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  • PARCEL

    LTL/FTL

    AIR FREIGHT

    OCEAN FREIGHT

    RAIL/INTERMODAL

  • afms.comAFMS - Confidential

    Over 2,500 Clients Globally

    2

  • afms.comAFMS - Confidential

    Overview

    3

    1992

    12

    2,500

    45

    14

    $2.5bn

    65

    Founded by Mike Erickson CEO - One of the countries Leading Logistic Consulting Firms

    Consults Shippers on how to secure the best shipping contracts globally. (Parcel, LTL, FTL,

    Rail, USPS, & Air & Ocean Freight)

    We serve our clients from offices in twelve US regional locations, Canada (Toronto) & Europe.

    Head quarters located in Portland Oregon

    The number of professionals we employ across our international office network, consists of

    over 500 years combined experience

    Number of countries where we currently have clients - International Expertise including

    Canada, Europe & Asia

    Current number of clients who have used AFMS services globally. Expertise Includes:

    Contract Negotiation, Pre Bid Auditing, Bid Strategy, Design & Processing, Advanced

    Analytics, Benchmarking, Implementation & Execution of New Contracts

    AFMS Employees all previously worked for FedEx, UPS, DHL, TNT, UTi, CEVA, FTL/LTL

    Carriers, other freight forwarders, VOCCs & NVOCCs & Intermodal/Rail carriers

    Over $2.5 Billion saved in shipping costs for over 2,500 clients. Specializing in global

    transportation spends in excess of $50 million.

  • afms.comAFMS - Confidential

    AFMS Global Shipping ExpertsOver 650 Years of Carrier Experience

    4

  • afms.comAFMS - Confidential

    Mine & AnalyzeShipment Billing & Invoice Data

    Carrier Electronic Billing / Invoice Data Solutions:

    UPS Billing Center: http://www.ups.com/content/us/en/bussol/browse/billing.html

    FedEx Billing Online: http://www.fedex.com/us/fcl/pckgenvlp/online-billing/billing.html

    5

    ANALYZE parcel invoice data to better understand service usage, expenditures, accessorial charges and other variables. Objective: To develop a list of

    Opportunities & Priorities to be negotiated to generate the greatest cost savings

    impact.

    IDENTIFY accessorial charges - like Delivery Area Surcharges, Fuel Surcharges, Weekly Service Fees, Large Package Surcharges, Additional Handling.

    Service charges and the like - now account for as much as 30% of a shippers overall costs.

    QUANTIFY which surcharges have the greatest cost impact on your business and target those for waivers or reductions.

    In addition to pursuing lower accessorial charges, of course,

    try for better overall discounts and contract terms.

    http://www.fedex.com/us/fcl/pckgenvlp/online-billing/billing.html

  • afms.com6

  • afms.comAFMS - Confidential

    Competition for the business / Sales Reps Commission Impact

    Total revenue on the account

    Sensitive - Damageable Freighti.e. Electronics/TVs

    Automated vs. Paper bills of lading

    Multiple pickup locations & Delivery Density

    Carrier equipment / Labor required

    Zip codes delivered to:

    Volume by service level

    Size of your boxes (Dimensions)

    Top 10 Parcel Pricing VariablesThat Determine Your Discounts

    7

    Weights of packages / Zone Distribution1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    A) Ground - Commercial/ResidentialB) AirC) International

    Good Zip Codes9,800 Zips

    Unprofitable Zip Codes32,000 Zips

    A) 100% incumbentB) Split businessC) New opportunitiesD) Impact on Commissions +/-

  • afms.comAFMS - Confidential

    UPS, FedEx & DHLSales Commission Plans

    8

    The carriers sales teams can potentially earn up to

    30% of their salary in commission

    based on the yearly corporate sales / revenue goals

    Current Average (All combined Clients)

    Net Cost per Package

    ServicesCurrent Average

    Revenue per Piece

    2017 Corporate Sales

    Goals for Commission

    Ground $8.50 $8.93

    Air AM $38.00 $39.90

    Air PM $25.00 $26.25

    2 Day Air $12.00 $12.60

    International $24.50 $25.73

    Corporate Sales Goal Commission

    5% HIGHER

  • afms.comAFMS - Confidential

    North America Shipping Activity Profile

    9

    Service SummaryService Shipments % of Total Cost % of Total Weight Avg. Weight Avg. Cost Avg. Zone

    Ground 277,348 82.2% $2,745,606.84 61.3% 1,556,128 5.6 $9.90 6.08

    Next AM 6,964 2.1% $289,982.56 6.5% 35,960 5.2 $41.64 6.13

    Next PM 6,120 1.8% $189,630.40 4.2% 21,016 3.4 $30.99 6.13

    Second Day 28,340 8.4% $659,283.84 14.7% 311,764 11.0 $23.26 5.96

    3rd Day 2,056 0.6% $33,559.68 0.7% 10,036 4.9 $16.32 7.48

    Air Total 43,480 12.9% $1,172,456.48 26.2% 378,776 8.7 $26.97

    International 16,588 4.9% $557,759.28 12.5% 74,120 4.5 $33.62

    Grand Total 337,416 $4,475,822.60 2,009,024 6.0 $13.26

    Service Summary by Weight

    Weights Zone 2-8 AK/HI Canadian Other Next AM Next AK/HI Next PM 2nd Day 2nd AK/HI 3 Day Shipments %

    Letter 0 0 0 804 2,312 0 1,696 612 0 0 5,424 1.7%

    1 lb 57,836 0 4,760 3,748 1,020 0 672 3,864 0 1,376 73,276 22.9%

    2 lbs 75,700 0 1,108 728 452 0 712 352 0 148 79,200 24.8%

    3 lbs 60,968 0 444 572 740 0 1,752 1,164 0 32 65,672 20.6%

    4 lbs 11,560 0 644 92 116 0 32 888 0 20 13,352 4.2%

    5 lbs 12,488 0 584 200 200 0 396 876 0 16 14,760 4.6%

    6 lbs 6,944 0 276 72 92 0 116 224 0 44 7,768 2.4%

    7 lbs 4,300 0 244 36 56 0 48 240 0 28 4,952 1.6%

    8 lbs 3,728 0 248 84 140 0 68 628 0 84 4,980 1.6%

    9 lbs 2,632 0 56 20 112 0 28 132 0 8 2,988 0.9%

    10 lbs 3,908 0 128 16 48 0 0 92 0 16 4,208 1.3%

    11-15 lbs 12,804 0 396 44 376 0 196 764 0 56 14,636 4.6%

    16-20 lbs 4,608 0 160 136 108 0 128 528 0 12 5,680 1.8%

    21-25 lbs 12,936 0 652 16 168 0 24 44 0 44 13,884 4.3%

    26-30 lbs 2,772 0 136 20 152 0 12 112 0 20 3,224 1.0%

    31-40 lbs 1,736 0 60 8 160 0 24 16 0 20 2,024 0.6%

    41-50 lbs 816 0 24 4 40 0 28 20 0 8 940 0.3%

    51-60 lbs 1,016 0 4 16 12 0 8 0 0 4 1,060 0.3%

    61-70 lbs 204 0 4 4 16 0 4 0 0 4 236 0.1%

    71-80 lbs 24 0 0 0 0 0 0 0 0 0 24 0.0%

    81-90 lbs 84 0 0 0 0 0 0 12 0 0 96 0.0%

    91-100 lbs 36 0 0 0 4 0 0 0 0 0 40 0.0%

    101-200 lbs 20 0 12 8 16 0 4 140 0 0 200 0.1%

    200-500 lbs 200 0 12 8 0 0 4 304 0 12 540 0.2%

    501+ lbs 28 0 0 0 0 0 0 164 0 0 192 0.1%

    Total 277,348 0 9,952 6,636 6,340 0 5,952 11,176 0 1,952 319,356

    Percentage 87% 0% 3% 2% 2% 0% 2% 3% 0% 1% 100%

    Cost $2,745,606.84 $0.00 $225,957.40 $331,801.88 $289,982.56 $0.00 $189,630.40 $659,283.84 $0.00 $33,559.68 $4,475,822.60

    International TotalGround Air

    UPS Summary - Annualized

    Service Summary by Weight

  • afms.comAFMS - Confidential

    UPS GroundCommercial Package Analysis

    10

    Weights Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 AK/HI Total

    1 lb 2,744 1,364 7,700 9,148 7,588 15,400 13,892 0 57,836 20.85%

    2 lbs 3,116 2,412 9,740 9,980 10,824 17,504 22,124 0 75,700 48.15%

    3 lbs 2,512 1,924 7,228 7,296 9,172 14,716 18,120 0 60,968 70.13%

    4 lbs 492 364 1,380 2,168 1,884 2,644 2,628 0 11,560 74.30%

    5 lbs 500 552 1,964 2,348 1,716 2,520 2,888 0 12,488 78.80%

    6 lbs 340 348 1,056 1,052 740 1,468 1,940 0 6,944 81.30%

    7 lbs 176 124 532 784 500 1,072 1,112 0 4,300 82.85%

    8 lbs 180 60 508 660 580 724 1,016 0 3,728 84.20%

    9 lbs 104 116 432 540 388 476 576 0 2,632 85.15%

    10 lbs 248 80 968 724 324 712 852 0 3,908 86.56%

    11-15 lbs 716 432 1,984 2,224 1,536 3,024 2,888 0 12,804 91.17%

    16-20 lbs 204 116 920 880 544 876 1,068 0 4,608 92.83%

    21-25 lbs 540 256 1,748 2,308 1,520 3,196 3,368 0 12,936 97.50%

    26-30 lbs 216 64 416 592 320 504 660 0 2,772 98.50%

    31-40 lbs 124 152 316 220 224 368 332 0 1,736 99.12%

    41-50 lbs 44 68 160 176 104 108 156 0 816 99.42%

    51-60 lbs 36 100 272 228 92 108 180 0 1,016 99.79%

    61-70 lbs 8 24 8 76 56 28 4 0 204 99.86%

    71-80 lbs 0 4 0 8 4 4 4 0 24 99.87%

    81-90 lbs 16 4 28 0 0 24 12 0 84 99.90%

    91-100 lbs 0 8 8 8 8 0 4 0 36 99.91%

    101-200 lbs 0 4 0 0 4 8 4 0 20 99.92%

    200-500 lbs 4 12 16 44 24 32 68 0 200 99.99%

    501+ lbs 4 0 16 8 0 0 0 0 28 100.00%

    Total 12,324 8,588 37,400 41,472 38,152 65,516 73,896 0 277,348

    Percentage 4% 3% 13% 15% 14% 24% 27% 0%

    Cost $ 98,670.72 $ 73,460.40 $ 334,390.48 $ 390,023.20 $ 372,466.76 $ 664,031.32 $ 812,563.96 $ 0.00 $ 2,745,606.84

    Total Weight 85,148 56,816 242,236 267,620 194,388 331,048 378,872 0 1,556,128

    Avg Weight 6.91 6.62 6.48 6.45 5.10 5.05 5.13 0.00 5.61

    Avg Cost $ 8.01 $ 8.55 $ 8.94 $ 9.40 $ 9.76 $ 10.14 $ 11.00 $ 0.00 $ 9.90

    Cumulative %

    Ground

  • afms.comAFMS - Confidential

    Accessorial ReportAdd-On Charges

    11

    Accessorial add-ons typically represent 25%-30% of your total spend

  • afms.comAFMS - Confidential

    Domestic Price BenchmarkingUPS/FedEx Target Pricing Analysis

    12

  • afms.comAFMS - Confidential

    Sample FedEx Invoice

    13

  • afms.comAFMS - Confidential

    OverviewDeferredAgreements

    Minimum Weight Shippers Beware

    Early TerminationAddendum You Have the Right to Remain Silent

    Actual versus Billed Weights Avoiding the Dim

    Shipping Charge Corrections

    Minimums Ground &Air

    Minimum Billable Weight What Is This?

    Other Getchas IT Constraints

    Late Payment Fee

    Ramping Up

    Fuel Impact

    General Rate Increase

    14

  • afms.comAFMS - Confidential

    Rebates / Deferred Agreeme