Profile: Pacer International, Inc. (PACR.O)

Pacer International, Inc. (Pacer International) is a asset-light North American logistics provider. The Company provides transportation and logistics services to numerous Fortune 500 and multi-national companies, including Big Lots, C.H. Robinson, General Electric, Sony, Union Pacific, Toyota and ConAgra, which together represented approximately 18.7% of its revenues for the fiscal year ended December 26, 2008 (fiscal 2008), as well as to numerous third party transportation companies, including intermodal marketing companies. The Company provides its transportation services from two operating segments, its intermodal segment, which provides intermodal transportation services principally to transportation intermediaries, beneficial cargo owners and international shipping companies who utilize intermodal transportation, and its logistics segment, which provides truck brokerage, truck transport, supply chain management services, freight forwarding, ocean shipping and warehousing and distribution services to a range of end user customers. The logistics segment consists of the business units; Highway Brokerage, Truck Services, International shipping, Non-Vessel Operating Common Carrier (NVOCC) and Freight Forwarding services, Warehousing and Distribution Services and Supply Chain Management Services. In August 2009, the Company announced the sale of certain assets of its specialized heavy-haul trucking operation to subsidiaries of Universal Truckload Services, Inc.

Intermodal Services

The Company’s intermodal marketing unit, which is a division of its Pacer Transportation Solutions subsidiary, arranges for and optimizes the movement of its end user customers freight in containers and and trailers throughout North America using truck and rail transportation. The Company provides box capacity, drayage capacity, door-to-door shipment management for its intermodal customers. Pacer International’s rail brokerage operations are based in Rutherford, New Jersey, Dublin, Ohio, Jacksonville and Florida. The Company’s Stacktrain unit is engaged in the development and use of double-stack intermodal equipment and methodologies. Double-stack intermodal transportation consists of the movement of cargo containers stacked two high on special railcars.

The Company sells intermodal service primarily to intermodal marketing companies, truck brokerage companies, truckload carriers, large automotive intermediaries and international shipping companies, as well as to its own wholly-owned internal intermodal marketing company. Pacer International offer both ramp-to-ramp services (rail only services), as well as a door-to-door service offering called PacerDirect . During fiscal 2008, the Company’s equipment fleet consisted of 1,849 double-stack railcars, 28,681 containers and 29,904 chassis. The Company’s subsidiary Pacer Cartage, Inc., provides local truck transportation (also called local cartage or drayage) in and around United States cities, rail ramps and ports.

Logistics Services

Pacer International through its highway brokerage unit, which is a division of Pacer Transportation Solutions subsidiary, arranges the movement of freight in containers or trailers by truck using a network of over 10,000 independent trucking companies. It provides highway brokerage services throughout North America through its customer service centres in Rutherford, New Jersey, Dublin and Ohio. The Company’s separate truck services unit, Pacer Transport, Inc., provides dry van, flatbed and heavy-haul trucking services on behalf of its customers.

Pacer International as an international freight forwarder, its subsidiary, RF International, Ltd., provides freight forwarding and customs brokerage services that involve transportation of freight into or out of the United States. As a NVOCC, the Company’s subsidiary Ocean World Lines, Inc., manages international shipping for its customers and provides or connects them with the range of services necessary to run a global business. It also provides airfreight forwarding services as an indirect air carrier. The Company also provides customs brokerage services to direct domestic importers in connection with many of the shipments that it handles as a NVOCC, as well as shipments arranged by other freight forwarders, NVOCC or vessel operating common carriers.

Pacer International’s warehousing and distribution unit, Pacer Distribution Services, Inc., primarily provides servicing the needs of importers looking to move their goods in a timely manner, either directly to a retailer or to an inland distribution point. The Company’s subsidiary, PDS Trucking, Inc., manages a trucking fleet of over 100 owner-operators, many of whom service the Southern California ports on a daily basis. Pacer International uses the information from its advanced information system to provide consulting and supply chain management services to the customers. These services, offered through Pacer Transportation Solutions subsidiary, allow the customers to realize cost savings and concentrate on their competencies by outsourcing to the management and transportation of their materials and inventory throughout their supply chain. The Company also manages warehouses, distribution centres and other facilities for selected customers.

The Company competes with Union Pacific, CSX Intermodal, J.B. Hunt Transport, Hub Group, C.H. Robinson, Exel, Alliance Shippers, Burlington Northern Santa Fe and the supply chain solutions divisions of Ryder and Menlo.