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1 THANK YOU TO OUR SPONSORS

2 Industry Analysis: Trucking, Recruiting & Driver Data Every Recruiter Should Know Moderator: Steve Sichterman, Vice President Client Services, Conversion Interactive Agency

3 THE PANEL: Bob Costello Chief Economist & Senior Vice President of International Trade Policy & Cross-Border Operations, ATA Lana Batts Co-President Driver iq Priscilla Peters VP Marketing & Training Conversion Interactive Agency

4 2019 Economic Forecast: Recession or Moving Back to Trend?

5 Real Gross Domestic Product Growth Annualized Rates 5% 4% 4.2% Forecasts 3.4% 3% 3.0% 2.8% 2.8% 2.3% 2.2% 2.4% 2.3% 2.3% 2% 1.8% 1.6% 1.9% 1.7% 1.5% 1.5% 1% 0% Sources: BEA & ATA Cannot average to get annual number.

6 Job Market Monthly Job Changes (Thousands) Previous 12-month avg: 219, Unemployment Rate (Percent) % 4.4% 3.9% 3.5% Sources: BLS & ATA

7 4% Employment Costs: Wages & Salaries 3% 3.2% 2.3% 2.4% 2.6% 3.0% 3.2% 3.3% 2% 1.8% 1% 0% Avg Avg Sources: BLS & ATA

8 Real Personal Consumption Growth (Goods Only) 5% 4.7% 4% 3.5% 3.5% 3.7% 3.3% 3% 2.9% 2.5% 2% 1% 0% Avg Sources: BEA & ATA

9 Housing Starts are Growing, but at a Disappointing, Slow Rate Total Housing Starts (Monthly; Annualized Rate; Millions) Single-Family vs Multi-Family Units (Monthly; Annualized Rate; Millions) Single-Family Multi-Family Sources: Census & ATA H.S M 1.21 M 1.26 M 1.28 M 1.38 M

10 Factory Output Outlook Factory Output (Index) 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% Factory Output (Year-over-Year Percent) Sources: Federal Reserve & ATA Output -0.7% 1.5% 2.5% 2.1% 1.9%

11 Total Business Inventory-to-Sales Ratio (Data adjusted for seasonal, holiday, and trading-day differences, but not price changes) Likely Optimal Range Source: Census Bureau

12 Freight Market

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

14 Total For-Hire TL Loads Index: January 2010=100; 3-Month Moving Average Includes Dry Van, Flatbed, Temp Controlled, and Tank Truck Source: ATA s Trucking Activity Report

15 Source: DAT and ATA Spot Market Loads Index: January 2010=100; 3-Month Moving Average

16 Industry Capacity Trends

17 3.0% 2.0% 1.0% For-Hire TL Tractor Changes: Large vs Small Fleets % -1.0% -0.9% -2.0% -3.0% -4.0% -5.0% -5.0% -6.0% -7.0% Large TLs Includes company tractors and independent contractor equipment 0.6% -0.2% Small Fleet: Less than $30 million in annual revenue Small TLs Source: ATA s Trucking Activity Report 2018 data is through Oct

18 Source: ATA s Trucking Activity Report For-Hire Truckload Tractor Data

19 Large TLs: Company Tractors vs Independent Contractor Equipment Index: January 2017=100 Trough to Peak: +5.1% Peak to Trough: -4.1% Source: ATA s Trucking Activity Report

20 Driver Turnover Trends

21 Truck Driver Turnover Rates 100% 75% 98% 82% 96% 95% 79% 90% 93% Large TL Small TL LTL 87% 87% 79% 81% 78% 79% 93% 72% 72% 50% 25% 9% 11% 11% 11% 9% 9% 10% 11% 0% Q YTD 2018 Source: ATA All rates are annualized; YTD 2018 number is through Q3

22 Recruiter & Driver Data & Analysis

23 Data Source Quarterly Driver iq Survey of Customers and Potential Clients Majority over $100 million in revenue Over 75,000 trucks operated by respondents in Q 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 60% 40% 20% 0% 80% 60% 40% 20% 0% Size of Carriers Under $30 million $30-$100 million Over $100 million Type of Carriers Dry Van Refrigerated Flatbed Tanker 23

24 Recruiters Expectations of Future Driver Turnover 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% Expected Driver Turnover Next Quarter 0% Increase Decrease Remain the same Q Q Q Q Q Source: Driver iq, Trends in Truckload Recruiting and Retention 24

25 Recruiters Expectations Number of Applicants Next Quarter 70% 60% 50% 40% 30% 20% 10% 0% Increase Decrease Remain the same Source: Driver iq, Trends in Truckload Recruiting and Retention Q Q Q Q Q

26 Recruiters Expectations Quality of Applications Compared to Last Year 60% 50% 40% 30% 20% 10% 0% Better Worse About the Same Source: Driver iq, Trends in Truckload Recruiting and Retention 26

27 Recruiters Impressions Changing Hiring Standards 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% More Stringent Less Stringent About the Same Source: Driver iq, Trends in Truckload Recruiting and Retention 27

28 Carrier Programs to Recruit Veterans 40% 35% 30% 25% 20% 15% 10% 5% 0% Yes Somewhat No Unsure No Programs Source: Driver iq, Trends in Truckload Recruiting and Retention 28

29 Carrier Programs to Recruit Women Offer female trainers for new hires who are women Advertising aimed specifically toward women Made specific accommodations in our facilities for women (e.g. Offer female mentors for new hires who are women Promote our technology to attract women Special spousal training program Special sessions in orientation to address issues affecting women No Unsure Other (please specify) 0% 5% 10% 15% 20% 25% 30% 35% 40% Source: Driver iq, Trends in Truckload Recruiting and Retention 29

30 How Carriers Track the Source of New Hires Yes No Source: Driver iq, Trends in Truckload Recruiting and Retention 30

31 Recruiters Confidence in the Integrity/Methodology For Collecting Sources of New Drivers Yes No Don't Know Source: Driver iq, Trends in Truckload Recruiting and Retention 31

32 Recruiters Best Source of Retention After Two Years 70% 60% 50% 40% 30% 20% 10% 0% Referrals Training Schools Rehires Job Boards Advertising Job Fairs Don't know 4Q 2017 Q Source: Driver iq, Trends in Truckload Recruiting and Retention 32

33 Driver Data & Analysis

34 Carriers First Communication with New Lead A phone call Send a digital short form app Send a full application Send a text message Other (please specify) 34

35 Driver Data & Analysis

36 Driver Data & Analysis

37 Driver Data & Analysis

38 Driver Data & Analysis

39 Recruiters Explanations of Causes of Driver Turnover Lack of Clear or Fair Work Rules Unsafe Working Conditions or Practices Stressful Job Too Many Deadhead Miles ELD Requirements Lack of Respect within the Company Insufficient Training/Orientation Retirement Equipment Maintenance Health/Couldn't Pass Physical Lack of Respect as Truck Drivers Gap Between Promised Compensation and Working Conditions Needed to Lack of Steady Miles Problems with Supervisors Unpredictabilty of Home Time Issues resovling problems Unpredictability of Paycheck each week Lack of Communications Time Away from Home Total Compensation PAY 0% 10% 20% 30% 40% 50% 60% Source: Driver iq, Trends in Truckload Recruiting and Retention 39

40 Recruiters Impressions of Total Compensation Needed to Impact Turnover 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% $75,000 $100,000 More than $100,000 1Q 2018 Q Source: Driver iq, Trends in Truckload Recruiting and Retention 40

41 Driver Data & Analysis

42 Recruiters Expectations of Future Driver Compensation 80% Expectations of Future Driver Compensation (pay and benefits) 70% 60% 50% 40% 30% 20% 10% 0% Increase Decrease Remain the Same 4Q Q Q Q Q 2018 Source: Driver iq, Trends in Truckload Recruiting and Retention 42

43 Company Changes in Pay Programs Changes in Pay Programs Cents Per Mile Performance Bonus More Soft Bonuses Tenure Bonus Guaranteed Weekly Wage No Other 0% 10% 20% 30% 40% 50% 60% 70% Source: Driver iq, Trends in Truckload Recruiting and Retention 43

44 HOW RECRUITERS THINK DRIVERS VIEW COMPENSATION Source: Driver iq, Trends in Truckload Recruiting and Retention

45 Driver Data & Analysis

46 Carrier Guaranteed Weekly Compensation Programs Yes No Source: Driver iq, Trends in Truckload Recruiting and Retention 46

47 Carriers Offering Sign-On Bonuses 80% 70% 60% 50% 40% 30% 20% 10% 0% Yes No Unsure 4Q Q Q 2018 Source: Driver iq, Trends in Truckload Recruiting and Retention 47

48 Driver Data & Analysis

49 Recruiters Impressions of Productivity of New Hires 35% 30% 25% 20% 15% 10% 5% 0% Less than 30 days days days days. More than 4 months. Unsure. N/A Source: Driver iq, Trends in Truckload Recruiting and Retention 49

50 Carrier Guaranteed Transition Pay Programs Yes, for more than 4 months. Yes, for days. Yes, for days. 30% Yes, for days. Yes, but for less than 30 days. No 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: Driver iq, Trends in Truckload Recruiting and Retention 50

51 Recruiters Explanations of the Causes of Driver Turnover Lack of Clear or Fair Work Rules Unsafe Working Conditions or Practices Stressful Job Too Many Deadhead Miles ELD Requirements Lack of Respect within the Company Insufficient Training/Orientation Retirement Equipment Maintenance Health/Couldn't Pass Physical Lack of Respect as Truck Drivers Gap Between Promised Compensation and Working Conditions Needed to Lack of Steady Miles Problems with Supervisors Unpredictabilty of Home Time Issues resovling problems Unpredictability of Paycheck each week Lack of Communications Time Away from Home Total Compensation COMMUNICATIONS 0% 10% 20% 30% 40% 50% 60% Source: Driver iq, Trends in Truckload Recruiting and Retention 51

52 Driver Data & Analysis

53 Driver Data & Analysis

54 Driver Data & Analysis

55 Driver Data & Analysis

56 Q&A

57 THANK YOU TO OUR SPONSORS