1 Transportation Analysis JJ Cavanaugh Desirae Dunn Josh

1 Transportation Analysis JJ Cavanaugh Desirae Dunn Josh Powell

2 What We Are Trying to Accomplish • Overview ▫ ▫ ▫ Total Spend By Mode By OD Pair Carriers in Each Mode Average Shipment Sizes • Consolidation Opportunities ▫ LTL Improvements Introduction Overview Opportunities Summary

3 Overview Introduction Opportunities Summary

4 Spend by Mode SP 10. 43% IM Air 3. 40% 0. 15% Spend LTL $100, 320, 342 TL $44, 099, 975 SP $17, 519, 928 IM $5, 712, 837 Air $257, 283 Total $168, 000 Introduction TL 26. 26% Overview Opportunities LTL 59. 75% Summary

5 Most Valuable Carriers 1 Most Variable Carriers Other 2 3 4 5 6 7 $32, 036, 302 19% 8 9 10 11 12 13 $135, 874, 062 81% 14 15 16 17 Introduction Overview Carrier Name USF HOLLAND INC SOUTHEASTERN FREIGHT LINES INC CROUSE CARTAGE NEW PENN MOTOR EXPRESS OLD DOMINION FREIGHT LINE INC Freight Paid $ 32, 202, 459 LTL $ 20, 484, 588 $ 17, 013, 543 $ 13, 546, 279 LTL TL SP $ 6, 207, 804 TL U S XPRESS ENTERPRISES INC $ USF BESTWAY $ AMERICAN FREIGHTWAYS INC $ WATKINS MOTOR LINES INC $ BULLOCKS EXPRESS TRANS INC $ VIKING FREIGHT SYSTEM $ USF REDDAWAY TRUCK LINE $ ESTES EXPRESS LINES INC $ CARTER & SONS FREIGHTWAYS INC $ SWEENEY TRANSPORTATION $ PRESTON TRUCKING CO $ RC TRANSPORT $ Opportunities Carrier Type 5, 647, 193 5, 554, 183 LTL TL 4, 910, 105 4, 824, 316 TL LTL 3, 617, 057 3, 573, 925 3, 441, 433 3, 421, 973 LTL IM LTL 3, 358, 866 2, 949, 194 2, 568, 849 2, 552, 284 LTL LTL Summary

6 Top Carriers LTL CARTER & SONS SWEENEY FREIGHTWAYS ESTES EXPRESS TRANSPORTATION INC USF REDDAWAY LINES INC BULLOCKS 3% 3% TRUCK LINE 3% EXPRESS TRANS 3% INC 4% WATKINS MOTOR LINES INC 5% U S XPRESS ENTERPRISES INC 6% Introduction SOUTHEASTERN FREIGHT LINES INC 20% Overview Other 20% USF HOLLAND INC 32% Opportunities The top 9 out of 41 carriers have approximately 80% of LTL spend These are our A and B Customers Summary

7 Top Carriers TL A DUIE PYLE INC 5% AMERICAN FREIGHTWAYS INC 11% Other 18% CROUSE CARTAGE 39% USF BESTWAY 13% Top 5 out of 36 carriers have approximately 80% of TL spend These are our A and B customers OLD DOMINION FREIGHT LINE INC 14% Introduction Overview Opportunities Summary

8 Other Carrier Modes • Small Parcel ▫ Top carrier is responsible for approximately 77% of SP spend • Intermodal ▫ Top carrier is responsible for approximately 63% of IM spend • Air ▫ Top carrier is responsible for approximately 52% of Air spend Introduction Overview Opportunities Summary

9 Top Carriers by Loads Moved 30000 Our top 19 carriers handle 80% of the loads moved 25000 15000 Number of Loads 10000 5000 This is only 21% of our total carriers This is directly related to most valuable carriers M E SE S F CR L N SE PM TN E O T 1 D F U L SX AR I W FW W A RE T T EX L L SW A E BE Y X RC T T CF V FW N M T PY F L VI E KN VE RN 0 H Loads 20000 Carrier SCAC Codes Introduction Overview Opportunities Summary

10 Top LTL Carriers by Loads Moved 30000 25000 Loads 20000 15000 Number of Loads 10000 Top 10 carriers handle 80% of loads moved 5000 0 HMES SEFL USXI WWAT RETL EXLA SWEY BEXT RCTV CFFW Carrier SCAC Codes Introduction Overview Opportunities Summary

11 Top TL Carriers by Loads Moved 16000 14000 The top 6 carriers handle 80% of loads moved 12000 Loads 10000 8000 Number of Loads 6000 This is only 17% of TL carriers 4000 2000 0 CRSE TNT 1 ODFL ARFW PYLE CRCR Carrier SCAC Codes Introduction Overview Opportunities Summary

12 Opportunities Introduction Overview Summary

13 Spend by Lane • Top 3 OD Pairs 1. Cranbury, NJ to Charlotte, NC � Approximately $735, 000 2. Cleveland, OH to Milton, PA � Approximately $546, 000 3. Macon, GA to Charlotte, NC � Approximately $492, 000 Introduction Overview Opportunities Summary

14 Step by Step Analysis Mode LTL LTL Origin City CLEVELAND Origin State OH OH OH Dest City MILTON Consolidate 3 LTL shipments into 1 TL shipment Dest State PA PA PA Ship Date 5/12/1999 5/13/1999 Weight (Lbs) 4, 242 6, 606 5, 050 Spend $6, 857. 00 $7, 461. 00 $1, 138. 00 3 LTL shipments total cost $15, 456. 00 -1 TL shipment total cost $ 616. 00 -Stoppage Fee for TL (2) $ 100. 00 Total Money Saved $14, 740. 00 3 LTL shipments total cost $15, 456. 00 -1 TL shipment total cost $ 454. 00 -Stoppage Fee for TL (2) $ 100. 00 Total Money Saved Mode Origin City Origin State Dest City $14, 902. 00 Dest State Ship Date Weight Spend (Lbs) TL CLEVELAND OH MILTON PA 5/13/1999 15, 898 $716. 00 TL CLEVELAND OH MILTON PA 5/13/1999 15, 898 $554. 02 Introduction Overview Opportunities Summary

15 Consolidation Opportunities 1. Cranbury, NJ to Charlotte, NC � Consolidated 152 shipments into 51 shipments 2. Cleveland, OH to Milton, PA � Consolidated 78 shipments into 27 shipments 3. Macon, GA to Charlotte, NC � Consolidated 98 shipments into 36 shipments Introduction Overview Opportunities Summary

16 Carrier Consolidation • Drop carriers carrying less than 1% of freight paid ▫ Give this business to those carrying top 80% • LTL ▫ Will reduce number of carriers from 41 to 14 • TL ▫ Will reduce number of carriers from 36 to 12 Introduction Overview Opportunities Summary

17 Current Spend vs. Consolidated Spend $ 800, 000. 00 $ 700, 000. 00 $ 600, 000. 00 $ 500, 000. 00 Current Spend $ 400, 000. 00 Consolidated Spend Sensitivity $ 300, 000. 00 Current spend could be drastically reduced by consolidating LTL shipments into TL shipments $ 200, 000. 00 $ 100, 000. 00 $Cranbury, NJ to Charlotte, NC Introduction Cleveland, OH to Milton, PA Macon, GA to Charlotte, NC Overview Opportunities Summary

18 Savings $ 700, 000. 00 NJ – NC $621 K $644 K $ 600, 000. 00 $ 500, 000. 00 $ 400, 000. 00 Savings OH – PA $490 K $503 K Savings 2 $ 300, 000. 00 GA – NC $429. 5 K $ 200, 000. 00 $ 100, 000. 00 $Cranbury, NJ to Charlotte, NC Introduction Cleveland, OH to Milton, PA Macon, GA to Charlotte, NC Overview Opportunities Summary

19 S. W. O. T. Analysis of Consolidation • Strengths ▫ Substantial savings ▫ Manage less carriers • Weaknesses ▫ Higher lead times • Opportunities ▫ Possibly better rates from top carriers • Threats ▫ Top carriers may not run certain routes that smaller carriers do Introduction Overview Opportunities Summary

20 Summary Introduction Overview Opportunities

21 Summary • LTL shipments are the largest percentages of our costs ▫ Consolidation is key ▫ Reduces costs • Remove unnecessary carriers ▫ Give top carriers a reason to meet your demands • 80/20 rule ▫ More volume = Better service and better rates

22 Questions