nitely signs of eco- nomic growth, and that's all positive. They would love to see a big adrenaline shot hit the system (but that) doesn't seem to be in the offi ng. J O C: The American Trucking Associations' tonnage fi gures for last year were extraordi- nary. ATA Economist Bob Costello believes a lot of that came from energy production, auto- motive and to some extent housing supplies, as that market began to recover. Is it more of an industrial freight surge, as opposed to a broader consumer freight surge? C ARLTON: It seems to be. A couple of our members have private truck fl eets to serve their own company. I've heard from more than one of them, saying, "Man, we can't keep drivers. They're all heading up to the northern tier border states, or even to Canada, and doubling their wages." They can't compete with that. But you're right. It seems to be somewhat weighted toward the industrial making-things side, rather than fi nished-product retail. So much of our finished-product retail, though, is foreign-sourced — clothing and electron- ics and those kinds of things; that is good for the transportation companies to move that stuff, but, you know, we don't make that anymore. JOC: The NITL raised some concerns regard- ing the P3 when it was fi rst announced. What's your impression now that the Federal Mari- time Commission has given the vessel-sharing agreement the go-ahead? C A RLTO N: I think the FMC did the right thing. I know enough about the Shipping Act to say that there was no way the FMC would have a suffi cient basis to say no, to block it. That's the way the law is written. What we asked them to do is what they did. We asked them to test this greatly expanded vessel-sharing agreement and to monitor it for its impact on the market- place. Our world in that sphere is defi ned by competition. The carriers told me directly: We will individually compete, individually price, individually market, but the box will go on whatever ship is in the rotation at that moment. I said, "That's fi ne." Our approach to the FMC was essen- tially the Nancy Reagan approach: Trust, but verify. Take them at their word that they will compete, but monitor the mar- ketplace to make sure that all of the outward signs continue to be individu- ally priced and marketed services. J O C: We'll either see larger vessel-sharing alliances come out or the P3 and G6 will ex- pand in scope. What does that mean for your members? C A R LT O N: What league members and what shippers like and treasure is choice. Our best example, of course, is in the domestic trucking industry. The Yellow Pages, or whatever is the equiva- lent online, there's hundreds. There are literally thousands of trucking fi rms. If you don't get a good price and good ser- vice from A, you go to B and then you go to C. The market works very, very well. They like choice. To the extent that choice is limited in the future will be problematic, because then they (ship- pers) will not be able to use the basic competitive forces of the marketplace to their advantage. The one thing you left off was the For the fi rst time since the 2008-09 Great Recession, shippers have a "small smile on their faces" when it comes to the economy, National Industrial Transportation League President and CEO Bruce Carlton said. Their increasing optimism in the economy, however, doesn't quell their concerns over a myriad of other issues, from tightening capacity to infrastructure investment. Carlton in late April spoke with JOC senior editors William B. Cassidy and Mark Szakonyi about the expectations NITL members have for the coming months. "WHAT SHIPPERS LIKE AND TREASURE IS CHOICE."

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