Freight Market Intelligence

Transcription

1 Freight Market Intelligence A Better Way to Control Transportation Costs March 29, 2012 CHAINalytics

2 Today s Speakers Rob Hair Sr. Director, Global Transportation Processes & Systems Rodney Noble Sr. Director, Carrier Operations & Procurement CHAINalytics Gary Girotti Vice President, Transportation Practice Fabrizio Brasca Vice President, Global Logistics Moderator Michael Levans Group Editorial Director, Supply Chain Group 2

3 Agenda Introduction to Chainalytics Freight Market Intelligence Consortium Overview of PepsiCo s Transportation Procurement Model How Freight Market Intelligence Enhances PepsiCo s Procurement Process Discussion 3

4 Who is Chainalytics? Our Genesis Market Lacked Proven, Focused Supply Chain Analytics Competence Best Analytical Minds in Supply Chain 1 st Named to 100 Great Supply Chain Partners List by SupplyChainBrain; Recognized for 8 Years Running Launch of Freight Market Intelligence Consortium (FMIC) Mike Kilgore named a Pro to Know by Supply & Demand Chain Executive; Jeff Metersky (2006), Gary Girotti (2007), Steve Ellet (2011), Irv Grossman (2011), and Kevin Zweier (2012) also named Pros to Know Established Chainalytics India Private Limited in Bangalore FMIC named Top Supply Chain Innovation by Supply & Demand Chain Executive Named to ARC Advisory s 10 Coolest Supply Chain Boutiques TODAY More than 180 Clients 14 of AMR s Top 25 Supply Chains 5 of Top 10 Retailers 7 of Top 10 Food & Beverage Manufacturers 5 of Top 10 CPG Companies Transportation Practice Best Practice & System Assessment Mode Analysis vs. Procurement Launch of Sales & Operations Variability Consortium (S&OVC) Strategic Growth via Mergers & Acquisitions o Supply Chain Operations (Chainnovations) o Packaging Optimization (Adalis Packaging Solutions Group) Business Intelligence Freight Market Intelligence Consortium Membership-Based Consortium for All Major Modes of Transportation (TL, LTL, Ocean, and Air) $19B Annual Freight Spend from 100+ Customers in All Major Industry Sectors Robust Technology 4

5 Freight Market Intelligence Consortium Truckload Member Demographics Model Statistics of January 2012 Release $15B in Transportation Spend 12M Truck Loads 91 Model Participants with TL Spend from $10M to $500M+ Includes USA, Canada and In and Out of Mexico 7 Models (Dry Van, Temperature- Controlled, Intermodal, Flatbed, 3 Short Haul) Equivalent to Approximately 7% of Total North American For-Hire Truckload Market 5

6 Sample Market Insights: Lane Specific Analysis and Market Trends Over Time Origin City Origin State Origin ZIP Destination City Dest State Dest ZIP Distance (miles) Annual Volume Average Reported CPL Reported Annual Linehaul Cost Fuel Surcharge Paid by Company Fuel Surcharge Paid by Market Fuel Surcharge Difference Total CPL paid by Company (Avg. Reported CPL + Fuel Surcharge) Estimated CPL (Including Fuel Surcharge) Difference CPL (Including Fuel Surcharge) Difference Percent (Including Fuel Surcharge) CA MD 2, $ 3,692 $ 764,333 $ 1,178 $ 1,244 $ (66) $ 4,870 $ 5,240 $ (370) -7.06% BELOW CA OH 2, $ 2,569 $ 231,193 $ 1,046 $ 1,104 $ (58) $ 3,615 $ 4,432 $ (818) % BELOW CA OH 2, $ 3,142 $ 933,230 $ 1,047 $ 1,105 $ (58) $ 4,189 $ 4,435 $ (247) -5.56% BELOW IL OH $ 599 $ 599 $ 121 $ 128 $ (7) $ 720 $ 683 $ % ABOVE TX MA 2, $ 3,466 $ 180,227 $ 1,031 $ 1,089 $ (58) $ 4,497 $ 4,594 $ (97) -2.10% AT CA WA 1,093 1 $ 1,958 $ 1,958 $ 470 $ 496 $ (26) $ 2,428 $ 2,449 $ (21) -0.84% AT IL MO $ 580 $ 580 $ 121 $ 128 $ (7) $ 701 $ 655 $ % ABOVE IL OH $ 600 $ 600 $ 118 $ 125 $ (7) $ 718 $ 672 $ % ABOVE NJ OH $ 500 $ 500 $ 259 $ 274 $ (14) $ 759 $ 778 $ (19) -2.40% AT NV GA 2,545 1 $ 3,519 $ 3,519 $ 1,094 $ 1,155 $ (61) $ 4,613 $ 4,576 $ % AT OH VA $ 1,113 $ 4,450 $ 236 $ 249 $ (13) $ 1,348 $ 1,337 $ % AT IL MO $ 580 $ 580 $ 120 $ 127 $ (7) $ 700 $ 652 $ % ABOVE Status (Including Fuel Surcharge) Comparing Metrics: RPM vs. Market Position (Week 1 Index) 2011 YOY Average TL Rates per Mile increased by more than 6%. Actual Price per Equivalent Load only increased by about 3%. 6

7 Sep-10 Oct-10 Sep-10 Nov-10 Oct-10 Dec-10 Nov-10 Dec-10 Jan-11 Jan-11 Feb-11 Feb-11 Mar-11 Mar-11 Apr-11 Apr-11 May-11 May-11 Jun-11 Jul-11 Aug-11 Jun-11 Jul-11 Aug-11 Sep-10 Sep-10 Oct-10 Oct-10 Nov-10 Nov-10 Dec-10 Dec-10 Jan-11 Jan-11 Feb-11 Feb-11 Mar-11 Mar-11 Apr-11 Apr-11 May-11 May-11 Jun-11 Jun-11 Jul-11 Jul-11 Aug-11 Aug-11 Sample Network Insights: Carrier Profile $3.80 DOE Price, Data requested from 10/1/2010 to 9/30/2011) XYZ Inc Annual Truckload Model 2 Carrier Report Annual Truckload Model Annual Annual Carrier Truckload Truckload Report Model Model 2 Carrier Report Carrier Shipment Statistics Carrier Carrier Report Report Estimated Costs and Market Position XYZ Inc. XYZ Inc. Reported Annual Estimated Annual Annual Cost Difference Minimum Average Maximum Number of % Reported Status Annual Cost Cost Difference Percent (FSC $3.80 DOE SCAC Price, Data Weekly requested from Weekly 10/1/2010 to 9/30/2011) Weekly weeks XYZ XYZ Inc. Weeks Inc. (Including Fuel $3.80 DOE Price, Data requested from 10/1/2010 to 9/30/2011) Volume (Including Fuel (Including Fuel (Including Fuel (Including Fuel Carrier Volume Volume Volume w/volume w/volume Surcharge) (FSC DOE $3.80 Price, DOE Data Price, requested Data requested from 10/1/2010 from Shipment 10/1/2010 to 9/30/2011) to Statistics 9/30/2011) Estimated Surcharge) Costs and Market Surcharge) Position Carrier Shipment Statistics Estimated Costs and Market Position Surcharge) Surcharge) Carrier Carrier Shipment Shipment Statistics Statistics Reported Annual Estimated Costs Annual and and Annual Market Cost Position Difference Minimum Average Maximum Number of % Reported XYZ Inc Reported 100% Annual Estimated 3,860 Annual $ Annual 4,781,807 Cost $ Difference Status Minimum Average Maximum Number of % Reported Annual Cost Cost Difference Percent 4,853,526 $ (71,719) -1% AT Co_Id SCAC Weekly Weekly Weekly weeks Weeks Status Annual Reported Reported Cost Annual Annual Estimated Estimated Cost Annual Annual Difference Annual Annual Cost Cost Percent Difference (Including Fuel XYZ Co_Id Inc. SCAC Weekly Minimum Minimum 2 Weekly Average Average 3 Weekly Maximum Maximum 9 Number weeks Number of of 18% Weeks Reported % Reported Volume (Including Fuel (Including Fuel (Including Fuel (Including Fuel % 462 $ 1,255,699 $ 1,260,658 (Including Status Volume Volume Volume w/volume w/volume $ Fuel Volume Annual Annual (Including Cost Cost Fuel (Including Cost Cost Fuel (Including Difference Fuel (Including Percent Fuel Surcharge) (4,958) 0% AT Co_Id Co_Id SCAC SCAC Volume Weekly Weekly Volume Weekly Weekly Volume Weekly Weekly w/volume weeks weeks w/volume Weeks Weeks Surcharge) Surcharge) Surcharge) Surcharge) (Including Surcharge) Fuel Volume Volume Fuel (Including XYZ Inc Surcharge) (Including Fuel Fuel 100% 4,946 Surcharge) (Including Fuel Fuel $ 12,156,167 Surcharge) (Including Fuel (Including $ Surcharge) Fuel Volume Volume Volume Volume Volume Volume w/volume w/volume w/volume w/volume 11,397,639 Surcharge) $ 758,528 7% ABOVE XYZ Inc % 3,860 $ Surcharge) 4,781,807 $ Surcharge) 4,853,526 Surcharge) $ (71,719) Surcharge) -1% AT XYZ Inc. Inc % 53 3,860 $ 100% 4,781,807 $ 7,569 4,853,526 $ $ 7,125,551 (71,719) $ 7,433,016-1% AT $ (307,465) -4% BELOW XYZ Inc. XYZ Inc % 100% 3,860 3, $ $ 4,781,807 1,255,699 $ $ $ 4,853,526 1,260,658 $ $ $ (71,719) (4,958) -1% AT 0% AT XYZ Inc % 462 $ 1,255,699 $ 1,260,658 $ (4,958) 0% AT XYZ Inc. XYZ Inc % 100% , $ $ 100% 12,156,167 1,255,699 $ 2,840 $ $ 1,260,658 11,397,639 $ $ 3,272,128 $ $ (4,958) 758,528 $ 3,586,608 0% AT 7% ABOVE $ (314,480) -9% BELOW XYZ Inc % 4,946 $ 12,156,167 $ 11,397,639 $ 758,528 7% ABOVE % 4,946 $ $ $ XYZ Inc. XYZ Inc % 17 7,569 4,946 $ 12,156,167 32% 7,125,551 $ $ 11,397, ,433,016 $ $ $ 758,528 26,810 (307,465) 7% $ 26,224-4% ABOVE BELOW XYZ Inc % 7,569 $ 7,125,551 $ 7,433,016 $ (307,465) -4% BELOW $ 586 2% AT XYZ Inc. XYZ Inc % 100% 7,569 2,840 7,569 $ $ 7,125,551 3,272,128 $ $ $ 7,433,016 3,586,608 $ $ $ (307,465) (314,480) -4% -9% BELOW BELOW XYZ XYZ Inc. Inc. Inc % 100% 53 2,840 2,840 $ $ 100% 3,272,128 $ $ 720 3,586,608 $ $ $ 873,428 (314,480) $ -9% 904,858 BELOW $ (31,430) -3% BELOW XYZ Inc. XYZ Inc % 100% 2, $ 3,272,128 26,810 $ $ 3,586,608 26,224 $ $ (314,480) 586-9% BELOW 2% AT XYZ XYZ Inc. Inc % % $ $ 26, % $ $ 26,224 8,892 $ $ 14,959,787 $ 586 2% $ 14,989,016 AT XYZ Inc. XYZ Inc % 32% $ 873,428 26,810 $ $ 26, ,858 $ $ (31,430) 586 2% -3% AT BELOW $ (29,230) 0% AT XYZ Inc % 720 $ $ 873,428 $ $ 904,858 $ $ (31,430) -3% BELOW XYZ Inc. XYZ Inc % 100% 52 8, $ 98% 14,959, ,428 $ $ ,989, ,858 $ $ 1,579,289 $ (31,430) (29,230) -3% BELOW $ 1,551,672 0% AT XYZ Inc. $ 27,617 2% AT XYZ Inc % 100% 8,892 8,892 $ $ 14,959,787 14,959,787 $ $ 14,989,016 14,989,016 $ $ (29,230) (29,230) 0% 0% AT AT XYZ XYZ Inc. Inc. Inc % 98% $ 100% 1,579,289 1,579,289 $ $ 635 1,551,672 1,551,672 $ $ $ 599,163 27,617 27,617 $ 2% 689,347 AT 2% AT XYZ Inc % 865 $ 1,579,289 $ 1,551,672 $ 27,617 2% AT $ (90,185) -13% BELOW XYZ XYZ XYZ Inc. Inc. Inc Weekly Percent % 100% to Market $ 100% 599, ,163 $ $ 3, , ,347 $ $ $ 4,910,758 (90,185) (90,185) $ -13% 5,062,026 BELOW XYZ Inc % 635 $ 599,163 $ 689,347 $ (90,185) -13% BELOW $ (151,268) -3% BELOW XYZ XYZ Inc. Inc Weekly Weekly Percent Percent to to to Market Market % 100% 3,585 3,585 $ $ 4,910,758 4,910,758 $ $ $ 5,062,026 5,062,026 $ $ $ (151,268) -3% -3% BELOW XYZ Inc XYZ Inc Weekly Average 14 Percent 97 to Market % 3,585 $ 4,910,758 $ 5,062,026 $ (151,268) Fuel at Per Mile 87% at 87% $ DOE $ $ 1,311,745 87% $ $ 627 $ $ $ 1,311, ,030 $ Absolute Absolute -3% BELOW 1,043,715 Weekly Weekly 26% ABOVE $ Market Market 268,030 Position Position XYZ Inc % 1,311,745 $ 1,043,715 $ 268,030 26% ABOVE 26% ABOVE XYZ Inc. 12 Average Average - Fuel Per Mile at $3.80 DOE % 730 $ $ $120, ,610 $ (33,160) % 730 $ 513,450 $ $120,000-6% BELOW XYZ XYZ Inc. 35% Inc. 35% Average Fuel 14 Fuel Per Per Mile 54 Mile at at $3.80 $ DOE DOE 87% 627 $ 1,311,745 $ 1,043,715 $ 268,030 26% ABOVE % 100% $ 513, ,450 $ $ $120,000 $120,000 XYZ Inc. 35% % 730 $ $ 546,610 $ (33,160) -6% BELOW 30% % 26,059 $ TNTI_ 513,450 $ 546,610 $ (33,160) -6% BELOW $120, ,610 $ (33,160) -6% BELOW TNTI_ Car3 30,249,440 $ 31,149,423 $ (899,983) -3% BELOW Car3 XYZ XYZ Inc. Inc. Inc % % 100% 5326,059 $ TNTI_ TNTI_ TNTI_ TNTI_ 100% $ 26,059 $ TNTI_ 30% 30% Car3 $ 31,149,423 XYZ Inc % 6,661 $ 12,957,732 $ 13,458,719 $100,000 $ $ Car3 30,249,440 (899,983) $ 31,149,423-3% BELOW $ (899,983) -3% BELOW Car3 XYZ Inc % 26,059 $ TNTI_ TNTI_ 30% Car3 30,249,440 $ 31,149,423 $ (899,983) -3% BELOW Car3 $ (500,988) -4% BELOW XYZ XYZ Inc. Inc. 25% % 100% 6,661 $ $ $ $100,000 XYZ Inc % 6,661 $ 12,957,732 $ 13,458,719 $100,000 $ $ $ (500,988) (500,988) XYZ Inc % 53 1,216 $ RTS_ 100% 1,998,122 $ 6,661 2,163,900 $ 12,957,732 $ (165,778) $ 13,458,719 $100,000-4% -4% BELOW BELOW RTS_W 25% 25% 25% -8% BELOW Car12 $ (500,988) -4% BELOWCar12 XYZ Inc. 20% 25% $80,000 AL RTS_W XYZ XYZ Inc. Inc. XYZ Inc % 100% 100% 1,216 1,216 1,968 $ $ $ RTS_ 2,381,559 $ $ $ 2,380,354 $ $ $ (165,778) 1,205 0% -8% BELOW AT XYZ Car12 RTS_ 1,998,122 $ 2,163,900 $ (165,778) -8% BELOW Car12 Car12 RTS_W 100% 1,216 $ RTS_ 1,998,122 $ 2,163,900 $ (165,778) -8% BELOW XYZ Inc. 20% $80,000 AL XYZ Inc. 20% $80,000 AL Inc. XYZ Inc. 20% % % 100% 1,968 3,475 $ $80,000 AL % 1,968 $ $ 2,381,559 4,763,127 2,381,559 $ $ $ $ 4,999,324 2,380,354 Car12 $ $ $ $ (236,197) 1,205 1,205 20% $80,000-5% 0% AT 0% AT BELOW GRDN_ GRDN $60, Car20 Car20 XYZ XYZ Inc. Inc. 15% 15% XYZ Inc % 100% 3,475 1,960 3,475 3,475 $ $ $ _ 100% 4,763,127 3,085,733 4,763,127 $ $ 1,968 $ $ 2,715,967 4,999,324 $ $ $ 2,381,559 $ 369,765 $ 2,380,354 14% -5% GRDN_ ABOVE BELOW GRDN_ $ 1,205 0% AT 10% Car20 GRDN $60,000 $ (236,197) -5% BELOW GRDN_ 15% GRDN $60,000 Car20 Car20 XYZ XYZ Inc. Inc. XYZ Inc % 100% 1,960 1,960 $ $ $ _ 3,085,733 _ 3,085,733 $ $ $ 2,715,967 $40,000 2,715,967 $ $ $ 369,765 14% 14% ABOVE ABOVE EPES_ XYZ Inc. 15% % 3,475 $ 4,763,127 $ 4,999,324 $ (236,197) -5% BELOW Car25 10% 10% 10% 5% EPES_ Car25 Car20 GRDN $60,000 $40,000 $40,000 $40,000 Car25 EPES_ Car25 EPES_ EPES_ XYZ 5% Inc. 5% 5% EPES_ EPES_ 100% 1,960 $20,000 $ _ 3,085,733 $ 2,715,967 $ 369,765 14% ABOVE 0% Car25 Car25 10% $20,000 0% $20,000 $20,000 0% 0% $0 $40,000 1,000 5% 1.2 $0 EPES_ $5,000, ,000 TNTI_W Car3 $0 $0 Car25 $4,500,000 1, AL 1.2 $5,000, TNTI_W $20,000 $5,000,000 $4,000,000 $5,000, % TNTI_W TNTI_W Car3 Car3 $4,500, RTS_WA AL $4,500,000 Car12 Car3 1 $3,500,000 $4,500, AL AL 0.8 L 1 1 $4,000, $4,000,000 $3,000,000 $4,000, RTS_WA 700 RTS_WA Car $0 $2,500, ,000 Car12 $3,500,000 GRDN_ RTS_WA 0.8 $3,500,000 L L Car20 Car $3,000,000$3,500, L 1.2 $3,000,000 $2,000,000 $3,000, $2,500, GRDN_ 0.6 TNTI_W $1,500, GRDN_ 0.6 EPES_W Car3 $2,500,000 $2,500, Car20 GRDN_ $2,000, AL 100 Car20 Car25 $1,000,000 Car $2,000, $1,500,000$2,000, $500,000 - EPES_W $1,500, $1,500, Car25 EPES_W AL 0.2 $1,000,000 0 Car12 RTS_WA $- 100 Car25 EPES_W 600 AL $1,000, Car25 $500,000 $1,000,000 - AL L $- $500,000 - $500, $- 0.6 $- 400 Weekly Volume GRDN_ Car20 Cumulative Market Position 300 Weekly Volume Weekly Cumulative Market Position Volume EPES_W 100 Car25 Cumulative AL 0.2 Cumulative Market Market Position Position - 0 Sep-10 Sep-10 ep-10 Oct-10 Oct-10 ct-10 Nov-10 Nov-10 Dec-10 Dec-10 ov-10 Jan-11 Jan-11 ec-10 Feb-11 Feb-11 an-11 Mar-11 Mar-11 Apr-11 eb-11 Apr-11 May-11 May-11 ar-11 Jun-11 Jun-11 pr-11 Jul-11 Jul-11 Aug-11 ay-11 Aug-11 un Annual Truckload Model 2 Jul-11 ug-11 Sep-10 Sep-10 Oct-10 Oct-10 Nov-10 Nov-10 Dec-10 Dec-10 Jan-11 Jan-11 Feb Feb-11 Mar-11 Mar-11 t-10 Apr-11 Apr-11 May May-11 Jun Absolute Weekly Market Positi Jun-11 Jul Jul-11 Aug-11 Aug r-11 Car12 Car20 Car25 r

8 Overview of PepsiCo s Transportation Procurement Model 8

9 PepsiCo Network Overview We are a Shipper We are a Carrier 9

10 Global Transportation Procurement Model Overview The Transportation Procurement Model is a comprehensive strategy of five interlocking capabilities to own "all that moves" within your supply chain. Goal: deliver the least landed cost at a best-in-class service level through an uninterrupted supply chain. Least landed cost Best-in-class service levels Uninterrupted supply chain 10

11 Each step of procurement model has distinct purpose... Get what you pay for 11

12 ...and drives ability to deliver all other capabilities Example: Market knowledge elevates other components of model How have our forecast volumes been affected by transportation market conditions? What rate increases can we expect? Are our carriers equipped to handle new regulations? Are we at, below, or above market rates? 12

13 Market Knowledge Goal Procurement Activities Understand your transportation market Data gathered and analyzed Carrier rates Fuel prices Carrier input prices Capacity Driver availability & wages Regulatory trends Developed point of view on transportation market 1 Leverage Expansive Network to Understand or Benchmark Similar Lane Rates 2 Use Strategic Carrier Network to Benchmark Market Rates in Any Given Lane or Region PepsiCo Network 13

14 Output Inputs Market Knowledge: Sample Tools & Resources Industry Lane Rate Benchmarks FMIC BATCH UPLOAD TEMPLATE FOR TRUCKLOAD SHIPPERS 3 Leverage Chainalytics Freight Market Intelligence Resources FMIC FUEL PROGRAM MODEL FUEL PRICE $ 4.00 MODEL TYPE BASE ESCALATOR SURCHARGE (per mile) ADJUSTED FMIC FMIC FSC (per mile) FSC (per mile) LHDV LHTC LHIM LHFB SHDV SHTC SHFB USER DEFINED FUEL PROGRAM CURRENT FUEL PRICE $ 4.10 DISTANCE or Origin Origin Annual MODEL TYPE PERCENTAGE Temp BASE ESCALATOR Additional SURCHARGE Optional FSC Optional Estimate Destination Destination Distance Route Equipment Service Movement Contract RATE Postal Countr Lane Mode ID BASED? Control Corridor Per Load Per Mile Postal Code Country (Miles) Type Size Level Type Type Code y Volume Type Volume Charge Charge LHDV 0.00 LHTC US US 702 LHIM369 DM DV N 53 R OB CC US US 720 LHFB 413 DM TC F 48 R OB SM US US DM TC F 53 R OB CC SHDV US US DM DV N 53 R IB CC SHTC US US DM DV N 53 X OB CC FMIC MBBC FUEL ADJUSTED FUEL USER DEFINED 6 SHFB FUEL RATE PER MILE ADDITIONAL DATA US US MS DV N 53 R OB CC US US DM DV N 53 R OB CC Annual Estimated Annual Estimated Adjusted Fuel- User Fuel- User All-In Cost MBBC MBBC All-In Cost MBBC All- MBBC Adjusted User Fuel Benchmar Adjusted Benchmark Including Fuel Linehaul Including In CPL Fuel MBBC All- Surcharge k Linehaul MBBC Allin CPM CPM and Fuel Linehaul User-defined Price Surcharge CPL MBBC Price and Surcharge In CPL CPL Fuel Programs Programs Model Applied to Determine Estimate Error Description $ 1,607 $ 344 $ 1,263 $ 330 $ 1,593 $ 309 $ 1,284 $ 2.27 $ 1.83 $ 592,945 $ 587, July TL Long Haul Dry VOK $ 2,077 $ 382 $ 1,696 $ 367 $ 2,063 $ 317 $ 1,746 $ 2.87 $ 2.43 $ 857,898 $ 851, July TL Long Haul Tem OK $ 1,723 $ 355 $ 1,368 $ 341 $ 1,709 $ 294 $ 1,415 $ 2.55 $ 2.11 $ 752,771 $ 746, July TL Long Haul Tem OK $ 890 $ 196 $ 694 $ 188 $ 882 $ 176 $ 706 $ 2.21 $ 1.77 $ 452,230 $ 448, July TL Long Haul Dry VOK $ 534 $ 76 $ 458 $ 73 $ 531 $ - $ 531 $ 3.49 $ 3.49 $ 185,819 $ 184, July TL Short Haul Dry OK $ 585 $ 98 $ 487 $ 94 $ 581 $ - $ 581 $ 2.98 $ 2.98 $ 205,763 $ 204, July TL Short Haul Dry OK 14

15 28-Sep 28-Oct 28-Nov 28-Dec 28-Jan 28-Feb 31-Mar 30-Apr 31- May 30-Jun 31-Jul Weekly Loads Internal Business Intelligence: Overview Goal Procurement Activities Key Data Elements Know your capacity needs Volume trends and seasonality Know geographic areas historically challenged by capacity Accurate historical price, service, and bid cycle data Understand geographic capacity concerns Information management Manage inputs into worksheet or model to gather monthly volume information Leverage Chainalytics models and tools to define internal business intelligence for each business unit Weekly Loads 1,200 1, ,200 1, Total Reported Loads Per Week Total Reported Loads Per Week 0 28-Sep 28-Oct 28-Nov 28-Dec 28-Jan 28-Feb 31-Mar 30-Apr 31- May 30-Jun 31-Jul 31-Aug 15

16 Procurement Event: Overview Success Depends on the Amount of Pre-Work and Data Accuracy Goal Procurement Activities Obtain best cost and service agreements Process definition Define scope, timeline, stages, and milestones of process Identify key roles and responsibilities (internal teams and any external support) Data gathering Develop list of lanes, volumes, historic prices for bid Determine what freight you would prefer to renew and not open for bidding. Field coordination Solicit input on carrier participants based on market knowledge. Maintain continuous communication with field throughout process Carrier coordination Discuss rules of engagement with the carriers before, during and after the bid. Formalize in writing (Examples: bid timing, insurance requirements, accessorial policies) Develop and refine bids with carriers to ensure "right" service/cost mix Formalize agreements per applicable business customs/legal framework Information management Determine tool or method for bid, and maintain/monitor bids Formalized framework to define bid requirements and "host" bid 16

17 Carrier Relationships: Overview Goal Procurement Activities Develop carriers who provide strategic value Carrier Capability who will build their operation around the network Strong growth potential Can they grow with your business, and operations Proper operational authorities, insurance requirements Operations feedback on carrier performance and service Continued Carrier Relationship-building Continually meet with existing / potential carriers to understand capabilities and strategy. Establish working relationship with the carrier base. The carrier must be as familiar with our business as we are with theirs 17

18 Execution and Tracking: Overview Goal Procurement Activities Get what you pay for Continual performance feedback on execution performance Carrier performance KPI s Capacity plan performance KPI s Route Guide compliance Spot Bid results Problematic lane analysis 18

19 Discussion 19

20 Discussion Rob Hair Sr. Director, Global Transportation Processes & Systems Rodney Noble Sr. Director, Carrier Operations & Procurement CHAINalytics Gary Girotti Vice President, Transportation Practice Fabrizio Brasca Vice President, Global Logistics Moderator Michael Levans Group Editorial Director, Supply Chain Group 20

21 Thank you! CHAINalytics 21