Confidential Sales Training Freight Basics

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FREIGHT BASICS Types of Freight Services

There are a variety of different types of freight services. For our purpose, we will classify them as follows:

1. Light Package

This segment is served by three competitors; DHL, FedEx and UPS. There are minor differences in the sub-type of services offered, but generally they can be classified as (a) Overnight Air; (b) Deferred Air; (c) Ground; (d) International Export; (e) International Import. Customers will typically establish a relationship with one of these carriers, and will send all of their light packages with this carrier. Shipments vary in size from letters to medium sized boxes weighing less than 150 lbs and adhering to certain dimensional restrictions.

2. Less Than Truckload (LTL) Freight There are numerous competitors in this segment, and very little brand loyalty. Recognizable players include FedEx Freight, Roadway and Con-way, among others. There are minor differences in the sub-type of services offered, but there is a distinct difference in the scope and reach from carrier to carrier. Some carriers are national in scope, and will even make deliveries to Canada or Mexico. Others are regional, focusing on a specific geographic area of the country. All segment participants transit their loads via truck. The segment is called Less Than Truckload because any given semi trailer will carry shipments for more than one shipper. This is an advantage to the shipper because it does not need to pay for use of the whole truck. Customers usually have relationships with several carriers which they contact for a quote for each shipment. Shipments very in size, usually weighing 150 lbs or more, and most commonly shipped on pallets.

3. Full Truckload (FTL) Freight There are numerous companies that compete in this segment as well. Some LTL carriers also participate in the FTL segment. Recognizable players include Schneider and Swift. There are minor differences in the sub-type of services offered, but there is a distinct difference in the scope and reach from carrier to carrier. Some carriers are national in scope, and will even make deliveries to Canada or Mexico. Others are regional, focusing on a specific geographic area of

Confidential Sales Training Freight Basics

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the country. All segment participants transit their loads via truck. The segment is called Full Truckload because a semi trailer will carry shipments for only one shipper. This is economical to the shipper when it has enough freight to fill, or nearly fill a semi trailer. Customers usually have relationships with several carriers which they contact for a quote for each shipment. Freight is most commonly shipped on pallets, and as a general rule if a customer has more than 7+ pallets destined to single location a FTL carrier may make more sense. The determining factor would be the weight and destination of the shipment. Most truckload carriers will utilize 53 trailers and can handle 26 standard pallets or a weight in the 45,000 lb. range.

4. Expedited Freight This is a term used to describe arrangements outside of the Light Package segment that allow for the pick up of, and/or the delivery of a shipment at a specific time. Shipments that transit via truck are commonly referred to as using a dedicated truck while shipments transiting via plane are commonly referred to as air freight. In either case this type of freight is almost always urgent. Customers may have one or few relationships with these types of carriers. Some LTL carriers participate in the ground transportation of this segment by offering delivery guarantees for an additional fee. Freight can be of a variety of sizes, although the cargo hold of an aircraft will restrict the shipment size for air freight. The TSA requires specific documentation on file from customers utilizing air freight since passenger airlines are often utilized for this purpose. This may complicate the coordination of these types of shipments if the shipper is arranging an air freight shipment for the first time.

5. International Freight International freight is transited via ocean or air. The differences in transit times often dictate which form of transportation is utilized. Ocean freight can take a month or more, while international air freight may take as little as a day. The size of the shipment is also a determining factor, with ocean freight enjoying a distinct advantage. Ocean freight is also much more economical when a high volume of units are being shipped. Ocean shipments move FCL (full container load) or LCL (less than container load). Due to the average cost of these types of shipments, customers will typically seek quotes from multiple carriers.

Confidential Sales Training Freight Basics

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Generic Processing of Freight Shipments

Excluding Light Package, the processing of freight shipments is generally the same from segment to segment.

QUOTE

Customers will typically get three quotes. This is usually done by calling carriers by phone, or retrieving the quotes from carrier websites or a website that retrieves quotes from multiple carriers.

Obtaining quotes via phone is the most time consuming of the methods, but is very common. Often carriers do not respond to the caller with a quote on the initial call. This can be because a particular station needs to participate in the quotation process, or the quote is generated by a particular person, such as a sales rep. Therefore obtaining a quote can involve multiple phone calls with each carrier.

Using carrier websites to obtain quotes is less time consuming, but still requires separate visits to each carrier website. As with using the phone, there can be issues in comparing the quotes since there is a likelihood that the same information was not provided to each carrier.

Websites that return quotes from multiple carriers are still more efficient, and is the preferred method marketed by Worldwide Express. Competitor websites compare unfavorably, albeit marginally, to that of Worldwide Express. However, this gap will widen as new features are introduced.

Confidential Sales Training Freight Basics

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SELECTION

Once the desired number of quotes has been obtained, the customer must select one. The selection criteria balances price, transit time, and the customers perceived carrier reputation. Sometimes the customer will discover that they lack certain information one quote compared to another, and will re-contact a carrier and therefore extend the amount of time it takes to process the shipment. A common example is transit time.

The time required to select a carrier may be insignificant if all the information is readily laid out. However, it may take several minutes for the preparer to sift through the information received in order to make a decision. Much depends on how organized the shipper is.

LABEL PREPARATION

Once a carrier is selected, the shipping label, referred to as a Bill of Lading (BOL) must be produced. This can be a generic form, or one customized by the carrier which will likely look very similar to the generic form but include the carriers corporate logo.

BOLs can be handwritten, typed, or created as the output from a computerized (usually web based) system. When completed, three copies are placed with the shipment. The time required for this step varies according to the method and processes of the customer.

PICK UP / (SCHEDULING)

Once a carrier has been selected and the BOL prepared, the carrier must be scheduled to retrieve the shipment. Again this can be done via phone or online. In order to have a good chance of having the pick up occur that day, the request for pick up must be made before 3:00 PM. This will vary market to market. It is possible to do the scheduling before preparing the BOL.

Upon arrival, the carrier will assign the shipment a tracking number called a PRO Number. This number is placed on all copies of the BOL and one copy of the BOL is returned to the shipper.

TRANSPORT

After the shipment has been retrieved by the carrier, it is considered to be in transit. . All shipments have a quoted transit time, but in most cases these transit times are not guaranteed. How closely a carrier performs relative to their quoted transit times depends on the carrier and how they operate their networks. The day of pick-up does not figure into the carriers published transit time.

For example, one of WWEs carriers, Roadrunner Transportation Services, only runs trucks between its terminals when the towed trailers exceed a certain capacity utilization. For routes that conduct a high volume of shipments, Roadrunner will perform very close,

Confidential Sales Training Freight Basics

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if not at its stated transit times. Routes that are not well utilized will often experience delays as the trailer waits to reach the desired capacity utilization.

DELVERY

Delivery occurs when the shipment is received by the receiver. At this point the carrier records a POD or Proof of Delivery, which includes the receivers name, the date and the time.

Time Required to Process Shipments

Excluding Light Package, the time required to process a freight shipment for pick up can be measured in hours, and even days. International freight shipments, particularly imports, will typically take days, while LTL and FTL shipments can take an hour or two depending upon the method employed.

One of WWEs strengths in the freight market is the incredible reduction in the amount of time required to prepare an LTL shipment. WWEs process reduces the length of time required from as much as two hours