According to Longbow Research transportation analyst Lee Klaskow, an analysis of Energy Information Administration data shows the price of diesel has declined $0.18 in the last week and 27% since July, to an average national price of $3.482 per gallon.  See summary below.  Mr. Klaskow said that despite recent moderation, prices are still 12.5% above the same period last year. Nonetheless, Mr. Klaskow said, “We continue to believe that moderating year-over-year increases in diesel prices are creating somewhat of a near-term tailwind for truckers due to marginally lower fuel costs and the one-to-two week lag in their fuel surcharge recovery programs.” In addition to slightly lower fuel costs, Mr. Klaskow noted, “The truckload industry has been benefiting from excess capacity exiting the market.  This should help provide the industry with firmer pricing, in our view.”According to the Energy Information Administration (EIA), the national average cost for on-highway diesel fuel declined $0.18 per gallon, or roughly 4.8%, to $3.482 as of October 20, compared to the prior week. • Diesel prices have now fallen by roughly 26.9% from the July 14 peak of $4.764 per gallon, but are still 12.5% above the same period last year. The year-over-year increase in average prices currently represents the lowest magnitude of increase in 2008 year to date. • Ultra low sulfur diesel fuel (ULSD) used in 2007 EPA compliant engines declined 5.8% sequentially to $3.497 per gallon as of October 20 from $3.672 the prior week. • HTLD yesterday reported 3Q08 EPS from continued operations of $0.19 (+5.5%), two cents above our estimate and consensus (includes $0.02 increased gains from the disposal of property and equipment). We have increased our 2008 EPS estimate to account for the beat but are lowering our 2009 and 2010 estimates in light of the deteriorating macroeconomic environment. Please see our October 21 note HTLD: 3Q08 Exceeds Expectations. Reiterate Buy Despite Moderating Our Outlook for more information. • Truckload-carrier WERN last week reported that 3Q08 EPS increased 5% to $0.31 from $0.30 in 3Q07 and beat consensus of $0.26. 3Q08 revenue of $584.1 million increased 15% from $510.3 million in 3Q07, just above consensus revenue of $581.1 million. WERN said that the strengthening of demand the company experienced in June 2008 did not carry into 3Q08. • UPS released on Friday new list rates for 2009, including an average increase of 5.9% for UPS Ground packages and 4.9% on air express and U.S. International shipments. UPS Freight (LTL) announced a general rate increase of 5.9%. • We continue to believe that moderating year-over-year increases in diesel prices are creating somewhat of a near-term tailwind for truckers due to marginally lower fuel costs and the one-to-two week lag in their fuel surcharge recovery programs. • HTLD yesterday reported 3Q08 EPS from continued operations of $0.19 (+5.5%), two cents above our estimate and consensus (includes $0.02 increased gains from the disposal of property and equipment). We have increased our 2008 EPS estimate to account for the beat but are lowering our 2009 and 2010 estimates in light of the deteriorating macroeconomic environment. Please see our October 21 note HTLD: 3Q08 Exceeds Expectations. Reiterate Buy Despite Moderating Our Outlook for more information. To speak with Longbow Research analysts, please contact David R. Evanson, 610-505-0832 or devanson@comcast.net.