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Feb. 17, 2014

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28 THE JOURNAL OF COMMERCE www.joc.com FEBRUARY 17. 2014 2014 TRUCKING FORECAST SPECIAL REPORT JOC: How do you see the state of trucking as we enter 2014, and how do you see the state of the American Trucking Associations? BILL GRAVES: Well, you can't be the head of ATA and not be bullish on trucking. I don't have any doubts that times are going to get better; the question is how soon. The strength of this economy and the power of this nation are such that things are going to get better. January probably could have been a much better month, but the weather inter- fered. We're going to go through another debt ceiling debate. I think it will go better this time than last, but we still have to factor in the impact Congress and the administra- tion could have on consumer confi dence, the public perception of how we're doing as a nation, and that often drives how busi- ness goes. Bob will have to tell you the exact day the economy is going to really take off, but it's certainly better. Unfortunately, to some extent for our members, it's better because so many people exited the industry, so many people decided it's just too tough a battle to fi ght and capacity shrank a little bit or at least has been fl at, and now no one is rushing to add a lot of capacity. And so that when there is some bounce back everybody expects some pricing power to return. Bob and I are going to talk to a food shippers' group in a couple of weeks, and my mes- sage is going to have a lot to do with freight rates and how we expect it's going to cost more to move product. Look at all the regu- latory issues we're dealing with. It's going to be harder to fi nd drivers for a lot of rea- sons, not the least of which is the CSA issue. There's also a generational thing. There are a lot of folks growing up right now who are not going to view being a truck driver as the sort of job they aspire to have. At some point, there's going to have to be an adjustment in wages and the way people are compensated. Another round of fuel effi ciency standards is coming down the pike. That's not going to save you any money. You may be more fuel- effi cient, but the equipment you're driving is going to be dramatically more expensive. So everywhere you turn there is a tightening in capacity, and there is pressure on cost. BOB COSTELLO: I've actually become more optimistic over the last quarter-and-a-half or so. The reason being generic dry van freight in the trucking industry fi nally took off. It started early in the third quarter. Dry van freight was up 1.2 percent for the year, but in the fourth quarter, it was up 3.8 percent year-over-year. The third quarter was not quite that high but was also pretty good. This was a group of car- riers that hadn't seen that kind of recovery. Talk to folks on the dry van side and you've got niches that were doing OK, but, overall, things weren't that great. JOC: Niches such as refrigerated or energy- related freight? COSTELLO: We measure refrigerated sepa- rately. We all eat, so refrigerated tends to be very volatile from month to month. Last SHIFTING GEARS AT THE ATA WITH STRONGER, STEADIER economic expansion forecast for this year and truck capacity nearly static, the trucking industry expects to regain some of the pricing power and revenue it will need to cover a host of rising costs, many the result of regulatory initiatives in Washington. The American Trucking Associations, fresh from a reorganization designed to sharpen the lobbying group's focus on national advocacy, is marshaling resources for a protracted fi ght over infrastructure funding as Congress works on a surface transportation spending bill to replace the two-year law that expires on Sept. 30. At the same time, the association is pressing for reform in hours of ser- vice rules and the CSA initiative and increased "productivity" — how the trucking industry talks about truck size and weight limits. Ameri- can Trucking Associations President and CEO Bill Graves and Chief Economist Bob Costello sat down with JOC senior editors William B. Cassidy and Mark Szakonyi to discuss the economic, regulatory and political outlook for trucking and the industry's largest member- based lobbying organization in 2014 and beyond. Bill Graves, president and CEO, American Trucking Associations Bob Costello, chief economist, American Trucking Associations ➡ ➡

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