1. The Global LOGISTICS FORUM March 15, 16 2010 Fairmont Bab Al Bahar, Abu Dhabi, UAE Understanding Drivers, Success Factors, Challenges & Enablers of Growing Logistics Markets for Dedicated Countries Dr. Thomas W. Speh, Director of Strategic Initiatives, CSCMP, and Senior Director of MBA Programs, Miami University (Ohio), USA

2. Evolution of Logistics Service Providers in the US Pre-1980: Transportation  Highly regulated environment stifled creativity, high cost, poor service  De-Regulation fostered new environment, which lead to massive changes in the 3 PL environment, at least in Transportation  Lessons learned Pre-1980: Warehousing & other 3PL Services  Heavy focus on private warehousing, little integrative 3PL companies  3 PL industry: small, unsophisticated players, small capital base, focused on real-estate, storage vs. service was the focus  Lack of trust by potential users, unsophisticated marketing  Emergence of larger 3PL companies with professional management  Demonstrate the value of decreasing asset investments and managing a labor force, achieving shipment consolidation  Trust fostered by successfully operating DCs and serving the customer’s customer

3. Evolution of Logistics Service Providers in the US, continued Key elements to the development of a healthy Logistics Service Provider industry in the US 1. Hands-off by government 2. Attraction of top management talent 3. Provision of effective IT solutions for managing logistics 4.Offering an effective value-add: asset and headcount reduction along with consolidation opportunities 5.Effective marketing: changing top management mindsets on using 3 PLs 6.Significant expansion of service offerings: forwarding, packaging, reverse logistics, kitting, assembly, etc, etc

4. 8. National, if not global operations 7. Sophisticated skills to manage a network: people, IT, systems integration with transportation 9. “McDonald’s Concept:” Ability to offer standardized, high quality service anywhere 10. Partnership mentality: collaboration and gain-sharing 11. Understanding costs: users and providers use common costing approach Key elements to the development of a healthy Logistics Service Provider industry in the US……. continued 12. Move to non-asset, 4PL base: manage an entire network and major segments of the supply chain

5. To Be Effective, Logistics Service Providers Need To Be….. Technologically state-of-the art Possess market knowledge Have 6-Sigma operations Be able to recruit & manage people Have excellent performance metrics Know their costs exactly Have a collaborative attitude Have a global focus and presence Understand customer needs