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Five analysts and top management from seven sector firms examine the industry/services sector in this special 69-page Transportation/Logistics issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info456.htm.

TWST: Jason, how different is your outlook for the rails, the truckers and the freight forwarders over the next six to 12 months from what it had been prior to September 11?

Mr. Seidl: The world changed dramatically after September 11. Like many of my colleagues, I revised EPS assumptions downward for many of the names in my group. The tragic events of that day could prove to be the proverbial straw that broke the camel’s back. Sometimes it seems as if investors have forgotten that we have been in a manufacturing recession for some time now. The only thing that was holding our economy up was the consumer. Now, with more and more companies announcing layoffs, we may have lost the support of the consumer. Even prior to September 11 there were massive layoffs throughout our economy. I do not think we have seen the full impact of these actions and we could very well be headed into a full-blown recession. The question is, just how long does it last? Just recently I was at the American Trucking Association National Conference down in Nashville where I spoke to numerous carriers. I cannot recall a single carrier who was very optimistic about the prospects for a quick recovery next year. Most people are hoping — and I want to emphasize the word “hoping” — for a turnaround late next year. The real problem is that investors do not appear to be pricing that into the market right now. It seems as if most people are hoping for an early second-half turnaround. The first quarter of 2001 could prove to be very challenging for many carriers, as it is seasonally the weakest for freight demand. Accordingly, I am worried that the transport group could trade down as the bad news mounts in the quarter.

TWST: Jason, I think you were going to talk about some of the micro-caps.

Mr. Seidl: We are also recommending Old Dominion Freight Line (Nasdaq:ODFL), a Southeastern LTL carrier. There are very few small publicly-traded LTL companies left in the marketplace. Indeed, Motor Cargo (Nasdaq:CRGO) was recently purchased by Union Pacific and Arnold Industries (Nasdaq:AIND) was bought by Roadway. While Old Dominion could be a potential takeover candidate, we like its prospects as a stand-alone company. ODFL has done a fine job of managing through the economic downturn. Indeed, they added a small acquisition at the beginning of the year and boosted capacity at some of the bottlenecks in their system by acquiring larger terminals from some struggling carriers. We believe ODFL is well positioned to benefit from additional freight when the economy does turn around. The company’s stock appears undervalued to us, trading at just 7.5 times our 2002 EPS estimates and well below its book value. Accordingly, we believe Old Dominion represents a good value for investors capable of assuming the risk of a small cap stock.

TWST: Jason, how do you read investor sentiment today?

Mr. Seidl: Most of the investors I speak to are pretty cautious. As Scott alluded to, you do have some people looking to make intra-day trades on names. It all boils down to a timing issue now. Many investors are asking when to get into the transport group. As I mentioned before, we are fairly neutral on most names in our universe of railroad and trucking stocks. You can say that we have raised a yellow flag for caution.

1) Transportation/Rails, Truckers & Freight Forwarder - In an in-depth (14,900 words) Analyst Roundtable, Scott D. Flower, Managing Director at Salomon Smith Barney, Jason Seidl, Vice President at ABN AMRO and Edward Wolfe, Senior Managing Director at Bear, Stearns & Co., examine the outlook for the sector including performance of the transportation stocks, rising insurance rates and share specific stock recommendations.

2) The TWST confidential Off-The-Record survey of management performance at twelve sector firms asked market insiders about the ability of management teams to create shareholder value.

3) Airfreight & Logistics Stocks - In an in-depth (6,100 words) Analyst Interview, Gregory E. Burns, Vice President and Research Analyst at J.P. Morgan, examines the outlook for the sector and shares specific stock recommendations.

4) Outlook for Logistics Stocks - In an in-depth (5,100 words) Analyst Interview, John L. Barnes, III, Senior Analyst at Deutsche Banc Alex. Brown, examines the outlook for the sector and shares specific stock recommendations.

5) CEO interviews (average 2,500 words). Top management of seven sector firms examine the outlook for their firm and the sector.