Mergers Activity Set To Increase In The Transportation Industry According To Panel Of Industry Experts

• On 11:25 pm EDT, Monday October 5, 2009

67 WALL STREET, New York - October 5, 2009 - The Wall Street Transcript has just published its Transportation and Logistics Report offering a timely review of the sector to serious investors and industry executives. This 81 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: China Export Tax -- Overcapacity in the Shipping Industry -- Market Balance -- Traffic Flow -- Asia-Pacific Region -- Import/Export Traffic -- Beneficiaries of Financial Strength -- Terminating Markets -- International Business -- Tanker Companies Versus Dry Bulk Companies -- Chinese Stimulus -- Real Demand Versus Stimulus Demand -- Monitoring Potential Acquisitions -- Automobile Industry -- Demand in Emerging Countries -- Falling Demand -- Future Oversupply -- Growth of Fleets -- Pickups in Infrastructure Spending -- Navigating the Downturn -- Supply & Demand -- Chinese Cell Phones -- Mobile Phone Market Growth -- Future Growth -- Stimulus Programs -- Temporary Boosts -- Inventory Stabilization -- Affects of Declines in Passenger Flights -- Capacity of Passenger Aircraft -- Improvement in Volumes -- Pricing & Margins -- Restructuring -- Forms of Consolidation -- Investing in Infrastructure -- Wage Concessions -- Railroad Expansion

Companies include: Diana Shipping (DSX); Star Bulk Carriers (SBLK); Nordic American Tankers (NAT); Overseas Shipholding Group (OSG); General Maritime (GMR); Federal Express (FDX); UPS (UPS); Forward Air (FWRD); Expeditors International (EXPD); Express-1; Tsakos Energy Navigation (TNP); Navios (NM); Vale (VALE); Excel (EXM); Teekay (TK); DryShips (DRYS); UTi Worldwide (UTIW); Old Dominion (ODFL); Arkansas Best (ABFS); J.B. Hunt (JBHT); Con-way (CNW); Atlas Air (AAWW); Air Transport Services Group (ATSG); Norfolk Southern (NSC); Union Pacific (UNP); CSX (CSX); Canadian National Railway (CNI); C.H. Robinson (CHRW); Kuehne and Nagel; Deutsche Post; YRC Worldwide (YRCW); Dynamex (DDMX); Ryder ®

In the following brief excerpt from the 81 page report, 4 top tier Transportation equity analysts discuss the outlook for the sector and for investors.

Helane Becker is a Senior Research Analyst covering the transportation industry for Jesup & Lamont Securities Corp., focusing on airlines, air freight and freight forwarding. She has more than 25 years of experience in the financial industry, holding positions within research, trading and investment banking departments. She was ranked one, two, or three from 1985 to 1993 by Institutional Investor magazine. She was also ranked in the top five by The Wall Street Journal in 1992, 1993, 1997, 2001 and 2002 as one of the best analysts on the street.

Robin Byde is head of transport equity research specializing in logistics, shipping and airlines. He joined HSBC in 2002. He has worked as an equity analyst, consultant and auditor in the transportation and support services industries since the mid-1990s and has been highly ranked in external client surveys as a transport analyst.

Kevin Kirkeby is an Industry Analyst within Standard & Poor's U.S. Equity Research department, covering a broad array of industrial companies. His coverage includes railroads and trucking companies, as well as industrial equipment and aircraft lessors. He also authors the twice-yearly Commercial Transportation survey.

David G. Ross, CFA is a Principal and Transportation Analyst with Stifel Nicolaus. He joined the Stifel Nicolaus research team in connection with Stifel's acquisition of Legg Mason's Capital Markets Group in December 2005. Mr. Ross was ranked #1 for stock picking both by the Financial Times/StarMine in the Road & Rail industry and by the Wall Street Journal's Best on the Street Analysts Survey in the Industrial Transportation industry in 2009.

TWST: Helane, what's your view, are we going to see M&A activity in the space to kind of sort things out?

Ms. Becker: Yes we are. For starters, I don't think banks are willing to push companies out of business because they don't want to own or run the fleet. I think it's very easy for one company to find a competitor's customer list and aggressively go after those customers negating the need to do an ill-advised or ill-timed acquisition. Companies do not want to take on significant amounts of debt during a recession; they are looking to shore-up their balance sheets and pay down debt. A well capitalized; well-run company can target a competitor's customers and try to steal those customers. As to overcapacity and consolidation. A form of consolidation is the elimination of older, fuel inefficient capacity. A significant amount of older capacity is never coming back in to the system, so as economies recover, the existing unused capacity gets better utilized and today's load factors of 60% increase to 90% without adding additional equipment or personnel so that the improvement falls to the bottom line.

TWST: Kevin, as we look out beyond this muted recovery that everybody seems to be taking about, where is growth for this industry, is it still the emerging economies?

Mr. Kirkeby: I want to touch on the rails for a minute. This is for several reasons. First, we've already discussed the asset-based truckers quite extensively. Second, the companies we have under coverage are much more domestically focused. Third, I think a look at where the rails are investing is quite telling and relevant to the question. Outside of the normal capital expenditures, the rails are investing heavily in their intermodal infrastructure. Their growth CapEx is going into double-tracking certain heavily trafficked freight lanes, increasing the clearance at bridges and tunnels so that containers can be stacked two high per rail car, and into building new intermodal transfer facilities. Each of the rails has essentially said that long term, much of their growth will come from the containerization of freight. Not only are customers looking for less expensive transportation options, they are also looking for ways to reduce their carbon footprint. This is in keeping with the green theme favored by the current President. Two of the rails, Norfolk Southern (NSC) and CSX (CSX), which both operate in the eastern half of the U.S., have discussed quite extensively their corridor strategies, where they believe they can become more efficient and take market share from the trucking companies. CSX is investing in the National Gateway, while Norfolk Southern has the Heartland and Crescent Corridors. Even if the consumer only plays a small role in the next economic recovery, the rails are positioning themselves to grow their volumes, in our view.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 81 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

For Information on subscribing to The Wall Street Transcript, please call 800/246-7673

Buzz up!