Protecting Your Interest Value From a 3PL Perspective Transportation & Logistics Conference

1. Protecting Your InterestValue From a 3PL PerspectiveTransportation & Logistics Conference Thomas D. Torcomian President/CEO

2. Logistics in North America • North American Transportation & Logistics Market Size = $1.3 Trillion • Top 50 Companies Combined Do Not Account for 10% of Total Market Share • Significant Fragmentation • LEL at $150MM is in the Upper 5% of Company Size • 500,000 Carriers Operating in the United States (15 Million Trucks) • 220,000 Carriers Operating in Canada • 138,000 Carriers Operating in Mexico Confidential

3. State of Logistics 2013 Cost Pressures Industry Carrier Rates Continue to Increase Fuel Costs Fluctuations Commodity Prices Continue to Rise Continued Pressure on Meeting Logistics Budget Small & Midsize Shippers Have Little Market Leverage Freight Claims Continue to Increase Claims Settlements Lifecycle Has Increased Corporate Capacity – Staffing is Down Severe Capacity Fluctuation Capacity is Still Leaving the Market; Drivers Are Difficult to Find and Keep. Over 38,000 Carriers Out of Business in Last 10 Years Financial Burdens Increase on All Carriers EPA Requirements HOS Challenges Customer Requirements IndustryDynamics Financial Pressures Changing Transportation Strategies Focus on reducing transportation costs and improving service levels Confidential

4. Safety / Liability Concerns • A Minimum of 55,000 US Carriers are Over FMCSA’s Intervention Threshold • Those 55,000 Carriers Face Greater Scrutiny by the Insurance Companies Which Will Effect Their Premiums • This Will Affect Costs/Rates and Weak Carriers Will Continue to Leave Market Confidential

5. Risk • Once Upon a Time Every Transportation Provider Could Survive With One Major Customer • Small Carriers Rely More on Brokers for Revenue  • Those Days are Over and Now Present a Risk to America's Shippers • Greater Risk of Adversity • Double Brokering • Fraud • Theft • Fictitious Pick Ups Confidential

6. Beyond Our BordersWhat You Need to Know • International Compliance • Known Shipper Agreements • Customs and Duties • Customs Trade Partnership Against Terrorism CT-PAT • Regulation Changes Daily  • Mexican Carriers • Security Risks  • Market Expertise • Border Issues • Visibility Confidential

7. Cargo Loss / Damage • How Well Do Carriers Respond to Lost or Damage Goods • Are They Willing to Assist in Reviewing Shippers That Have Repetitive Issues • Carriers Will Raise Rates With the Assumption They Will Damage High Value Freight • This Places Further Pressure on Carrier Management Confidential

8. Carrier Selection • Most Carriers are Limited in What Service Offerings They Present to Clients. • Truckload Carriers Typically Do Not Have the All Encompassing Programs • Most Cannot Support a Clients Entire Scope of Transportation Needs • Dealing w Carriers on Your Own Requires More Management Negotiation - Compliance Administration- Auditing and Metrics Management • Insurance   • Green Initiatives • Clean Truck Regulations • Interview Them as You Would an Employee • Seek a Partner Not a Vendor Confidential

9. Carrier SelectionHow To Protect Yourself • Documentation Required • Carrier Agreement- State No Brokering or No Pay • Carrier Operating Authority • W9 • Insurance Cert – Must List You as Additional Insured/ Certificate Holder • CSA Rating – Review Quarterly • Haz Mat Certifications • Tracking Tools • Maintenance Policy • Can You Tell a Broker From a Carrier? Confidential

10. How to Protect YourselfEstablish Rules • Due Diligence • Understand How Your Partner Does Business • Site Visits • 5 & 10 Rule • Tractors Must Be 5 Years or Newer • Trailers Must Be Newer Than 10 Years • Do Not Do Business Over the Phone • Do Not Book Freight Via the Internet (LTL Excluded) Confidential

11. Why Outsource in The First PlaceDevelopment of a Strategic Procurement Plan • Synergistic Services- New Distribution Methodologies • Carrier Relationships Extend Beyond a Single Shipper • Multiple Carrier/Mode Resource Management • Depth of Supporting Carriers • Proper Mode Application • Increase Delivery Performance • Transit Requirements Management • Accessorial Management • Freight Visibility • Proactive Track and Trace Functions • Claims Reduction Management • Packaging Review – Recommendations • Root Cause Analysis • Shipment Consolidation • Synergistic With Mode Assignment Methodologies • Shipping/Ordering Pattern Review • Compliance Knowledge Confidential

12. Third Party Logistics • How Can I Tell a Good 3PL Apart From a Bad One • How Long Have They Been in Business • Have a Diverse Customer Base  • Look for Customer or Industry Concentration • References (Customers and Carriers) • Technology Investment • Commitment to Continuous Improvement • Reporting /Metrics Management • A Good Logistics Partner is Not Interested in Your Job Confidential

13. TL Brokers • If You Choose to Do Business With a Broker • Know Who You Are Dealing With • There are Many Excellent TL Brokers • There are More Bad TL Brokers • Understand Their Policy on Carrier Selection • If its Only Via Load Board -Run • Get a Copy of Their Bond • Have an Agreement That States No Double Brokering Confidential

14. Summary • Supply Chain Management is Challenging Enough • Economic Conditions are a Major Contributor to the Risks Surrounding Transportation Costs • Do Your Homework • Due Diligence is the Key to Averting Risk • Procurement Strategies Work • Select Good Partners (Not Vendors) • Make Sure You Define the Value You Seek • Continue to Utilize Network Events Such as This One Confidential

15. Thank You Buffalo I Dominican I Dallas I Detroit I Houston I Jacksonville I Los Angeles I Mexico City I Miami I New Jersey I Philadelphia I Puerto Rico I Sacramento Confidential