THANK YOU TO OUR SPONSORS · Trucking Trends: •Freight fundamentals remain good, not great. •And, expect slower growth rates in 2019 than in 2018. •Trade policy & government

THANK YOU TO OUR SPONSORS

Industry Analysis:

Trucking, Recruiting & Driver Data Every Recruiter Should Know

Moderator: Steve Sichterman, Vice President Client Services,Conversion Interactive Agency

THE PANEL:

Bob CostelloChief Economist & Senior Vice President of International Trade Policy & Cross-Border

Operations, ATA

Lana BattsCo-President

Driver iQ

Priscilla PetersVP Marketing & Training

Conversion Interactive Agency

2019 Economic Forecast:

Recession or Moving Back to Trend?

Real Gross Domestic Product GrowthAnnualized Rates

1.8%

3.0%2.8%

2.3% 2.2%

4.2%

3.4%

2.8%

1.6%

2.4%2.3% 2.3%

1.9%1.7%

1.5% 1.5%

0%

1%

2%

3%

4%

5%

2017 2018 2019 2020

Sources: BEA & ATA

Forecasts

Cannot average to get annual number.

Job Market

0

50

100

150

200

250

300

350

400

201

4

201

5

201

6

201

7

201

8

201

9

Monthly Job Changes(Thousands)

Sources: BLS & ATA

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

201

4

201

5

201

6

201

7

201

8

201

9

Unemployment Rate(Percent)

2016 2017 2018 2019

4.9% 4.4% 3.9% 3.5%

Previous 12-month avg:219,077

Employment Costs:Wages & Salaries

3.2%

1.8%

2.3%2.4%

2.6%

3.0%3.2%

3.3%

0%

1%

2%

3%

4%

Avg 2000-2007 Avg 2010-2014 2015 2016 2017 2018 2019 2020

Sources: BLS & ATA

Real Personal Consumption Growth(Goods Only)

2.9%

4.7%

3.5% 3.5%3.7%

3.3%

2.5%

0%

1%

2%

3%

4%

5%

Avg 2010 - 2014 2015 2016 2017 2018 2019 2020

Sources: BEA & ATA

Housing Starts are Growing, but at a Disappointing, Slow Rate

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

Total Housing Starts(Monthly; Annualized Rate; Millions)

2016 2017 2018 2019 2020

H.S. 1.18 M 1.21 M 1.26 M 1.28 M 1.38 M

Sources: Census & ATA

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

Single-Family vs Multi-Family Units(Monthly; Annualized Rate; Millions)

Single-Family

Multi-Family

Factory Output Outlook

90

95

100

105

110

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

Factory Output(Index)

Sources: Federal Reserve & ATA

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Factory Output(Year-over-Year Percent)

2016 2017 2018 2019 2020

Output -0.7% 1.5% 2.5% 2.1% 1.9%

Source: Census Bureau

Total Business Inventory-to-Sales Ratio(Data adjusted for seasonal, holiday, and trading-day differences, but not price changes)

Likely Optimal Range

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

1.55

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Freight Market

Trucking Trends:• Freight fundamentals remain good, not great.• And, expect slower growth rates in 2019 than in 2018.• Trade policy & government shutdown is making it difficult to read near-

term tea leaves.• Tariff pull ahead problem

• Capacity growth remains difficult, but the large reductions have stopped.• And, some efficiencies may have added effective capacity.• Plus, used truck sales are up, suggesting some new entrants to the

industry – Credit freight based apps?• Drivers market remains tight, but large pay increases seem to be helping.

Source: ATA’s Trucking Activity Report

Total For-Hire TL LoadsIndex: January 2010=100; 3-Month Moving Average

Includes Dry Van, Flatbed, Temp Controlled, and Tank Truck

Source: DAT and ATA

Spot Market LoadsIndex: January 2010=100; 3-Month Moving Average

Industry Capacity Trends

-5.0%

-0.2%-0.9%

0.6%

-7.0%

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

Large TLs Small TLs

2017

2018

Small Fleet: Less than $30 million in annual revenue

For-Hire TL Tractor Changes: Large vs Small Fleets


Includes company tractors and independent contractor equipment

2018 data is through Oct

For-Hire Truckload Tractor Data



Large TLs: Company Tractors vs Independent Contractor EquipmentIndex: January 2017=100

Trough to Peak: +5.1%

Peak to Trough: -4.1%

Driver Turnover Trends

Source: ATA

98% 96% 95% 93%

81%

87% 87%

93%

82%79%

90%

79% 78% 79%

72% 72%

9% 11% 11% 11% 9% 9% 10% 11%

0%

25%

50%

75%

100%

2012 2013 2014 2015 2016 2017 Q3 2018 YTD 2018

Large TL Small TL LTL

Truck Driver Turnover Rates

All rates are annualized; YTD 2018 number is through Q3

Recruiter & Driver Data & Analysis

Data Source

0%

20%

40%

60%

80%

Dry Van Refrigerated Flatbed Tanker

Type of Carriers

• Quarterly Driver iQ Survey of Customers and Potential Clients

• Majority over $100 million in revenue

• Over 75,000 trucks operated by respondents in Q4 2018 survey

• Not a valid, random sample

• Ask for current impression and future expectations

• Did not ask for specific data within companies

• Where applicable, cited other sources

0%

20%

40%

60%

Size of Carriers

Under $30 million $30-$100 million

Over $100 million

23

Recruiters’ Expectations of Future Driver Turnover

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Increase Decrease Remain the same

Expected Driver Turnover Next Quarter

Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018

24

Source: Driver iQ, Trends in Truckload Recruiting and Retention

Recruiters’ Expectations Number of Applicants Next Quarter

0%

10%

20%

30%

40%

50%

60%

70%

Increase Decrease Remain the same

Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018

25


Recruiters’ Expectations Quality of Applications Compared to Last Year

0%

10%

20%

30%

40%

50%

60%

Better Worse About the Same

26


Recruiters’ Impressions Changing Hiring Standards

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

More Stringent Less Stringent About the Same

27


Carrier Programs to Recruit Veterans

0%

5%

10%

15%

20%

25%

30%

35%

40%

Yes Somewhat No Unsure No Programs

28Source: Driver iQ, Trends in Truckload Recruiting and Retention

Carrier Programs to Recruit Women

0% 5% 10% 15% 20% 25% 30% 35% 40%

Other (please specify)

Unsure

No

Special sessions in orientation to address issues affecting women…

Special spousal training program

Promote our technology to attract women

Offer female mentors for new hires who are women

Made specific accommodations in our facilities for women (e.g.…

Advertising aimed specifically toward women

Offer female trainers for new hires who are women


How Carriers Track the Source of New Hires

Yes No


Recruiters’ Confidence in the Integrity/Methodology For Collecting Sources of New Drivers

Yes No Don't Know


Recruiters’ Best Source of Retention After Two Years

0%

10%

20%

30%

40%

50%

60%

70%

Referrals Training Schools Rehires Job Boards Advertising Job Fairs Don't know

4Q 2017 Q4 2018


Driver Data & Analysis

Carriers First Communication with New Lead

34

A phone call Send a digital short form app Send a full application Send a text message Other (please specify)





Recruiters’ Explanations of Causes of Driver Turnover

0% 10% 20% 30% 40% 50% 60%

Total Compensation

Time Away from Home

Lack of Communications

Unpredictability of Paycheck each week

Issues resovling problems

Unpredictabilty of Home Time

Problems with Supervisors

Lack of Steady Miles

Gap Between Promised Compensation and Working Conditions Needed to…

Lack of Respect as Truck Drivers

Health/Couldn't Pass Physical

Equipment Maintenance

Retirement

Insufficient Training/Orientation

Lack of Respect within the Company

ELD Requirements

Too Many Deadhead Miles

Stressful Job

Unsafe Working Conditions or Practices

Lack of Clear or Fair Work Rules


PAY

Recruiters’ Impressions of Total Compensation Needed to Impact Turnover

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

$75,000 $100,000 More than $100,000

1Q 2018 Q4 2018



Recruiters’ Expectations of Future Driver Compensation

0%

10%

20%

30%

40%

50%

60%

70%

80%

Increase Decrease Remain the Same

Expectations of Future Driver Compensation (pay and benefits)

4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018


Company Changes in Pay Programs

43

0% 10% 20% 30% 40% 50% 60% 70%

Other

No

Guaranteed Weekly Wage

Tenure Bonus

More Soft Bonuses

Performance Bonus

Cents Per Mile

Changes in Pay Programs


HOW RECRUITERS THINK DRIVERS VIEW COMPENSATION



Carrier Guaranteed Weekly Compensation Programs

Yes No


Carriers Offering Sign-On Bonuses

0%

10%

20%

30%

40%

50%

60%

70%

80%

Yes No Unsure

4Q 2017 2Q 2018 4Q 2018

47



Recruiters’ Impressions of Productivity of New Hires

0%

5%

10%

15%

20%

25%

30%

35%

Less than 30 days. 31-60 days. 61-90 days. 91-120 days. More than 4months.

Unsure. N/A


Carrier Guaranteed Transition Pay Programs

0% 10% 20% 30% 40% 50% 60% 70% 80%

No

Yes, but for less than 30 days.

Yes, for 31-60 days.



Yes, for more than 4 months.


30%

Recruiters’ Explanations of the Causes of Driver Turnover

0% 10% 20% 30% 40% 50% 60%

Total Compensation

Time Away from Home

Lack of Communications

Unpredictability of Paycheck each week

Issues resovling problems

Unpredictabilty of Home Time

Problems with Supervisors

Lack of Steady Miles

Gap Between Promised Compensation and Working Conditions Needed to…

Lack of Respect as Truck Drivers

Health/Couldn't Pass Physical

Equipment Maintenance

Retirement

Insufficient Training/Orientation

Lack of Respect within the Company

ELD Requirements

Too Many Deadhead Miles

Stressful Job

Unsafe Working Conditions or Practices

Lack of Clear or Fair Work Rules


COMMUNICATIONS





Q&A

THANK YOU TO OUR SPONSORS

Documents

THANK YOU TO OUR SPONSORS · Trucking Trends: •Freight fundamentals remain good, not great. •And, expect slower growth rates in 2019 than in 2018. •Trade policy & government