Change is Good? The Impact of Automation and Digitalization in the Drayage Industry Prepared for International Trade Symposium May 18, 2018

Global Trade and the State of US Drayage GOOD NEWS: International intermodal Growth up 7% QTR 1 18 Forecast is strong for the balance of 2018 ***Highest growth since 2014 CHALLENGING NEWS: Driver shortage is more critical than its ever been Drayage will continue to struggle to meet demand Stricter compliance rules “ELD MANDATE”

ELD Mandate Continues to Impact Drayage ENFORCEMENT IS HERE ELD Mandate Continues to Impact Drayage ENFORCEMENT IS HERE! APRIL 1, 2018 FMCSA Section 395: Hours of Service 11-Hour Driving Limit: May drive a maximum of 11 hours after 10 consecutive hours off duty. 14-Hour Limit: May not drive beyond the 14th consecutive hours after coming on duty, following 10 consecutive hours off-duty. Off-Duty time does not extend the 14 hour period. Rest Breaks: May drive only if 8 hours or less have passed since end of driver’s last off-duty or sleeper-berth period of at least 30 minutes. (must take a 30 min break BEFORE the 8th hour of being on- duty/driving). 70-Hour Limit: May not drive after 70 hours on duty 8 consecutive days. A driver may restart a 8 consecutive day period after taking 34 or more consecutive hours off duty.

Original intent of the Mandate: Improved Safety, Fleet Productivity, Driver utilization and Fuel Efficiency Journal of Commerce: Jan 15, 2017 Infographic: US truck logging device rule 101 “Drivers that initially lose miles eventually may gain more miles and more pay as carriers use ELD date to better manage drivers and utilize equipment within HOS limits.”

What Does ELD Enforcement Mean to the Driver and to Your Delivery? IMC Operating Companies have had ELD’s for many years with the focus on driver safety and compliance. The difference is that the new software has no room for idle movement in the truck. The result is the driver is on the clock at all times as soon as that engine starts. The Driver is under pressure to maximize time because drivers are paid by the move. Drivers are running out of time for longer hauls, overnight fees have been instituted. More hub and spoke opportunities FMCSA enforcement sending notifications for every minute over HOS. There is no flexibility for the driver.

The Driver Shortage : Why Do You Feel It Now…………………………… 50,000 more drivers are needed to serve the intermodal needs in the United States (ATA) Trucks according to IANA are at 100% utilization Import tonnage grew over 5% in 2017 and forecasted at another 4.5% this quarter Export tonnage grew nearly 2% , many Ag products gearing up. Massive storms in 2017 shattered supply chains starting in late summer and the domino effect never caught up Electronic Logging took an estimated 8% of driver capacity out of an already tight market The industry has taken drivers for granted and there are abuses in wait time, drivers are leaving! Chassis problems are adding to the driver wait time

What is the impact to the industry? Transport Topics: February 12, 2018 There Aren’t Enough Truckers, and That’s Pinching US Profits

What Can You Do to Help the Driver and Your Company? Find ways to improve driver productivity. Faster turnarounds at your dock. Honoring appointment schedules. Talk to your warehouses! Create policies that honor the driver time. The mindset about the driver needs to…………………………. …………………. CHANGE! ..............,… Please listen to Mr. Wendell Scott, IMCG driver………

Change is necessary! Thank you !