The ppt explains CHAINalytics unique way of benchmarking the Truckload freight market, LTL, Ocean and 3PL markets providing companies with powerful information of its standing as compared to the market. We build on the benchmarking by providing other value added services which will provide a comprehensive view of a shippper\'s transportation operations.

1. Model-Based Benchmarking Consortium
2010

2. Some of Our Consulting Clients
RETAIL
FOOD AND
BEVERAGE
HOME/OFFICE
NON-DURABLES
HEALTHCARE
HOME/OFFICE
DURABLES
Utilities/
Packaging Auto/Industrial Chemical/Process LSP
Telecomm/Media
OTHER
INDUSTRIES
SERVED
• 62 of the Fortune 500 • 11 of AMR’s Top 25 Supply Chains • 8 of the World’s 25 Largest Food & Beverage Mfgs
• 9 of the Top 15 US Retailers • 5 of the Top 20 Global Forest and Paper Companies • 9 of the Top 10 Consumer Goods Supply Chains., SCDigest

3. Transportation Master Planning Cycle
Model-Based
Benchmarking

4. Benchmarking is a Critical Step
in the Procurement Process
Typical Procurement Process, Top 10 Check List:
1. Benchmark your performance
2. Leverage your entire network
3. Leverage your network assets
4. Executive buy-in
5. Provide more information to carriers
6. Multiple Round Bidding
7. Optimize your responses
8. Standardize your charges (keep it simple for carriers)
9. Measure performance
10. Green – Improved efficiency reduces costs
No matter what your process is, Benchmarking needs to be included!

5. How do companies benchmark?
• Results from Chainalytics polls at public webinars:
How Does Your Company Benchmark Transportation Costs?
MBBC Members Non-Members
Don't benchmark, or don't know 2%
8%
Research public information 4%
8%
Rely on carriers and service 9%
providers 17%
Compare with other shippers 72%
14%
Measure against last year's rates 13%
53%

6. Logistics Cost – Moving Target
Logistics Costs
$1,400
$1,200
$1,000
$800
$600
$400
$200
Trans Costs Inv Costs Total Logistics Cost
Source: 19th & 20th Annual “State of Logistics Report” - CSCMP

7. “Am I Paying Fair Rates?”
In 2003 there was no way to answer that question
• Publicly available information was not sufficient
– Neither accurate nor timely
– Not robust enough to capture idiosyncrasies of the freight
• Traditional benchmarking does not capture cost drivers
– Database models do not isolate the individual characteristics of the lanes that determine the cost
of service
– Metrics based approaches such as Activity Based Costing do not capture the impact of external
market conditions

8. Model-Based Benchmarking
• Chainalytics Created the Model-Based Benchmarking Consortium
– A collaborative membership based organization for confidentially sharing transportation rate information
for the purpose of benchmarking against market costs
• MBBC Goals
– Build a representative model of the market
– Understand carrier cost drivers
– Quantify impact of freight characteristics
– Provide a bellwether to validate procurement performance
– Identify need and plan procurement
– Quantify value for sourcing events

9. Truckload Consortium Membership
• Model Statistics Jan 2010 Release
– Over $13.8 billion in transportation spend
– Nearly 14 million loads
– 75 model participants with TL spend ranging from $10M to over $500M
– Covers USA, Canada and in and out of Mexico
– 7 separate models (Dry, Temp, Intermodal, Flatbed, 3 short haul models)
– Equivalent to 5% of the total North American for-hire truckload market
Primary Business Sector Membership Freight Spend
Food Producers
3%
5% Retail 8% 13%
7%
26% Beverages $0-10M
8%
$10-50M
Industrial Goods &
Services $50-100M
8% Personal & Household
25%
$100-250M
Goods 32%
Other $250-500M
12% 19% $500M+
Forestry and Paper
15% Construction &
19%
Materials

10. Building the Models
CPL Distance How can we describe this relationship?
$
$
1,028
1,300
703
961
1. Draw a best fit line
$ 511 322 2. Write equation for the line (y= ax + b)
$ 889 685
$ 1,164 797 Fixed Cost
$ 1,059 747 y = 1.0485x + 259.32 per Load
$1,600
$ 1,072 621
$ 784 570 $1,400
$ 1,174 874 Variable Cost
$1,200
$ 615 398
per Mile
$ 1,004 753 $1,000
$ 1,198 913
$800
$ 1,045 897
$ 1,031 670 $600
$ 968 558
$400
$ 736 483
$ 731 469 $200
$ 798 521
$-
$ 1,379 998
$ 658 357 250 350 450 550 650 750 850 950 1,050
$ 891 477
$ 904 740
$ 1,035 755

11. Building the Models
• Example: Contract Carrier vs.. Spot Market Rate
– This can be modeled either as an increase in:
• Cost per load (Fixed Cost) or Fixed Cost: Variable Cost:
Slope is same, Slope is higher,
• Cost per mile (Variable Cost) Intercept is higher Intercept is same
y = 1.0485x + 259.32
$1,600
$1,400
$1,200
Both an art and a science $1,000
Engineering the cost of a $800
shipment based on its own $600
characteristics
$400
$200
$-
250 350 450 550 650 750 850 950 1,050

12. Building the Models
But what about the regional effect?
• So far . . .
– A shipment from OH to FL will cost as much as FL to
OH!
• Regional Values
– Capture impact of a truck entering / leaving an area
– Separates the regional effect from other factors
(miles, etc)
– Can be estimated by ALL loads in/out of a region
– Eliminates need for lane by lane comparisons
– Allows estimation of new lanes

13. Building the Models
• Regional Value Guidelines
– More regions are better
– But must have critical mass
– Only the relative value matters
• Calculating the impact:
– Move from OH to FL
• $539.11 = 153.17 + 385.41
– Move from FL to OH
• $87.01 = 39.91 + 47.10
• Moving South is approximately
~ $452 more per load!
In Out
Ohio 47.10 153.71
Florida 385.41 39.91

14. Benchmarking Report Output

15. Benchmarking Report Output
FUEL SURCHARGE PROGRAM DATA
Dry Van Temperature-Controlled Intermodal Flatbed
MBBC Reported MBBC Reported MBBC Reported MBBC Reported
Base Price in $/Gallon $ 1.131 $ 1.800 $ 1.276 $ 2.000 $ 1.157 $ 1.240 $ 1.223 $ 1.200
Escalator $ 0.058 $ 0.060 $ 0.053 $ 0.050 $ 0.086 $ 0.040 $ 0.057 $ 0.100
Rate Per Mile Increase $ 0.010 $ 0.020 $ 0.010 $ 0.025 $ 0.010 0.50% $ 0.010 $ 0.020
Median Cost of Fuel for the Model $ 2.496 $ 2.496 $ 2.496 $ 2.496 $ 2.496 $ 2.496 $ 2.496 $ 2.496
Average Annual Fuel Surcharge Paid Per Mile $ 0.23 $ 0.22 $ 0.23 $ 0.23 $ 0.15 15.5% $ 0.22 $ 0.24
Fuel surcharge Differential Per Mile $ (0.010) $ (0.005) $ 0.020

16. Benchmarking Report Output
Lane-by-Lane Analysis (long haul, dry van):
Annual Average
Origin Origin Destination Dest Dest Distance Annual Corridor Num Route Equipment Equipment Service Movement Contract
Origin City State Country City State Country (miles) Volume Volume Stops Type Type Size Type Type Type
Mankato MN US LOVES PARK IL US 347 180 450 1.00 DM D 53 S OB CC
PARIS IL US NEWPORT AR US 404 179 190 1.00 DM D 48 S OB CC
Lubbock TX US Pasadena TX US 541 178 1485 1.00 DM D 53 S IB CBK
Mankato MN US CHICAGO IL US 420 175 773 1.00 DM D 53 S OB CC
Annualized Annualized Total CPL paid by
Chattanooga TN US WAYCROSS GA US 350 175 175 2.00 DM D 53 S OB CC
Fuel Fuel Difference Company (Average Reported Estimated Difference
Topeka KS US BARTLETT IL US 549 169 540 1.00 DM D 53 S OB CC
Average Average Reported Surcharge Surcharge Annualized Reported CPL + Annual Cost Total CPL Percent Status
FULLERTON CA US SUMNER WA US 1,135 167 274 1.00 DM D 48 S OB SM
Reported Reported Annual paid by paid by Fuel Annualized Fuel (Includes Fuel (Includes Fuel (Includes Fuel (Includes Fuel
Saginaw TX US SAN ANTONIO TX US 275 167 198 1.00 DM D 53 S OB CC
CPL CPM Linehaul Cost Company Market Surcharge Surcharge) Surcharge) Surcharge) Surcharge) Surcharge)
CLEVELAND OH US WATKINS GLEN NY US 299 164 234 1.00 DM D 53 S IP CC
$ 500 $ 1.44 $ 90,000 $ 40 $ 80 $ (40) $ 540 $ 97,164 $ 681 -20.74% BELOW
WATKINS GLEN NY US UXBRIDGE MA US 325 161 729 2.00 DM D 53 S OB CC
$ 701 $ 1.74 $ 125,546 $ 46 $ 93 $ (47) $ 748 $ 133,840 $ 783 -4.47% BELOW
AKRON OH US WHITE MARSH MD US 351 159 226 1.00 Difference D
DM 53 S IP CC
$ 778 $ 1.44 $ 138,492 $ 62 $ 124 $ (62) $ 840 $ 149,538 $ 931 -9.72% BELOW
AKRON OH US Estimated
IRVING TX US
Estimated 48 $Estimated 1,154 Difference
151 151
Annual Cost 573Percent 100,305 $ 53
1.00 DM D S OB CC
$ 525 $ 1.25 $ 91,875 $ 97 $ (48) $ $ 777 -26.25% BELOW
Mankato MN US Linehaul Cost Linehaul CPM US
MENOMONEE FALLS Annual Linehaul
WI 333 Total151CPL $ 450 Difference 715 DM not125,150 $ 53
1.00 (Does D Status S OB CC
$ 675 $ 1.93 $ 118,125 $ 40 $ 81 $ (40) $ 787 -9.11% BELOW
WORLAND WY US (Does not
LAYTON UT US 388 147 244 1.00 DM D (Does not 48 S OB CC
$ 725 $ 1.32 $ 122,525 (Does not 63 Cost (Does126 $ (Does (63) $ (Does not 788 include 133,167 $
$ $ not not $ 864 -8.78% BELOW
Ogden UT US include Fuel
HAYWARD include Fuel US include Fuel 777 $
CA include Fuel $ 314
146 2.00 DM
include Fuel Fuel 380,147 Fuel 53 2,135 S
D
include $ OB CC
$ 2,146 $ 1.89 $ 358,406 $ 130 $ 261 (131) 2,276 $ 6.64% ABOVE
GAINESVILLE GA US Surcharge)
SIDNEY Surcharge) US Surcharge) 521 Surcharge) 1067
OH 145 Surcharge) 628 DM
1.00 Surcharge) D Surcharge) 48 S IP CC
$ 597 $ 2.17 $ 99,657 $ 32 $ 63 $ (32) $ $ 104,925 $ 537 16.95% ABOVE
NEWARK CA US $ SANTA FE SPRINGS US
601 CA $1.73 $ $ 376
108,229 $ 145
(101) 1802 (18,229) DM
2.00 D BELOW 53 S OB CC
$ 542 $ 1.81 $ 88,851 $ 75 69 $ 6 $$ 617 -16.8%
$ 101,110 $ 872 -29.31% BELOW
$ 791 $ $ 690
2.43 $ 127,343 $ $1.71 $ $
81 123,474 $
75 $ 712 $ $ 2,072872 $ 1.7% 140,424 AT$ 923 -5.53% BELOW
$ 749 $ $ 806
2.13 $ 119,148 $ $1.49 $ $
88 143,483 $
81 $ 7 $ $
(28) (4,991)837 $ -3.5% BELOW
133,100 $ 893 -6.26% BELOW
$ 1,674 $ $ 681
1.45 $ 252,797 $ $1.62 $ $
289 119,110 $
265 $ 23 $ $
(156) (27,235)
1,963 -22.9%
$ BELOW
296,361 $ 1,777 10.44% ABOVE
$ 490 $ $
1.47 $ 706
73,990 $ $2.02 $ $
38 123,605 $
77 $ (38) $ $
(31) (5,480)528 $-4.4% 79,757 $BELOW 660 -19.97% BELOW
$ 680 $ $
1.75 $ 737
99,960 $ $1.34 $ $
45 124,637 $
89 $ (45) $ $
(12) (2,112)725 $ -1.7%
106,502AT$ 747 -2.98% BELOW
$ 839 $ 1.08 $ 1,874
$
122,494 $ $1.65 $
89 $ 312,878 $
179 $ (90) $ $
273 45,528
928 $ 14.6% ABOVE
135,506 $ 958 -3.16% BELOW
$ 474 $1.72 $ 79,152 $ 123 $ 20,505 25.9% ABOVE
$ 624 $ 1.20 $ 90,542 $ 60 $ 120 $ (60) $ 684 $ 99,207 $ 764 -10.41% BELOW
$ 803 $2.69 $ 131,745 $ (262) $ (42,894) -32.6% BELOW
$ 373 $ 0.99 $ 54,102 $ 94 $ 86 $ 8 $ 467 $ 67,732 $ 563 -17.01% BELOW
$ 849 $2.61 $ 136,614 $ (58) $ (9,271) -6.8% BELOW
$ 812 $2.31 $ 129,146 $ (63) $ (9,998) -7.7% BELOW
$ 1,512 $1.31 $ 228,276 $ 162 $ 24,521 10.7% ABOVE
$ 583 $1.75 $ 88,088 $ (93) $ (14,098) -16.0% BELOW
$ 658 $1.69 $ 96,657 $ 22 $ 3,303 3.4% ABOVE
$ 780 $1.00 $ 113,833 $ 59 $ 8,661 7.6% ABOVE
$ 644 $1.24 $ 93,353 $ (19) $ (2,811) -3.0% BELOW
$ 476 $1.27 $ 69,076 $ (103) $ (14,973) -21.7% BELOW

17. Online Estimators for all Models

18. Online “Batch” Estimator

19. Benchmarking Report Output
Market Report
-Includes rate trend analysis
-Surcharge analysis
-Specific studies on
relevant topics

20. Customer Comments
“We realized what we thought were extremely competitive lanes… were actually well above market. We saved
$65,000 annually on only 4 lanes!”
“This is vital information to help us determine the most effective procurement strategies for our company.”
“We are on target to save 8 Million Dollars in our first year of membership in the MBBC.
“Not only do we use it for a sanity check among the transportation group, but we share with executive
management, especially in these times.
“MBBC has helped us compare our total landed cost to our competitors.”
“There is no doubt that we have validated how well the business units are doing… we now have the ability to
benchmark internally and externally.”
“We got our first report. Addressed just two lanes - saved $150,000!”
“We achieved an annual rate reduction of $100,000 with just one carrier”

21. Membership Process
• Annual Membership
– Includes two (2) model runs (April, October)
• Members must provide minimum 12 months data
– Historical transaction data every 6 months
– We do not „sell‟ the data – members are obligated to contribute
data
• Reports include:
– Lane-by-lane comparisons to market
– “Above”, “At” and “Below” market indication
– “At” is a 5% band which is +/-2.5% the benchmark rate
– Rate Estimator tools for each model
– Market analysis report
– Optional Summit (visible members, only)

22. Chainalytics Contact:
John Schnorf
jschnorf@chainalytics.com
770-433-1566

23. Ocean Consortium Membership
Model Statistics – December, 2009 Release
– 12 exporters and 10 importers
– 171,000 TEUs shipped annually
– Members‟ spend ranges from under $5M to over $50M
– Consumer Goods 42% of membership and 56% of the spend
– Major Trade Lanes: Europe, Asia, Latin America and Pacific
Over
15% Under
14% $25M
Retail $5M
17%
25%
Consumer Goods
14%
Automotive
$10-25M
Healthcare $5-10M
14% 43% 33%
25%
Industrial Goods

24. LTL Consortium Membership
• First Model Q4 2009
– Multiple beta/test models in „06, „07, „08
• 2009 LTL benchmark stats
– $405 million in spend
– More than 4.5M shipments
– 14 companies
– 3.15 billion pounds
– US market, only
– Industries
• Retail
• Food and Beverage
• Consumer Package Goods
• Healthcare
• Industrial Products