The document summarizes perspectives from different players in the supply chain on responding to changing operational requirements. It discusses a retailer's perspective on lowering costs as a receiver and carrier of goods. It then discusses a shipper's perspective on balancing internal and external variables like capacity, fuel costs, and regulations. Finally, it discusses a carrier's perspective on weathering economic storms and improving sustainability.

1. Change - It may not be all you
hoped for
Responding to Service and
Operational Requirements from
Consumer to Producer

2. Panel Introductions
• Dr. Karl Manrodt, Georgia Southern University
• Chris Owens, SuperValu
• Mike Cole, Kraft
• Steve Wutke, Prime Inc.

3. Change - It may not be all you hoped for
A Retailer’s / Wholesalers Perspective
Chris Owens, Director Supply Chain Strategy

8. Economy
macro pressures
Inflation
• Economy
Deflation
– impact to units, dollars, profits
Earnings
• Product Cost / Price fluctuations
Inventory
– shipper price inflation followed by deflation
Regulation Pressures
• Supply Chain Productivity
– Must adjust to de-leveraging of units and $

9. Response
Lower operating cost
Leverage Assets
Typical Retailer
shipper

10. Retailer is a Receiver
• Unloading policy changes
– Received seal intact, subject to count and inspection
– Economic order quantities
• Utilization of DSD – vendors deliver to the store
– High volume promotions skip the DC

11. Retailer is a Carrier
• Store delivery cycles
• •Store delivery cycles
Combination loads
• Combination loads
• Right sized fleet
• Right size fleet
• More backhauls
• Vendor collaboration

12. Retailer is a shipper
• Alternative Modes -
• Regular bidding cycles……
• Secure long term capacity
• Electronic invoicing

13. Change - It may not be all you hoped for
A Shipper’s Perspective
Mike Cole, Director N. A. Transportation

14. 2010 “The Perfect Storm” External Variables…
Productivity Economic
Asset Pressures Uncertainty
Capacity
Driver
HOS
Capacity
Fuel
CSA
Pricing
2010
Rate Compression
Bidding

15. Annual Internal Variables Driving Expectations
Productivity Internal Shift to
Pressures Regular Bid Cycles
Lower Volume
M&A Activity
Sustainability
CPU
Private Fleet
Network
Rationalization
Shifts
15

16. Key to Successful Transportation Solution is to Balance Internal
and External Variables…
Internal Shift to
Regular Bid Cycles
HOS
Asset Productivity
Capacity Pressures Lower
Economic Volume
Productivity Uncertainty
Pressures Network
Shifts Sustainability
Industry Shift to
Regular Bid Cycles CPU
Driver
Private Fleet
Capacity
Rationalization
M&A
Activity
CSA
Fuel 2010
Pricing

17. What is the Industry Saying …
• “The largest factor within the trucking industry that affects
its health is the cost of diesel fuel”, according to Chris Work
associatecontent.com
• Nearly two out of three trucking executives surveyed by
Transport Capital Partners in the fourth quarter said, they
expected freight volume to improve in the next seven to
twelve months
• According to truckinginfo.com, “Gone with the trucks are as
many drivers, paving the way for a driver shortage worse
than the industry has ever seen – a shortage that will be
exacerbated by new stricter federal safety regulations such
as CSA 2010 and regulations targeting driver health issues.”

18. What are our opportunities /
expectations …
Issue / Opportunity Potential Resolution
• Rate inflation without capacity • Maintaining “Shipper of
increases Choice” mindset with bidding
• Customer collaboration predictability
expectations • Balancing win/win solutions
• Bid award reconciliation with retailers & carrier partners
• Freight Forecasting • Forward baseline development
• Mode Balancing vs. historical baseline
• Introduction of Terra
Forecasting
• Rightsizing
Private/Dedicated/CC
18

19. Change - It may not be all you hoped for
A Carrier’s Perspective
Steve Wutke, VP Sales and Marketing

20. THE NEXT CHAPTER
WEATHERING THE STORM

21. THE NEXT CHAPTER
REEFER GROSS RATE VS. NET RATE
$0.50
$0.50 $0.47
$0.46
$0.45 $0.42
$0.40
$0.35 $0.32 $0.33
$0.30
$0.25
$0.20
$0.15 $0.13 $0.13
$0.10
$0.05 $0.03 $0.03 $0.03
$-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gross Rate Net Rate

22. THE NEXT CHAPTER
REEFER DRIVER EARNINGS VS. NET RATE
Annual Earnings $59,180
$45,220
Base + $.33
$41,920
Base + $.24
Base
2000 2005 2010

23. THE NEXT CHAPTER
EQUIPMENT CHANGES & FUEL
EPA COMPLIANT
o 2002 EGR (Exhaust Gas Recirculation)
o $5,000 & 130 lbs.
o 2007 ATD (After Treatment Device)
o $8,400 & 400 lbs.
o APU’s an additional $8,000 & 450 lbs
o 2010 SCR (Selective Catalytic Reduction)
o $9,000 & 450 lbs.
EIA 2000 = $1.50
EIA TODAY = $2.87

24. THE NEXT CHAPTER REEFER DRIVER EARNINGS VS.
REEFER TEAM PERCENTAGE
$1,150 40.0%
$1,050 38.0%
Driver Weekly Earnings $950 36.0%
$850 34.0%
$750 32.0%
Team %
$650 30.0%
$550 28.0%
$450 26.0%
$350 24.0%
$250 22.0%
$150 20.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Driver Earnings Reefer Team %

25. THE NEXT CHAPTER
SUSTAINABILITY
•Idle reduction
•Improved aerodynamics
•Improved logistics
•Driver training
•Automatic tire inflation systems
Prime’s Score = 1.25 •Single wide base tires
*highest score given
•Low viscosity lubricants
•Reduce highway speeds
•Weight reduction
•Hybrid power train technology
•SensorTRACS

26. THE NEXT CHAPTER BEWARE OF THE NAKED MAN THAT OFFERS
YOU THE SHIRT OFF OF HIS BACK!

27. Questions / Responses
• Panelist
• Audience