1. Perspectives from Freight Transportation Users US Department of Transportation – Federal Highway Administration

2. PCE, C. Campbell, 2004, Talking Freight Seminar2 Consumer Electronics – Overview High Value commodities Profitability challenges due to price erosion, operating costs, and Customer requirements Small, Medium and Large boxes utilizes a multitude of shipping modes Highly competitive and growing in competition 5 years ago major Electronics vendors were: Sony, Philips, Thompson (RCA), Zenith, Sharp, and Panasonic Today major Electronics vendors are: Sony, Philips, Thompson, Panasonic, Samsung, APEX, Audiovox, Sharp, and Sanyo.

3. PCE, C. Campbell, 2004, Talking Freight Seminar3 Consumer Electronics – Overview New Competitors in 2004: Dell, Gateway, and Virgin Companies launch new products in the CE sector. Forecasting, Order, and Shipping migration from Monthly Cycle to Weekly cycle Customer Requirements –Radio Frequency Identity (RFID) –Vendor Compliance

4. PCE, C. Campbell, 2004, Talking Freight Seminar4 Philips - Overview Philips Consumer Electronics balances Customer demand and requirements with 300 model variations to ensure timely delivery of our product. Product sizes vary from the size of a disposable razor to a 60” projection television. The customer mix ranges from small to large companies. 3 Outbound Distribution points in the US –Greeneville, TN –Roanoke, TX –Riverside, CA Products are manufactured in Europe, Asia, and Mexico.

5. PCE, C. Campbell, 2004, Talking Freight Seminar5 Inbound shipments –Port of Entry (Asia and Europe) –Moving product from Port to Warehouse –US/Mexico Boarder crossing –Third Party Logistics Provider involvement (3PL) Philips - Overview

6. PCE, C. Campbell, 2004, Talking Freight Seminar6 Philips – Overview Transportation Restructured the Supply Chain (3PL) Modes of Transportation –Air (Next Day, 2 nd Day, 3 Day) –Ground (Parcel Ground ie. Fed Ex, UPS) –Less Than Truckload (LTL) –Truckload –Intermodal (Rail) Transition from LTL and Ground (150lbs+ shipments) LTL Expedited service vs. Traditional “Air” service

7. PCE, C. Campbell, 2004, Talking Freight Seminar7 Philips – Overview Transportation Hours of Service – Challenge in 2004 –Multiple Stops (More than one customer on a trailer) –Increased charges from Carriers for Detention and Multi-Stops –Equipment Demand moves from Moderate to Severe –Driver retention and expansion –Will force more equipment on the road vs. less –Capacity battle transforms to a capacity war –LTL shipments will increase as will costs of operations (Carriers, Shipper, and Customers) 2001, 10% of all truckloads shipped by Philips were multi-stop shipments 2003, 46% were multi-stop shipments.

8. PCE, C. Campbell, 2004, Talking Freight Seminar8 “Being an attractive fish, in a Big fish pond” –Carrier relationships –Equipment utilization –Equal profitability –Automating Truckload “tender” process Rail congestion –Utilization can increase if transit time improved Factory Direct –Customer’s Freight Forwarder –Mexico Direct Philips – Improvement Opportunities

9. PCE, C. Campbell, 2004, Talking Freight Seminar9 Transportation Statistics

10. PCE, C. Campbell, 2004, Talking Freight Seminar10 Transportation Statistics

11. PCE, C. Campbell, 2004, Talking Freight Seminar11 Transportation Statistics

12. PCE, C. Campbell, 2004, Talking Freight Seminar12 Transportation Statistics

13. PCE, C. Campbell, 2004, Talking Freight Seminar13 Transportation Statistics

14. PCE, C. Campbell, 2004, Talking Freight Seminar14 Transportation Statistics Average Cubic feet utilized (Truckload volume)