The old rules of transportation are in the wind! Catch up on the new rules, and learn how the global and logistics markets are being affected.

1. 5NEW RULES
TRANSPORTATION
OF
We live in an era when
transport is becoming
more fragile, slower
and less reliable than it
used to be.
1
2
3
4
5
OLD
NEW
We live in an era of
continuous improvement
in transportation.
It’s all about profitability.
OLD
NEW
It’s all about volume.
When bidding out
freight, assuring
capacity is the primary
goal.
OLD
NEW
When bidding out freight,
reducing spend is the
primary goal.
I need to think about
both my “good” freight
and my “bad” freight
differently.
OLD
NEW
My core carrier strategy
will meet my needs and
handle my growth.
Changing rules and
technology will topple
the status quo.
OLD
NEW
The freight transport
market is mature and
slowly evolving.
ARE WE STILL IN AN ERA OF CONTINUOUS IMPROVEMENT?
FTR Active Capacity Utilization Truckload Capacity Utilization
Using a supply chain network opens the lines of communications, collaboration and sharing between trading
partners, offsetting capacity crunch issues with best practices that serve to make the challenges less daunting.
To run a more profitable transportation operation, carriers provide shippers visibility into their supply chains, by
sharing forecasts and alerting truckers when capacity is needed.
To find capacity, businesses need to have more than just first-order connectivity, or one-to-one. They need and
want one-to-many connectivity, such as what you get with a supply chain operating network. Leverage the
power of the network, joining with thousands of business partners to collaborate on transportation processes
to lower your annual spend and gain a competitive edge.
CONNECTIVITY IS KEY
For success, shippers have to work closely with their carriers and help them become more efficient – like
giving them; connectivity to automate processes, resources to communicate and collaborate more effectively,
and more.
Today, truck load prices are moving above inflation; spot load prices are even worse. Gone are the days
when you could easily secure a significant discount from your carriers.
BECAUSE OF THE DRIVER SHORTAGE AND UPCOMING REGULATIONS, THERE IS A MAJOR
SHORTAGE OF CAPACITY IN THE TRANSPORTATION INDUSTRY
By sharing information with carriers, your business will enjoy optimal services and pricing to get your freight
to the right place at the right time. Connect carriers to a B2B network to automate their processes and
improve communication with them. Share forecasts of projected shipments so carriers can be
better prepared.
Shippers need to identify their bad freight and its value, understand what is at risk if the freight doesn’t move
and how much they are willing to spend to solve the problem.
Technology and rules effect the supply chain and the way consumers make purchasing decisions. Online research
and purchasing is steadily advancing and mobile adoption is at an all-time high. Consumers hold stores in their
hands, comparing prices, “trying on” or testing items, processing payments and scheduling delivery.
UNDERSTAND THAT “ONE SIZE FITS ALL” CONTRACTS HAVE DISAPPEARED
WILL MY CORE CARRIER STRATEGY CONTINUE TO MEET MY NEEDS AND HANDLE MY
GROWTH?
IS THE FREIGHT TRANSPORT MARKET MATURE AND SLOWLY EVOLVING OR WILL
TECHNOLOGY TOPPLE THE STATUS QUO?
COMPANIES THAT UNDERSTAND AND EMBRACE THIS EVOLUTION IN THE WAY WE DO
BUSINESS WILL BE INDUSTRY LEADERS
Most modes have struggled to get back
to previous peaks
2006.4
2007.2
2007.4
2008.4
2009.2
2009.4
2010.4
2011.2
2008.2
2010.2
2011.4
2012.2
2013.2
2013.4
2012.4
2014.2
2015.2
2015.4
2014.4
2016.2
2016.4
2017.4
2017.2
2018.2
2019.2
2019.4
2018.4
1.4
1.3
1.2
1.1
1
0.9
0.8
0.7
2006.4=1
?
25%
20%
15%
10%
5%
0%
-5%
YOYChange
Capacity Utilization
.98% .99%
.95%
105%
2004-2005 2014 Current 2018-2019
Spot Contract
Pricing Comparisons
- Previous Peaks
Private
38%
Dedicated
21%
Defined
Route
10%
Asset
Network
10%
Non Asset
21%
Historical Contracts Irregular RouteRegular Route
Load Shares
Customers Are Segmenting Their Freight Into Two Buckets
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$-
CostSavingsPerMile
Risk Cost Fuel Cost Driver Cost Productivity Total
Digital-Tool Enabled Cost Saving by 2030
AT MATURITY DIGITAL TOOLS WILL
REVOLUTIONIZE COST, CAPACITY AND
SUPPLY CHAIN DESIGN
In the past, shippers didn’t want to be bothered
with new technology – they felt they could just
hammer on their carriers to get capacity and
lower prices. But this isn’t true today due to
decreased capacity, the driver shortage and
rising transport costs.
Source: http://resources.elemica.com/h/i/223009014-series-five-
old-rules-of-transportation-that-no-longer-apply-rule-5/201809
After Decades Moving Below Inflation Prices Now Moving Firmly Above
1.9
1.8
1.7
1.6
1.5
1.4
1.3
1.2
1.1
1
0.9
1992-1
1993 1994 1995 1996 1997 19981999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Truckload CPI
Adapt to market events
and increase efficiency by collaborating across a supply chain operating network.
Gain end-to-end visibility, foster communication, and streamline operations for a true
competitive advantage.
IS IT REALLY ALL ABOUT VOLUME?
WHILE THE CAPACITY CRUNCH IS ONLY GOING TO GET WORSE, THERE ARE STILL THINGS
THAT SHIPPERS CAN DO TO BECOME A BETTER TRANSPORTATION PARTNER
IS REDUCING SPEND THE PRIME GOAL WHEN BIDDING OUT FREIGHT?
In the past, shippers didn’t want to be bothered with new technology – they felt they could just hammer on their
carriers to get capacity and lower prices. But this isn’t true today due to decreased capacity, the driver shortage
and rising transport costs.
VS
VS
VS
VS
VS
2000.1
2000.3
2001.1
2002.1
2002.3
2003.1
2004.3
2005.1
2001.3
2004.1
2005.3
2006.1
2007.1
2007.3
2006.3
2008.1
2009.3
2010.1
2009.1
2010.3
2011.1
2012.1
2011.3
2012.3
2013.3
2014.1
2013.1
2003.3
2014.3
2008.3
55,000
50,000
45,000
40,000
35,000
30,000
The Big Guys Arent Growing
Ratio Of Volume To Previous Peak
Supply chains will be dramatically
impacted by the rapid changes in
today’s global transportation and
logistics market.
Gone are the days when a shipper can contract with a carrier of choice and name the freight price he will
pay. Truck capacity used to run in the low 90s, with a peak year at 95%. During the recession, shippers were
able to negotiate substantial freight rate reductions due to excess capacity.
100%
98%
96%
94%
92%
90%
88%
86%
84%
82%
80%
1992.1
1993.2
1994.3
1997.1
1998.2
1999.3
2002.1
2003.2
1995.4
2000.4
2004.3
2005.4
2008.2
2009.3
2007.1
2010.4
2013.2
2014.3
2012.1
Surge Capacity
Capacity Utilization
90%
85%
80%
75%
95%
100%
105%
110%
Tipping Point
Katrina Sandy Winter of 2014
Underlying Weather Effect
Publically-Traded Truck Count
Shipper Preference and Tight Competition in a Mature Industry have Dramatically
Reduced Surge Capacity
Major Storm EffectsSeasonally Adjusted
DUE TO TIGHT CAPACITY, CARRIERS
NOW ONLY WANT TO FOCUS ON
GOOD FREIGHT, LEAVING A CRITICAL
SHORTAGE IN BAD FREIGHT CAPACITY
In a perfect market, the two kinds of freight
move at different prices.
Truckload Prices & Inflation
At Maturity Digital Tools Will Revolutionize Cost, Capacity and Supply Chain Design
“Good” Freight - a load that moves efficently
with regular, predictable patterns and backhauls
“Bad” Freight - a load that flucuates in size and
volume is suboptimal; and can be unpredictable.