1. Third Party Logistics Libby Ogard Prime Focus LLC October 20, 2004

2. Source: Council of Logistics Management Definitions Third Party Logistics (3PL): Outsourcing all or much of a companies logistics operations to a specialized company Third Party Logistics Provider: A firm which provides multiple logistics services for use by customers. Preferably, these services are integrated or “bundled” together by the provider. These firms facilitate the movement of parts and materials from suppliers to manufacturers and finished products from manufacturers to distributors and retailers. Among the services which they provide are transportation, warehousing, cross-docking, inventory management, packaging and freight forwarding.

3. Why Outsource? 80% of the top 400 US companies operate on a global scale

4. Complex Inland Distribution Patterns

5. Profitability depends on Speed, Reliability and Visibility

6. Outsourcing - Industry Trends

7. DescriptionSavings Realized Route Design & Optimization Closed Loop Dedicated Operations Mode Conversion Core Carrier Management Rate Negotiation & Audit Inbound Consolidation Reverse Logistics DC Location Realignments Reduced Inventory 10-15% 15% 10-15% 5-10% 4-5% 20-25% 10-15% 10-12% 7-10% Contract Logistics Savings Potential

8. FY 2003 Fortune 500 Global 3PL Gross Revenues by Industry

9. Costs stated in Billion's of Dollars Customers of 3PL’s IndustryGlobal Costs Domestic Costs Automotive$98.2$37.4 Technology$156.4$77.4 Retailing$98.6$67.2 Consumer Products$13.6$13.3 Food and Grocery$32.2$27.8 Healthcare$38.4$34.0 Industrial and Elements$179.7$84 Other$63$25.3 Total Costs$678.3$366.3

10. Armstrong and Associates 2004 Customers of 3PL’s Percent of Fortune 500 Companies Using 3PL’s

11. Buyers of 3PL Services Customer# of 3PL’s Used General Motors37 Wal-Mart Stores33 Ford Motor, HP27 Procter & Gamble20 General Electric17 Georgia Pacific, IBM16 PepsiCo, Sears13 Coca-Cola, Sara Lee, Target, Xerox 12 General Mills11 Delphi, Safeway10

12. Source: Armstrong and Assoc 2004 Services Provided By 3PL’s

13. Top Providers Est. Rev. ($M) 2003 RankProvider3PL 2003 Revenue 1Excel$8,300 2Kuehne & Nagel$6,900 3Schenker$6,400 4DHL$5,700 5P&O Nedlloyd$4,800 6TGP/TNT$4,700 7Panalpina$4,600 8UPS Supply Chain$4,100 9Nippon Express$4,000 10C.H. Robinson$3,600 11Menlo Worldwide$3,100 12NYK Logistics$3,000

14. 10 Commandments of Outsourcing 1.Develop a strategy for outsourcing 2.Establish a rigorous provider selection process 3.Clearly define expectations 4.Develop a good contract 5.Establish sound policies and procedures 6.Identify and avoid potential points of friction 7.Communicate effectively with your partner 8.Measure performance and communicate results 9.Motivate and reward provider 10.Be a good Partner