23rd Annual Study on Trends and Issues in Logistics and Transportation. Study was completed by the Dr. Karl Manrodt, Dr. Mary Holcomb, in partnership with Con-way and CarrierDirect. Logistics Management was also a partner in the process; a webinar on the topic can be found on their website.

1. The New Rules for Winning the
Game
23rd Annual Trends and Issues in Logistics and
Transportation
Thank You to Our Respondents
We are pleased to present the findings of the 2014 Issues and
Trends in Transportation and Logistics.
Our hope is that this data will provide useful information
regarding current developments in our industry, and assist you
in better managing your organization.
Thank you again for your continued support of this research
effort.
2
Research Team
Karl B. Manrodt, Ph.D.
o Professor
o Georgia Southern University
Mary Holcomb, Ph.D.
o Associate Professor
o University of Tennessee
Tommy Barnes
o President
o Con-way Multimodal
Joel Clum
o President
o CarrierDirect
3
Agenda
! Current State of Transportation and Logistics
! The New Rules of the Game
! Winning the Game: The New “Masters of
Logistics”
4

2. The New Rules for Winning the
Game
Current State
Representing the Marketplace
Sample represents over $30.1 billion
in transportation expenditures
This is approximately
3.5% of total
transportation
expenditures
776 respondents from 16 industry sectors represented
in this study
6
7
42.7%&
Challengers Take The Lead
Annual Sales of Respondents
2.9%&
6.9%&
4.3%&
6.9%&
8.8%&
10.1%&
7.9%&
Masters&
15.3%&
10.6%&
3.2%&
11.6%&
43.1%&
11.5%&
4.8%&
9.6%&
Contenders&
0%& 5%& 10%& 15%& 20%& 25%& 30%& 35%& 40%& 45%& 50%&
>&$9&billion&
$5&5&$9&billion&
$3&5&$5&billion&
$2&5&$3&billion&
$1&5&$2&billion&
$500&million&5&$1&billion&
$250&million&5&$500&million&
<&$250&million&
2014&
2013&
Challengers&
Percent of Respondents
How Did Your Company Perform?
1
(Much Better)
2 3 4
5
(Much Worse)
Mean of Respondents
2.01&
2.47&
2.37&
2.36&
2.28&
2.39&
2.37&
2.28&
2.03&
2.38&
0& 0.5& 1& 1.5& 2& 2.5& 3&
Return&on&assets&
CompeHHve&posiHon&/&Market&share&
Revenue&growth&
Firm&profiHbility&
Customer&service&levels&
2013&
2014&
8

3. Transportation Spending Is Increasing
9
0.0%&
17.6%&
23.5%&
12.7%&
11.8%&
20.6%&
26.5%&
2.8%&
12.7%&
25.4%&
15.5%&
30.9%&
0%& 5%& 10%& 15%& 20%& 25%& 30%& 35%&
>&5%&
455%&
354%&
253%&
152%&
<&1%&
Percent'of'Respondents'
Percent'of'Sales'
2013&
2014&
TL Dominates The Transportation Budget
0.1%
0.7%
0.3%
3.1%
4.8%
5.0%
4.0%
4.0%
7.1%
5.8%
2.3%
5.7%
9.9%
9.6%
8.8%
18.5%
27.2%
0.2%
5.0%
8.4%
4.2%
14.9%
21.1%
29.1%
TL
LTL
Privatefleet
InternaHonalocean
Surfaceparcel(e.g.UPS/FedEx)
Dedicated
Smallpackage
Airfreight
Rail
Intermodal
Other:
DomesHcocean(barge)
2013
2014
0% 5% 10% 15% 20% 25% 30% 35%
10
Inventory Management is Challenging
Companies
Cash to cash
cycle
50.0 days
Average days
sales
outstanding
34.5
Inventory
turns -
finished
goods
17.5 Days sales in
finished
goods
inventory
46.3
2013
Cash to cash
cycle
47.3 days
Average days
sales
outstanding
28.5
Inventory
turns -
finished
goods
14.7 Days sales in
finished
goods
inventory
39.0
2014
11
Tough Challenges Continue
Cost to serve (distribution)
Changing customer requirements
Demand uncertainty
Inventory management
12

4. The New Rules for Winning the
Game
#1 • Pick Y our Partners Carefully
#2
• Play the Same Game
#3
• Collaboration is a Game Winning Strategy
• Mind and Mine the Gap Between Current and
#4 Desired State
#5 • Maintain a Competitive Position
13
The New Rules for Winning the
Game
#1: Pick Your Partners
Carefully
The Top Factors in Purchasing
Transportation Services
Attribute
Very high importance
Cost of service
Capacity commitments
Potential for long term relationship
Performance factors (e.g. service levels, safety record)
High importance
Ability to respond to changes
Industry trends (shortages/overcapacity)
Ease of doing business (e.g. administrative efficiency in claims
processing)
Strategic importance of the services to the overall business
Carrier’s reputation
15
TL Carriers – Creating Competitive
Advantage
A2ribute'
'''''(Scale:'195;'1='very'good;'5'='very'poor)
Top'Ranked'
Carrier
3rd'
'Ranked'
Carrier
Difference'between'
1'and'3
Transit time reliability 1.84 2.35 27.7%
Total door-to-door transit time reliability 1.89 2.31 22.2%
Equipment availability/commitment to allocated
1.87 2.53 equipment
35.3%
General flexibility (e.g. willingness to negotiate rate or
service changes)
2.13 2.5 17.4%
Bundled services (including multimodal capability) 2.24 2.72 21.4%
Freight loss and damage 1.56 2.06 32.1%
Talent of key personnel 1.84 2.52 37.0%
Technology capability 2.05 2.31 12.7%
Value-added services offered 2.18 2.68 22.9%
Ease of doing business (e.g. administrative efficiency in
1.84 2.39 claims processing)
29.9%
Commitment to sustainability 2.23 2.47 10.8%
Door-to-door competitive transportation rates or costs 2.08 2.73 31.3%
16

5. LTL Carriers – Creating Competitive
Value
A2ribute'
'''''(Scale:'195;'1='very'good;'5'='very'poor)
Top'Ranked'
Carrier
3rd''
Ranked'Carrier
Difference'between'
1'and'3
Transit time reliability 1.68 2.39 42.3%
Total door-to-door transit time reliability 1.70 2.54 49.4%
Equipment availability/commitment to allocated equipment 1.59 2.34 47.2%
General flexibility (e.g. willingness to negotiate rate or
2.16 2.49 15.3%
service changes)
Bundled services (including multimodal capability) 2.45 2.55 4.1%
Freight loss and damage 2.04 2.69 31.9%
Talent of key personnel 1.89 2.46 30.2%
Technology capability 1.91 2.36 23.6%
Value-added services offered 1.98 2.36 19.2%
Ease of doing business (e.g. administrative efficiency in
1.8 2.5 38.9%
claims processing)
Commitment to sustainability 2.13 2.58 21.1%
Door-to-door competitive transportation rates or costs 1.68 2.29 36.3%
17
The New Rules for Winning the
Game
#2: Play the Same Game
A Clear Strategic Direction
7.6%
8.2%
5.2%
12.5%
28.1%
46.0%
4.5%
15.9%
30.6%
40.4%
Mix: Be all things to all
people
Customer Service
Cost Leadership
Product / market
Other
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
innovation
2014
2013
19
Customer Satisfaction Grows in
Importance
12.0%
25.8%
32.2%
26.9%
27.2%
33.9%
12.1%
29.8%
Reduce costs
Maximize profitability
Increase customer
Maximize asset
utilization
0.0% 10.0% 20.0% 30.0% 40.0%
satisfaction
2014
2013
20

6. Shipper Strategic Framework
Demand Driven
Supply Chain Leader
Operational Excellence
Procure below
market rate
Multi-tiered Carrier Strategy
Secure carrier
capacity
Deliver on time
Integrated Processes through “Best of Breed” TMS
Talent with Transportation Expertise
21
Transportation Provider Strategic Framework
Vision
World class transportation procurement that drives
substantial value to customers and providers
Deliver value to our customers by continuously improving cost and service levels through innovative
solutions, technology, strategic sourcing and Lean process discipline
Analytical
Leverage
Infrastructure
LEAN OPERATING CULTURE:
RESPECT FOR
PLANET
OUR CORE VALUES:
Carrier
Management
Account
Engagement
CUSTOMER FIRST RESPECT FOR
PEOPLE
People
CONTINUOUS
IMPROVEMENT
Global
Deployment
SERVANT
LEADERSHIP
SAFETY LEADERSHIP INTEGRITY COMMITMENT EXCELLENCE
“What We Have Here Is A Failure
To Communicate”
38.8%
36.9%
6.5%
32.7%
23.8%
14.3%
14.3%
32.7%
0% 10% 20% 30% 40% 50%
Maximizing profitability
Increasing customer
satisfaction
Maximizing asset
utilization
Reducing costs
Carriers
Shippers
23
Shippers and Carriers: Misaligned Goals
Shipper Goals Carrier Goals
#1
Cost
Savings
#2
Reduced
Damages
#3
Improved
Visibility
#1
Profit
Improvement
#2
Packaging
Improvements
#3
Asset
Demand
Forecasting
C
O
N
F
L
I
C
T
Source: Con-way Freight, Inc.
24

7. The New Rules for Winning the
Game
#3: Collaboration is a Game
Winning Strategy
Intensity of Involvement
Do you share the same perspective as your carrier or shipper?
What are the implications if you don’t share the same perspective?
26
Shippers and Carriers:
Where They Agree
1
Strongly
agree
2 3 4 5 6 7
Strongly
disagree
Transportation services are highly
standardized
Companies rely heavily on price when
choosing a strategic/core carrier
The costs for switching significant
volumes of freight from one strategic
carrier to another are low
The process of moving to a new
strategic carrier is quick and easy
Strategic or core carriers help their
customers achieve business goals and
objectives through services provided
Represents a gap between shipper and carrier mean score of = 0.2
27
Shippers and Carriers:
Contrasting Perspectives
1
Strongly
agree
2 3 4 5 6 7
Strongly
disagree
Transportation services provided
require a great deal of specialized
knowledge
Shippers
2.62
Carriers
3.00
It is extremely difficult to standardize
processes and procedures for our
company’s transportation services
Shippers
3.47
Carriers
3.86
Strategic or core carriers have multiple
options for executing transportation
operations
Shippers
3.40
Carriers
3.86
Strategic or core carriers are the
primary source of innovation in
transportation services
Shippers
3.40
Carriers
3.86
Transportation services are identical in
quality
Shipper
3.90
Carrier
4.47
Strategic or core carriers help to create
new business opportunities
Shippers
3.07
Carriers
3.67

8. Shippers and Carriers:
Time To Talk
1
Strongly
agree
2 3 4 5 6 7
Strongly
disagree
There are no frequent changes in our
company’s mix of strategic or core
carriers
Shippers
2.81
Carriers
4.00
The requirements for our strategic or
core carriers do not frequently change
Shippers
2.55
Carriers
4.33
29
The New Rules for Winning the
Game
#4: Mind and Mine the Gaps
Between Current and Desired State
for the Winning Edge
Transportation Scorecard Results
Mixed
Mode of
Transportation 2014 2013
TL 73.1% 76.4%
LTL 78.8% 81.1%
Rail 85.5% 74.0%
Intermodal 75.8% 72.8%
Parcel 90.6% 83.0%
Data represent mean responses
31
Best Service For “Best” Customers
“Best” customer
On time delivery
Over/short/damage
Backorders
Correct invoice
Shipment complaints
Perfect order
“Average” customer
96.3
1.0
2.3
97.8
1.1
97.2
92.7
1.7
3.5
96.1
1.8
94.9
Average score = 97.8 Average score = 96.1
32

9. What Initiatives Will Enable Companies
to Increase Operational Flexibility?
Reduce supply lead time
Increase collaboration with key customers
Integrate internal processes
Increase collaboration with key suppliers
Reduce order fulfillment lead times
Reconfigure the order fulfillment process to be
more responsive to changes in demand
5.62
5.56
5.50
5.50
5.48
5.47
Scale 1 – 7; 1= Not very important; 7 = Very important
Mean score
Operating Flexibility: Initiatives Completed by
the Most Companies Over the Last 12 Months
2) Aligned labor force skills to better meet
changing demand requirements
1) Use of multiple transportation modes
3) Key customers - shared capacity forecasts and
increased collaboration
34
Operating Flexibility: Top 3 Projects
Currently Being Implemented
2) Increasing collaboration with
key suppliers
1) Integrating internal processes
3) Reducing supply lead time
35
The New Rules for Winning the
Game
#5: Maintain a Competitive
Position

10. The Global Supply Chain Execution
Challenge
37
No Overall Improvement in Domestic
Supply Chain Visibility
Supplier’s Supplier
Supplier Inbound Company Outbound Customer
5.01 3.76 2.16 2.77 3.30 3.87
NOTE: 1 = very visible; 7 = not very visible
5.
6
4.
3
4.0 3.7 3.5 4.
9
2014 Score = 20.87
2013 Score = 19.40
4.63 3.30 2.77 2.94 2.16 3.60
38
Islands of Improvement in International
Supply Chain Visibility
Supplier’s Supplier
Supplier Inbound Company Outbound Customer
5.11 3.62 2.16 2.77 3.12 3.93
NOTE: 1 = very visible; 7 = not very visible
5.
6
4.
3
4.0 3.7 3.5 4.
9
2014 Score = 20.71
2013 Score = 20.72
4.94 3.54 2.92 3.05 2.58 3.69
39
Ownership: The Preferred Option for Domestic
Transportation Management Software
Managing Domestic Transportation - 2014
10.6%
8.0%
19.9%
14.6%
23.8%
23.2%
A software package or module that is part of an ERP
A software package installed in an on-premise data center
A software package running and hosted by a 3PL
Manual methods, including those supplemented with
A software package running and hosted in the cloud
Other
0.0% 10.0% 20.0% 30.0%
spreadsheets, email or other productivity tools
Percent of respondents
40

11. Distribution Utilizes Several Approaches in
Managing Domestic Activities
Managing Domestic Distribution - 2014
2.8%
14.0%
20.6%
15.4%
21.3%
25.9%
A software package or module that is part of an ERP
A software package installed in an on-premise data center
A software package running and hosted by a 3PL
Manual methods, including those supplemented with
A software package running and hosted in the cloud
Other
0.0% 10.0% 20.0% 30.0%
spreadsheets, email or other productivity tools
Percent of respondents
41
Changes in the Procurement of
Transportation Services
Procedurally
26.7%
Contracturally
23.3%
In the last two years, our procurement of transportation services
has changed in the following ways:
Strategically
43.3%
Structurally
6.7%
42
A different focus now than in
the past such as a shift from
cost to quality of service, or
vice versa
A different purchasing process
now than in the past
With changes in areas such
as the length of contract or
specificity of service quality
With different functions
procuring transportation
services than in the past
In 2014 Who Made Transportation
Decisions?
Preparation
and solicitation
of RFQs
Carrier
Negotiations
Operational
Planning
Carrier
Performance
Evaluation
Purchasing/
Procurement 9.8% 7.4% 3.7% 3.8%
Transportation/
Logistics
63.4% 77.8% 79.0% 80.8%
Jointly by
procurement and
transportation
25.6% 11.1% 16.2% 14.1%
Other 1.2% 3.7% 1.2% 1.3%
43
Playing the Game to Win
The “Newfangled” Masters of
Logistics

12. What Will the New Masters of Logistics
Look Like?
! They choose strategic partners that make them better
! They work with their strategic partners to develop a plan
for achieving their respective goals
! They identify the gaps between current and desired future
practices for both parties
! They develop shared solutions with their strategic partners
to close the gaps
! As a team, they leverage the results of the previous efforts
to create a shared competitive advantage
45
For Further Information
Tommy Barnes
Con-way Multimodal
Barnes.Tommy@MenloWorldwide.Com
Joel Clum
CarrierDirect
Joel@carrierdirect.co
Mary C. Holcomb, Ph.D.
University of Tennessee
mholcomb@utk.edu
Karl B. Manrodt, Ph.D.
Georgia Southern University
kmanrodt@GeorgiaSouthern.edu
46
The New Rules for Winning the
Game
Study Demographics
Position In The Supply Chain
2.0%
1.0%
1.0%
13.0%
14.0%
27.0%
26.0%
7.0%
16.0%
7.0%
6.0%
1.0%
8.0%
13.0%
20.0%
38.0%
Retailer
3PL(primarilydistribuHon)
Carrier
Distributor/wholesaler
Manufacturer/assembler
Tier1supplier
Tier2supplier
Tier3supplier
2013
2014
0% 10% 20% 30% 40%
48

13. Manufacturers Still Represent the
Largest Group
3.5
2.6
1.3
1.3
1.3
0.9
0.4
2.1
0
6.7
6.5
6.3
10.6
9.3
8.8
6.7
5.4
0.8
4
6.3
1.5
8.1
44.5
0.4
3.1
8.8
12.3
36.5
0 10 20 30 40 50
Manufacturing
Transportation – 3PL
Transportation provider
Food Industry
Warehousing – 3PL
Retail
Wholesale / distributiion
Energy / Chemical / Mining
Life Sciences
Health Managed Care
Utilities
Other
Financial Services / Insurance
Communications / Media / Entertainment
2014
2013