Multimodal Industry Trends and RFP Best Practices. AIAG Supply Chain Summit Livonia, MI June 20th, 2017

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Randell Brett Hunt
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1 Multimodal Industry Trends and RFP Best Practices AIAG Supply Chain Summit Livonia, MI June 20th, 2017

2017 LTL Industry Trends CAPACITY is tight and will remain tight throughout the year API Application Program Interface Carriers are pricing for profitable growth vs.

2 2017 LTL Industry Trends CAPACITY is tight and will remain tight throughout the year API Application Program Interface Carriers are pricing for profitable growth vs. growth/ market share Pool distribution and consolidation opportunities are being asked for more than ever The discussion about dimensional based pricing has eased up $ $ Dimensioner use will expand 2

3 When to perform an LTL Request for Pricing (RFP) Re-bid of transportation network New commodity launch New location launch Replacement of carrier for service issue Replacement of carrier for price increase Add carrier depth 3

What to include in an LTL Request for Pricing (RFP) Invite carriers that have

geographical requirements General information about the company, event scope,

complete and return Letter of Authorization if using a third party to manage RFP

4 What to include in an LTL Request for Pricing (RFP) Invite carriers that have passed your companies vetting requirements and match the operational and geographical requirements General information about the company, event scope, carrier requirements, summary of documents included in RFP to review and/or complete and return Letter of Authorization if using a third party to manage RFP event Further define the scope of the event Master Agreement that contains legal verbiage to do business 4

What to include in an LTL Request for Pricing (RFP) Accessorial schedule that contains what s applicable for the carrier to charge outside of freight charges Fuel Surcharge schedule that carriers

5 What to include in an LTL Request for Pricing (RFP) Accessorial schedule that contains what s applicable for the carrier to charge outside of freight charges Fuel Surcharge schedule that carriers need to utilize A data set that contains shipment level detail What rate tariff to bid off of A bid response form that they complete and return with their proposed pricing An attachment they complete and return that captures their transit times 5

What to include in an LTL Request for Pricing (RFP) The Freight All Kinds (FAK) structure or if it s actual

class Pictures of the freight Facility/Site survey Complete address, contact information and shipping/receiving

successfully at that facility Live load/unload or is spotted equipment needed Freight Characteristics palletized

6 What to include in an LTL Request for Pricing (RFP) The Freight All Kinds (FAK) structure or if it s actual class FAK 85 for classes 50 through 110, classes 125 and above actual class Set the FAK at your weighted average class Pictures of the freight Facility/Site survey Complete address, contact information and shipping/receiving hours Specific information about the facility the carriers would need to know in order to handle freight successfully at that facility Live load/unload or is spotted equipment needed Freight Characteristics palletized or loose, stackable, dimensions of pallet, haz mat, temperature control, protect from freeze, freight class, NMFC number 6

What to include in an LTL Request for Pricing (RFP) $ Payment

carrier invoice If the terms are above 30 days it may affect

it s full replacement or retail value up to a certain amount

EDI requirements 204 Load Tender 210 Invoice 214 Status

7 What to include in an LTL Request for Pricing (RFP) $ Payment terms to the carrier Typically 30 days from receipt of carrier invoice If the terms are above 30 days it may affect carriers pricing and participation Cargo liability Typically it s full replacement or retail value up to a certain amount per pound per shipment and a maximum of $100,000 per shipment EDI requirements 204 Load Tender 210 Invoice 214 Status update Key Performance Indicators (KPI s) and how they ll be measured 7

What to include in an LTL Request for Pricing (RFP) Complete listing of applicable facility addresses Checklist of specific requirements the carrier needs to return confirming they re in agreement or

8 What to include in an LTL Request for Pricing (RFP) Complete listing of applicable facility addresses Checklist of specific requirements the carrier needs to return confirming they re in agreement or they re not An attachment the carrier completes and returns that contains information about the terminal servicing your facility Terminal address and appropriate contact information (manager/local sales/dispatch) Hours and days of operation Distance terminal is located from your facility Timeline of the RFP process and anticipated launch date 8

9 2017 TL Industry Trends CAPACITY is loose with expectations of tightening Q4 / Q1 of 2018 Modal Conversions Increasing $ Carriers maintaining pricing but positioning for increases Carriers Continue to expanding the use of relay network solutions Asset based carriers expanding leverage of their internal brokerages ELD discussions continue to evolve 9

10 When to perform a TL Request for Pricing (RFP) Re-bid of transportation network Change in Market Conditions New location launch Replacement of carrier for service issue Replacement of carrier for price increase Add carrier depth 10

11 Foundations of a TL Request for Pricing (RFP) Understand goals of RFP Define ideal condition (broker / asset mix / WMBE) Identify risks of conducting an event Know organizational appetite for change Define value before conducting an event Define a realistic timeline for both bid and implementation Understand value / cost of insurance and liabilities 11

12 Selecting Providers for TL Request for Pricing (RFP) Be deliberate, exclusive and surgical Invite carriers that have passed your companies vetting requirements Identify providers that have network density within specific network footprint Identify providers that can be leveraged vertically within supply chain Seek to leverage diversity within carrier scale and scope Look to alternative shipping methods 12

13 Awarding a TL Request for Pricing (RFP) Understand capacity constraints with providers Identify the highest value solution Identify contingency coverage Understand the provider culture Eye on future technology 13

14 When to perform an LTL Request for Pricing(RFP) Opportunity for Questions Thank you 14

Innovations in Freight Management

Innovations in Freight Management Dave Menzel, President and COO Echo Global Logistics November 7, 2018 Why innovate? Supply chains increasing complex to manage TL market is very fragmented 80% of US truck