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8 1 January 27, 2015 CCSB Docket , Subject 5 Printed Matter Presented by: Tony Cheever and David Nanney

9 About Quad/Graphics, Inc. 2 Quad /Graphics was founded in 1971 by the late Harry V. Quadracci. Quad/Graphics is currently the second largest commercial printer in North America. Quad/Graphics is North America s leading printer of consumer magazines, special interest publications (SIP) and catalogs. Each week Quad/Graphics also prints approximately 1 billion retail ad inserts and Sunday magazines destined for newspapers and stores across the United States. Quad/Graphics' footprint spans North America, Latin America and Europe. Headquartered in Sussex, Wisconsin. $4.8 billion in annual sales. 25,000 employees worldwide.

10 Proposed Class Changes 3 The CCSB s analysis shows that across 121,428 observations, densities ranged from 1.84 to pounds per cubic foot (PCF) with an average PCF of with half of the figures falling in the 22.5 but less than 30 PCF range (Class 60). Quad/Graphics analysis of data from 479,571 lift truck pallet observations reflects that density ratings for Quad Graphics shipments ran an average PCF of (Class 55) with all observations falling between PCF and PCF.

11 Proposed Packaging Changes 4 The CCSB s observations show that one carrier reported zero claims in 2013 for item A second carrier had two accounts with claims ratios of 7.96% and 7.45% for item ; however, another of that carrier s accounts had only one shortage claim filed. The CCSB s findings further state that another carrier did not appear to have any claims issues on 4,000 shipments of printed matter (Item ) tendered to them in The same carrier reported zero claims for freight moving under Item The CCSB s findings also cite yet another carrier that claims that when printer s ship inserts They are slippery and not secured to the [lift truck] skid. The same carrier stated: They (retail inserts) are very expensive if they slide off the skids usually [$5,000] for each [lift truck] skid that gets damaged. The same carrier also stated: We can t restack them because they won t go thru (through) the machines [that insert them into the newspapers] properly. This carrier further reports claims ratios of 7.96% and 7.45% for item

12 Proposed Packaging Changes (contd.) 5 Quad/Graphics shipped 479,571 lift truck skids with LTL Motor Carriers in We identified 934 packaging integrity issue incidents (.00194% of total LTL shipments). Quad/Graphics recovered those skids from the carriers and recouped, repackaged and redelivered the product (via LTL carriers) without further incident. We identified 207 incidents where carrier liability was established due to loss, damage or inordinate delay (.00043% of total LTL shipments). We only filed a total of 64 LTL cargo loss and damage claims in 2014 totaling $17,009 ($ per claim) average with a claims ratio of.00013%.

13 Summation 6 The CCSB policies state that provisions in the Classification should reflect a commodity s known transportation characteristics. CCSB packaging policies call for packaging specifications to be established to ensure that freight is adequately protected in the motor carrier environment. Quad/Graphics feels that the CCSB s data pool in the current proposal is inadequate, inaccurate and too small. Quad/Graphics shipment data provided in this statement alone is almost four times the size of the sampling used by the CCSB. As indicated by the contents of this statement, our figures also indicate that a wide degree of variance exist. Printer matter is stow-able, low liability and palletized freight.

14 In Closing 7 Printed Matter has remained virtually unchanged (for the 38 years for Magazines and the 25 years for Inserts) since the last proposals for these commodities went into effect. Quad/Graphics feels that the data presented in the CCSB s analysis does not justify or prove that the changes being put forth are necessary or warranted. Quad/Graphics would be more than willing to participate in any further analysis needed in order to give the CCSB a broader and more accurate assessment of the true characteristics of Printed Matter. Thank you. Questions?