1. Transportation/Logistic Strategy Express Carriers: Traditionally restricted to shipments under 150 lbs LTL: Defined by the ICC as shipments up to 10,000 lbs TL: Full truckloads of 40,000 lbs Actually a lot of competition between segments Basic Competition Motor Carrier Competition

2. Transportation/Logistic Strategy Small shipments are a problem of long standing. Express Carriers do well with shipments under 150 lbs. LTL does well with shipments over 500 lbs. Shipments between 150 lbs and 500 lbs are a problem. FedEx and UPS moving into LTL, but not set up for it. Express vs LTL Motor Carrier Competition

3. Transportation/Logistic Strategy Express LTL $ 150 lbs LTL Market Express Market 500 lbs ? 6k 10k Volume ~ Express vs LTL Motor Carrier Competition

4. Transportation/Logistic Strategy Express vs LTL Motor Carrier Competition Small Shipment Specialists (SSS)? Opportunities for new carriers with specialized equipment? Focus on shipments form 150 to 500 lbs? Focus on service?

5. Transportation/Logistic Strategy Express LTL $ 150 lbs LTL Market Express Market 500 lbs ? 6k 10k Volume SSS* ~ Express vs LTL Motor Carrier Competition

6. Transportation/Logistic Strategy LTL vs TL Weight Breaks Between Modes Many traffic managers use TL for shipments of 6K to 10K Some competition between LTL and TL, but also a gap in service: LTL prefers 1,000-5,000 lbs; TL will try to re-sell the capacity remaining. LTL vs TL Motor Carrier Competition

7. Transportation/Logistic Strategy LTL vs TL Motor Carrier Competition Weight Breaks A point of indifference between a given rate and a rate charged for a larger volume TL LTL Volume $ V*

8. Transportation/Logistic Strategy Weight Break Example TL Cost [1] = LTL rate * Volume (V) Ship 6,000 lbs from Fayetteville, AR to Phoenix, AZ (1,200 Miles) Actual Rate via ABF = 60.58; with 60% Discount = $24.23/cwt TL Cost = $1.25/Mile * 1,200 Miles = $1,500.00 LTL rate for 5,000 to 10,000 lbs = $25.00/cwt $1,500 = 25.00 * V 1,500/25.00 = V V = 6,000 lbs If shipment is less than 6,000 lbs, ship LTL If shipment is over 6,000 lbs, ship TL (pay for the entire truck) [1] TL Volume at 40,000 lbs LTL vs TL Motor Carrier Competition

9. Transportation/Logistic Strategy TL LTL $ 150 lbs LTL MarketTL Market 500 lbs ? 6k 10k Volume ~ LTL vs TL Motor Carrier Competition

10. Transportation/Logistic Strategy LSS = Large Shipment Specialists Opportunities for new carriers with sophisticated information systems? Jevic, Holland – Others? Carriers that handle large LTL shipments (i.e., 6k to 20k) like TL carriers (i.e., door-to-door, without terminals). Role of Density? Role of Intermodal? Role of Information? Motor Carrier Competition LTL vs TL

11. Transportation/Logistic Strategy TL LSS* 6k 10k Volume $ 150 lbs TL Market 500 lbs LTL ? LTL Market *LSS = Large Shipment Specialists ~ LTL vs TL Motor Carrier Competition

12. Transportation/Logistic Strategy Express TL 150 lbs Express TL 500 lbs SSS ~ 6k 15k Volume LTL LSS LTL $ ??? LSS Motor Carrier Competition

13. Transportation/Logistic Strategy What will the industry look like in the future? New forms of competition? or Mega Carriers Providing Service to all Segments? Motor Carrier Competition

14. Transportation/Logistic Strategy Carrier Selection Available Modes Selection Criteria Carrier Competition Total Cost