1. Donald Broughton Avondale Partners Senior Transportation Analyst, Managing Director, & Chief Market Strategist

2. What Inflation? 3. QE Lowers Rates, Right? 1.25% 1.75% 2.25% 2.75% 3.25% 3.75% 4.25% 4.75% 5.25% 450,000 650,000 850,000 1,050,000 1,250,000 1,450,000 1,650,000 1,850,000 2,050,000 2,250,000 2,450,000 2-May-07 2-May-08 2-May-09 2-May-10 2-May-11 2-May-12 2-May-13 2-May-14 Treasuries held by the Federal Reserve 10 Treasury yield 4. Truckings Economic Future Why does the Macro seem so bad? Tonnage tells a different story All modes showing varied degrees of acceleration / improvement Transportation Capacity Rail speeds slowing / increasing CapEx budgets to expand capacity Parcel struggling to meet e-commerce demand / increasing CapEx Trucking capacity tight / increasing CapEx & driver pay Trucking Capacity Specifically 5. In Tonnage We Trust Domestic Truck Tonnage growing at >3% and loads up 2% Airfreight was in contraction Now Domestic: +1.1% European: +5.6% Asia Pacific: +7.2% Rail Carloadings are up 5.0% overall Ex ag and coal: +7.7% Grain: +15.1% Coal: 3.2% Petroleum: +24.7% Intermodal is overall up 1.3% Stronger domestic intermodal despite service issues International container volume is rebounding 6. Q4 Service Issues Prompt UPS CapEx Increase $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 UPS Capex Budget ($M) 7. -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% GDP (right axis) Domestic Airfreight (left axis) International Airfreight (left axis) Source: A4A, BEA, and Avondale Partners Airfreight vs. GDP 8. -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% Avondale IATA 3 per. Mov. Avg. (Avondale) Sources: Airport Authorities, IATA and Avondale Partners European Airfreight 9. -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 40.0 42.0 44.0 46.0 48.0 50.0 52.0 54.0 56.0 58.0 60.0 Eurozone PMI (left axis) Avondale European Airfreight Index 3MMA (right axis) Sources: Airport Authorities, Markit and Avondale Partners Avondale European Airfreight Index vs. Eurozone PMI 10. -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Avondale IATA 3 per. Mov. Avg. (Avondale) Sources: Airport Authorities, IATA and Avondale Partners Asia Pacific Airfreight 11. -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% Avondale APAC SIA APAC Semis Billings Sources: Airport Authorities, SIA and Avondale Partners Avondale APAC Airfreight vs. SIA APAC Semiconductor Billings 12. -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% GDP (right axis) Rail Carloads Ex Coal and Ag (left axis) Source: American Association of Railroads, BEA, and Avondale Partners Rail Carloads vs. GDP 13. 180 200 220 240 260 280 300 320 340 360 Thousands Total Carloads Originated by Class I U.S. Railroads Source:AAR and Avondale Partners LLC 14. -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% Rail Carloads (ex coal, ag, and petroleum) Two-year stacked 3WMA YoY 15. 95,000 105,000 115,000 125,000 135,000 145,000 155,000 165,000 Coal Carloads We believe coal will post YoY growth through the balance of 2014 as utilities move to re-stock inventories run down by the cold winter. That said, the cool summer to date has made the 2015 outlook more uncertain. Source:AAR & Avondale Partners 16. 38,000 43,000 48,000 53,000 58,000 63,000 68,000 73,000 Chemical Carload Volume Source:AAR and Avondale Partners 17. 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 Petroleum Carloads vs. North Dakota Oil Production North Dakota Oil Production Petroleum Carloads 18. 30,000 32,000 34,000 36,000 38,000 40,000 42,000 44,000 46,000 48,000 50,000 Chemicals (ex petroleum) Carloads Source:AAR & Avondale Partners 19. 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 0.0 5.0 10.0 15.0 20.0 25.0 Auto Carloads vs. Light Vehicle Sales U.S. LVS SAAR Automotive Carloads We expect mid single digit volume growth here given continued growth in auto sales. Source:AAR, Ward's & Avondale Partners 20. 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 200.0 Construction Materials vs. Housing Starts U.S. UnadjustedMonthly HousingStarts Lumber, Forest, Stone,Clay, Glass Carloads Volumes have shown solid growth of late, and though choppy, indicate a generally improving housing market Source:AAR, CensusBureau,and Avondale Partners 21. $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 100 120 140 160 180 200 220 240 260 280 Thousands Intermodal vs. Diesel US Intermodal Units Originated Avg On-Highway Diesel (left axis) Source:AAR, DOE, and Avondale Partners 22. 160,000 180,000 200,000 220,000 240,000 260,000 280,000 1 6 11 16 21 26 31 36 41 46 51 Week U.S. Intermodal Units Originated 2014 vs. 2013 2013 2014 Source:AAR and Avondale Partners LLC 23. 550 600 650 700 750 800 850 Source: Company Reports and Avondale Partners estimates Public TL Length of Haul 24. 50 60 70 80 90 100 110 ATAIndex Long-Haul Truckload > 1,000 miles Since the peak of the cycle in 1999 long-haul has trended down. Source: American Trucking Association and Avondale Partners 25. The Realities of Intermodal 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%