The Great Recovery…Or NOT

A Trucking Company’s Prospective

Harold Sumerford, Jr., CEOJ & M Tank Lines, Inc.

March, 2011

Major Issues Hindering Recovery

Energy Cost

Equipment & Component Cost

Government Regulations and Laws

Driver Shortage

Energy Cost

Anybody's Guess?

Increase in Fuel Prices

Reconstruction of Japan

Fuel is 33.7% higher than last year

Equipment & Component Cost

Higher demand for metals to make equipment

Truck cost increased about 30% since the 2007 EPA engines

Increased Tire Cost◦ Possible 20% increase this year◦ Low supplies due to the economy◦ Extreme weather & aging trees: limited supply of natural rubber◦ Tsunami in Japan shutdown many tire manufacturers◦ China buying a larger portion of the tire manufactured in China◦ Cost of natural rubber is up almost 100% since August 2010

Changes in Government Regulations & Laws

Highway Bill

Truck Size and Weight

Mandating Onboard Truck Technology

Onboard Trucking Technology: People Net

◦Enforcement of the Hours of Service◦Inexpensive to use as compared to paper logs◦Low cost of entry into an e-log system◦One reason not to use the e-log: to run illegally

Changes in Government Regulations & Laws

FMCSA: Proposed Changes in the H.O.S.

◦Trucking productivity would go down about 5%◦Cost to Shippers will increase probably 1% to 3%◦Driver pay will have to increase a minimum of $2,500

per year

Changes in Government Regulations & Laws

CSA 2010

◦Drivers and Companies are held accountable◦Accident: Driver at no fault; score increase◦Pre-employment Screening Program (PSP)

Help identify the problem drivers Probably force out more drivers than the CDL

program and Drug Testing

Changes in Government Regulations & Laws

Truck Drivers & Capacity

Driver Shortage◦Leaving industry during the recession◦Leaving due to CSA 2010◦Drivers’ pay down compared to other industries

Trucking companies replenishing their fleets, not increasing the size

Harold A. Sumerford, Jr.Chief Executive OfficerJ & M Tank Lines, Inc.

7051 Meadowlark DriveSuite 102

Birmingham, AL 352421-800-456-8265www.jmtank.com

Any Questions?