1. 000000 255 213 29 137 80 999999 255 227 108 TRB – SHRP2 SYMPOSIUM Innovations in Freight Demand Modeling and Data Improvement October 21-22, 2013

2. 000000 255 213 29 137 80 999999 255 227 108 1 Hyster-Yale Snapshot Hyster-Yale Materials Handling, Inc. (NYSE:HY) NACCO Materials Handling Group, Inc. is an operating unit of HY Leading global designer, manufacturer and marketer of lift trucks and provider of aftermarket parts and support Build to order OEM Headquartered in Cleveland, Ohio Over 5,300 employees in 13 countries FY 2012 Revenue – $2.5 billion FY 2012 Net Income - $98.0 million

3. 000000 255 213 29 137 80 999999 255 227 108 2 Hyster-Yale Overview Leading global lift truck brands in terms of units sold –#3 globally in 2011 (2012 data not yet available) Large installed base that drives parts sales –Over 798,000 units worldwide –Sales of more than 76,900 units in 2012 –Sales of more than 3,800 units at SN JV in Japan in 2012 Diverse customer and application base Global independent dealer network Comprehensive, updated global product line Globally integrated operations with economies of scale Experienced management team Key Highlights Global Footprint Mission Statement: Be a leading globally integrated designer, manufacturer and marketer of a complete range of high quality, application-tailored lift trucks, offering the lowest cost of ownership, outstanding parts and service support and the best overall value.

4. 000000 255 213 29 137 80 999999 255 227 108 3 Comprehensive Product Line

5. 000000 255 213 29 137 80 999999 255 227 108 4 Challenges to Today’s Manufacturing Logistics Network Globalization o Suppliers and Customers o Carriers and Service Providers o Planning for an Extended Supply Chain o Security Regulation o Driver Hours of Service Reductions o Importer Security Filing (ISF, aka “10 + 2”) o Hazardous Material Inventory Reduction o Vendor Managed Inventory o Forward Stocking o Replace Inventory with Information! Customer Service o Increase in Competitive Pressures o Right Product/Right Time/Right Place/ Right Condition/Right Price o Customers Demand More

6. 000000 255 213 29 137 80 999999 255 227 108 5 Inbound Transportation Modeling – Current State Utilize historical data sets o Freight bill payment files o Carrier shipment level detail reports Identify trends within a rolling 6-month period of time o Origin & destination combinations o Shipment frequency o Weights, volumes, piece counts Work with carriers & suppliers to validate feasibility o Does the supplier have room to hold material? o Can the carrier meet the required service expectation? Primary goal is to move from small, expensive shipments that are unplanned to cost effective shipments that are scheduled for delivery.

7. 000000 255 213 29 137 80 999999 255 227 108 6 Inbound Transportation Modeling – Current State Benefits & Limitations Benefits: o Regular shipping schedule for suppliers. Same day of the week, same carrier, in some cases… even the same driver. o Stability within planning system. Parts will arrive same time every week. o Leveling of workload at manufacturing receiving docks. We can adjust delivery plans to fit slower activity times. o Transportation cost reduction. Limitations: o Slow to recognize changes. Working with historical data requires 3 months worth of transactions in order to determine trend vs. anomaly. o Decisions are not shipment specific, instead they are based on the overall activity level during a period of time. o No consideration of future changes to SC network. In a sense, it is looking in the review mirror to see where you are going.

8. 000000 255 213 29 137 80 999999 255 227 108 7 Inbound Transportation Modeling – Current State Example Historical Data AnalysisOpportunity Identification Shipment #1 = 5,000 lbs., 3 pallets, Monday Shipment #2 = 7,000 lbs., 2 pallets, Wednesday Shipment #3 = 4,000 lbs., 4 pallets, Thursday Supplier & Carrier Collaboration 1)Determine if carrier has capacity. 2)Confirm supplier has space to hold freight. 3)Select the optimal loading day and time. 4)Set service expectations. Shipment Consolidation 1)Single shipment of 16,000 lbs. 2)Picked up from supplier every Wednesday. 3)Delivered to manufacturer every Thursday.

9. 000000 255 213 29 137 80 999999 255 227 108 8 Inbound Transportation Modeling – Future State Utilize open PO file o Work with future requirements vs. historical performance. o Planning resources have ability to see the shipment detail prior to carrier pick-up. Identify optimization opportunities based on real- time data feeds Primary goal is “optimization” o Shipment Method = Need o No longer saving transportation cost at the expense of inventory. o No longer reducing inventory at the expense of transportation cost. o Right parts delivered at the right time at the right cost.

10. 000000 255 213 29 137 80 999999 255 227 108 9 Inbound Transportation Modeling – Future State Benefits & Limitations Benefits: o Improved visibility throughout supply chain o Stability within planning system o Leveling of workload at manufacturing receiving docks o Appropriate levels of inventory o Transportation cost reduction o Avoidance of premium modes of transport (air, team drivers) Limitations: o IT investment o Communication channels must be efficient o Requires implementation of software solutions

11. 000000 255 213 29 137 80 999999 255 227 108 10 Outbound Transportation Modeling Multi-Stop Truckload Must Meet Customer Need Efficient Route Design o Minimize stops in order to reduce chance for delays. o Avoid congested metropolitan areas for first delivery. o Group deliveries by region. o Limit “out-of-route” miles. Design should be as close to Point A to Point B as possible (even if there are Points C & D) Operationally Practical o Total load weight should range between 38,000 and 44,000 lbs. o Majority of load weight should deliver to final destination. o Proper product mix in the trailer.

12. 000000 255 213 29 137 80 999999 255 227 108 11 Measuring Outbound Load Efficiency “Perfect” Load Score (In-Route Mileage %) X (Total Weight %) X (Final Stop % of Total Weight) = Load Efficiency XX= Actual Miles: 2,609 Direct Miles: 2,598 Out of Route: 11 (.4%) In-Route Mileage % 99.6% Total Weight: 40,238 lbs. Avail. Weight: 44,000 lbs. Under Utilization: 3,762 (8.5%) Total Weight % 91.5% Final Stop Weight: 38,958 lbs. Total Weight: 40,238 lbs. Under Utilization: 1,280 (3.2%) Final Stop Weight % 96.8% 88.2%

13. 000000 255 213 29 137 80 999999 255 227 108 12 Transportation Modeling – Key Considerations Is it cost effective? Does it meet desired service requirement? How do we mitigate risk? Are there implementation costs? Can it be managed? How will it be measured? Are there intangible benefits?

14. 000000 255 213 29 137 80 999999 255 227 108 13 Transportation Modeling – Assumptions Road & Highway Infrastructure o Support 500 miles per day o Minimize delays when operating outside of interstate system Port Facilities and Access o Quick vessel turnarounds o Containers off port within 24 – 48 hours o Effective rail interfaces

15. 000000 255 213 29 137 80 999999 255 227 108 14 Transportation Modeling – Future What can be done to mitigate the impact of regulatory limitations on drivers’ hours of service? How do we make the use of intermodal services a more viable option? How will larger container vessels calling US east coast ports impact current infrastructure? Is it possible to offset energy costs with more efficient transportation networks? Continued move away from Point A to Point B shipments.

16. 000000 255 213 29 137 80 999999 255 227 108 15 Transportation Modeling – Questions? Thank You! Andy Street, MS, CSCP Order Fulfillment & Logistics Manager NACCO Materials Handling Group, Inc. andy.street@nmhg.com (252) 412-3110