Trends in Intermodal Freight Transport: J.B. Hunt ... ?· next. move?™ | 3 . Intermodal Rail Carrier…

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<ul><li><p>Ken Miller Vice President, Intermodal J.B. Hunt Transport, Inc. </p></li><li><p>1 Whats your next move? | </p><p>Ken Miller, VP of Intermodal Operations </p></li><li><p>2 Whats your next move? | </p><p>SERVICE REVIEW: MARKET SHARE </p><p>Market overview (segment specific) Market size: $12 Billion </p><p>Capacity: 205,000 53-foot Containers </p><p> Industry outlook: Growing at &gt; 7% </p><p>Our position 25 - 28% of overall market (revenue and/or capacity) </p><p>Opportunities Highway Conversion </p><p>Customer Deliveries </p><p>New Services Canada/Mexico/Eastern Network Expansion </p><p>Roadblocks Market Share </p><p>Competitor Actions </p></li><li><p>3 Whats your next move? | </p><p>Intermodal Rail Carrier Industry Comparison </p><p>INTERMODAL VOLUME </p><p>2011 </p><p>SALES APPROACH CAPACITY </p><p>4.5 M </p><p>3.3 M </p><p>2.3 M </p><p>3.2 M </p><p>BNSF &amp; Motor Carriers </p><p>Motor Carriers </p><p>Unlimited </p><p>IMC Limited by fleet size </p><p>IMC &amp; Motor Carriers </p><p>Limited by fleet size </p><p>Limited by fleet size </p><p>LARGEST SEGMENT by volume </p><p>Intermodal </p><p>Industrial Products </p><p>Coal </p><p>Industrial Products </p><p>Rail Owned </p><p>Containers </p><p>Containers </p><p>Trailers &amp; Containers </p><p>EQUIPMENT OWNER </p><p>IMC &amp; Motor Carriers </p><p>Rail Owned </p><p>Rail Owned </p><p>Containers </p><p>Type </p></li><li><p>4 Whats your next move? | </p><p>Estimated 53 Domestic Fleet by Owner </p><p> 200 </p><p> 200 </p><p> 350 </p><p> 450 </p><p> 500 </p><p> 500 </p><p> 800 </p><p> 1,000 </p><p> 1,300 </p><p> 1,700 </p><p> 2,200 </p><p> 4,000 </p><p> 5,000 </p><p> 8,000 </p><p> 10,200 </p><p> 15,800 </p><p> 18,000 </p><p> 23,100 </p><p> 32,700 </p><p> 35,300 </p><p> 65,700 </p><p> - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 </p><p>FEC </p><p>Matson </p><p>Dart </p><p>NS/KCS </p><p>KCS </p><p>Marten </p><p>COFC Logistics </p><p>CH Robinson </p><p>Universal Logistics </p><p>Other </p><p>APL Logistics </p><p>CSX </p><p>UPS </p><p>CN </p><p>Swift </p><p>Schneider </p><p>Pacer </p><p>Hub </p><p>UMAX </p><p>EMHU </p><p>JB Hunt </p><p>Total Fleet Size 227,000 </p></li><li><p>5 Whats your next move? | </p><p>Source: Establish, Inc/Herbert W. Davis and Company 2006 Database </p><p>LOGISTICS COST BREAKDOWN </p><p>50% </p><p>22% </p><p>10% 8% </p><p>4% 3% 2% 1% </p><p>Transportation Inventory Labor Customer Rent Admin Supplies Other </p><p>Transportation is generally the greatest cost in the supply chain. </p><p>Focus on Transportation </p><p>Collaboration to reduce costs </p><p>and increase capacity. </p><p>Supply Chain Opportunities </p></li><li><p>6 Whats your next move? | </p><p>Todays Supply Chain Landscape </p><p>Shippers are looking for partners with flexible, comprehensive, value added solutions </p><p>Steadily increasing freight demand </p><p>Truckload capacity continues to tighten </p><p>Supply/demand balance becoming an issue </p><p> Intermodal volumes continue to rise and take highway share </p><p>Diesel prices remain elevated </p><p> CONFIDENTIAL </p></li><li><p>7 Whats your next move? | </p><p>Top Supply Chain Challenges (Next 2-5 Years) </p><p>Tightening driver market </p><p>Government regulations CSA EOBR mandates Hours of Service CARB </p><p>Aging equipment leads to replacement at higher cost basis </p><p>Highway infrastructure congestion and deterioration </p><p>Access to capital </p><p>Fuel </p><p>Managing Budgets </p><p>CONFIDENTIAL </p></li><li><p>8 Whats your next move? | </p><p>Intermodal Benefits Are Driving Change </p><p>Shippers, Carriers, Environment </p><p> Economical </p><p> Expanding capacity </p><p> Greener shipping </p><p> Less congestion </p><p> Better jobs </p><p>CONFIDENTIAL </p></li><li><p>9 Whats your next move? | </p><p>So Why Hasnt More Freight Been Converted? </p><p>Some Shippers Say </p><p> I had a bad experience with Intermodal 15 years ago. </p><p> Shipping requirements wont allow Intermodal. </p><p> Intermodal transit is slow and variable. </p><p> Wont work for my customers. </p><p>CONFIDENTIAL </p><p>Miller_coverMiller_JB Hunt EPA May 2014</p></li></ul>

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