This excerpt taken from the NSC 8-K filed Jun 12, 2007.
In the longer term, with regard to the competitive relationship between motor carriers and the rails, we believe that there are secular changes occurring in the cost structure and capacity available in the motor carrier industry.
We have all driven on the highways recently and we have all seen congested roadways with increasing frequency. I'll talk more about this in a minute.
Truck driver recruiting and other pressures on motor carriers costs, such as increasing fuel and equipment costs, are real and will impact the ability of motor carriers to compete with an improving Intermodal product.
These dynamics in the motor carrier business are not just our opinion; they are recognized by many major motor carriers as real factors that will affect their business. As such, many motor carriers are developing or have developed extensive and expanding Intermodal capabilities as part of their core strategy.
We talked about highway congestion, and this map depict the U.S. Department of Transportations estimates of congested highway segments in 1998.
Note on this map that most of the congestion is centered around major metropolitan areas in the U.S.
Now look at the DOTs 2020 projections. Not only is there more congestion in the major metropolitan areas, but in smaller markets as well. Further, there now appear entire corridors of congested highway segments, particularly in the east.
Look specifically at the highway routes between the Central Southeast and the Northeast along the I-85, I-75 and particularly the I-81 corridors. Traffic on major sections of these highways will exceed planned capacity by 2020. Keep this in mind as we lay out our new corridor strategy later in this discussion.
Increasing demand for higher quality, truck-like
Increasing containerized import and export traffic
Higher growth rates in all-water services to East Coast
Increased demand for shorter-haul gateway