In the winner’s circle
In this year's Quest for Quality Awards, 119 providers of transportation and logistics services will don the floral wreath after posting the highest scores across our lists of critical service criteria.
By Staff -- Logistics Management, 8/1/2007
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Quest For Quality Awards
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There’s nothing quite as exciting as watching the top thoroughbreds in the world thundering toward the finish line in a run for the roses. Even in the most prestigious stakes races, only one horse enters the winners circle. But, that’s not the case in our annual Quest for Quality Awards. This year, 119 providers of transportation and logistics services will don the floral wreath after posting the highest scores across our lists of critical service criteria.
For the past 23 years Logistics Management’s (LM) Quest for Quality has been regarded in the transportation and logistics industry as one of the most important measures of customer satisfaction and performance excellence. To determine the best of the best, LM readers rate carriers and third-party logistics (3PL) companies on the basis of service quality. And considering the myriad operational pressures carriers and providers are facing today, walking away with a Quest for Quality award is a true testament to a company’s ability to adapt and stay relevant in an increasingly competitive environment.
To determine who keeps the best service pace, LM readers evaluate companies in all modes, choosing the top performers in each of the categories for motor carriers, railroad and intermodal services, ocean carriers, airlines, freight forwarders, and third party/contract logistics services.
This past spring, LM and Reed Research Group surveyed readers who are qualified buyers of logistics and transportation services via email. This year our research group received 6,527 total responses—a new record. In order to be a “winner,” a company had to receive at least 5 percent of the category vote.
Win, place, show
While only one horse is considered the outright winner, the savvy gambler has many ways to bet on the horse that comes in second or even third. He can bet win, place, or show—or get a little more exotic and put his money down on the daily double, the exacta, or the trifecta. For the gambler, this broadens his chances and increases his list of winners. The Quest for Quality works in a similar way, offering shippers a look at not only the overall winner in any given category, but a broad list of companies that finished well above the average. Here’s how we do it.
Transportation service providers are rated on LM’s five key criteria: On-time Performance, Value, Customer Service, Information Technology, and Equipment & Operations. Due to the nature of supply chain services offered by third-party players, a different set of criteria is used to judge this category. Third parties are rated on the following attributes: Carrier Selection & Negotiation, Order Fulfillment, Transportation & Distribution, Inventory Management, and Logistics Information Systems.
The evaluation itself is a weighted metric. The scores take into account the importance readers attach to each attribute. Each year, readers are first asked to rank the attributes in each category on a five-point scale, with 5 representing the highest value and 1 representing the lowest value. Our research team then uses those attributes’ rankings to create weighted scores in each category.
For example, readers have historically placed the single highest value on On-time Performance—and they’ve done so again in 2007. If you turn to Figure 1 on Page 34, you’ll see that it was rated at 4.5 or higher this year across the carrier categories. As a matter of fact, On-time Performance scores were up over 2006 in every category with the exception of National/Multiregional LTL.
The second most critical attribute again this year was Value, followed by Customer Service. However, tradition was broken this year as we found in some cases shippers put more importance on Equipment & Operations than carriers’ Information Technology offerings. Considering lingering capacity issues, and the fact that shippers and carriers have taken positive strides over the past three years to improve IT and communications, that subtle shift is not a surprise.
After readers have ranked these key attributes in order of importance, they grade each provider that they currently use on each of the five core Quest for Quality attributes, rating them on a scale of one to three (1=poor, 2=average, 3=outstanding). To produce a weighted score, the research team then multiplies the provider’s average scores for each attribute by the attribute’s ranking.
Next, the weighted scores calculated for all five attributes for a given vendor are added together to create an aggregate number. Companies score a quality win when their total scores exceed the average total weighted score in their category.
But, remember, providers must receive a minimum number of reader responses to qualify for a win—at least 5 percent of the total base for the category.
Betting on the favorite
In addition to rating the performance of individual companies, the Quest for Quality survey also explores shippers’ relationship with their core carriers—that select group of vendors to whom readers tender most of their business. Again in 2007, we asked readers about their core-carrier relationships.
This year we found that 77 percent of shippers who buy Surface Package services report that they’ve formed a core-carrier relationship. While that number is down two points from last year’s, the category came in with highest percentage in 2007. National LTL, Multiregional LTL, Ocean Carriers, and Air Express are all tied for second this year, with 70 percent of shippers who buy these services reporting that they have established a tighter partnership with their carriers (See Figure 2).
It’s important to note, however, that we saw a considerable jump in the number of shippers who say they’ve embraced the core-carrier concept. The overall average percentage of shippers who report having formed a core-carrier relationship rang in at 60 percent, a sizable jump up from 53 percent in 2006.
Next, we asked respondents to appraise those relationships in order to gauge whether shippers experience higher levels of satisfaction in partnership arrangements. As a general rule over the many years of Quest for Quality, shippers have nearly always given higher quality ratings to their core carriers than their non-core carriers—and this year was no exception. Across every single category we found that the core satisfaction scores were higher than the overall satisfaction scores.
But while shippers are clearly more satisfied with their core-carriers, we have noticed a somewhat troubling trend that began with our 2006 report. Overall satisfaction and core satisfaction scores are trending downward over the past two years. As a matter of fact, the survey found that core satisfaction scores were down over 2006 findings in every category with the exception of Truckload-Expedited (38.3), Rail/Intermodal (30.69), and Air Cargo (35.00). And while core satisfaction scores continue to be higher than non-core, our team found that the 2007 overall satisfaction scores were down in 13 of the 16 categories compared to the 2006 results.
While Truckload-Expedited earned the highest overall satisfaction marks with its 35.11 composite score, the 2007 overall stragglers were Rail/Intermodal providers with a composite of 29.50—the fourth year in the bottom position. When it came to core satisfaction scores, the front runners in 2007 were Truckload-Expedited, Truckload-Industrial/Heavy Haul, Northeast/Mid-Atlantic Regional LTL, South/South Central LTL, and Surface Package.
Editor’s note: The editorial staff of Logistics Management would like to thank the record number of readers who took time out of their busy days to complete and submit the 2007 Quest for Quality ballots. Your time, effort, and insight helped Logistics Management maintain the Quest for Quality as the premier benchmark study for logistics and transportation quality and service.
In accordance with tradition, Logistics Management will hold an awards dinner following the final day of the Council of Supply Chain Management Professionals (CSCMP) Annual Conference. This year’s event will be on October 24 at the Philadelphia Marriot. The Quest for Quality awards dinner is one of the most anticipated evenings on the logistics and supply chain calendar. Our entire staff will be on hand to congratulate the 2007 Quest for Quality winners.
Full reports that include the scores for all of the carriers that were ranked in the survey are available for purchase from Logistics Management. Reports may be purchased on an individual basis for $99 or as a complete set for $550. For more information or to obtain an order form, contact Julianna Ness (jness@reedbusiness.com).
Figure 1: Performance and Attributes Importance
| Company type | On-time performance | Value | Information Technology | Customer Service | Equipment & Operations |
| Source: Logistics Management, Reed Research Group | |||||
| National/Multiregional LTL and Surface Package Carriers | 4.5 | 4.1 | 2.0 | 2.7 | 1.7 |
| “Truckload, Van Lines, Expedited” | 4.8 | 3.7 | 1.7 | 2.6 | 2.2 |
| Rail/Intermodal Service Providers | 4.6 | 4.0 | 1.7 | 2.5 | 2.2 |
| Ocean Carriers | 4.5 | 3.4 | 1.9 | 3.1 | 2.2 |
| Airlines and Air Express Carriers | 4.8 | 3.6 | 2.0 | 3.0 | 1.6 |
| Freight Forwarders | 4.8 | 3.6 | 2.0 | 3.0 | 1.6 |
| Carrier Selection & Negotiation | Order Fulfillment | Transportation/Distribution | Inventory Management | Logistics Information Systems | |
| Source: Logistics Management, Reed Research Group | |||||
| 3PL | 3.0 | 3.4 | 3.4 | 2.6 | 2.7 |
Figure 2: Core Carriers Satisfaction Ratings
| Mode | % using Core Carriers | Overall Satisfaction Score | Core Satisfaction Score |
| * Average weighted score Source: Logistics Management, Reed Research Group |
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| National LTL | 70% | 29.91 | 33.06 |
| Multiregional LTL | 70% | 31.05 | 35.04 |
| Surface Package | 77% | 34.20 | 37.28 |
| Northeast/Mid-Atlantic Regional LTL | 66% | 33.94 | 37.66 |
| South/South Central LTL | 63% | 33.97 | 37.30 |
| Midwest/North Central Regional LTL | 68% | 32.92 | 36.43 |
| Western Regional LTL | 65% | 33.63 | 36.64 |
| Truckload-Bulk | 46% | 32.25 | 35.48 |
| Truckload-Household Goods & High-Value Goods | 44% | 31.62 | 36.87 |
| Truckload-Industrial/Heavy-Haul | 40% | 33.62 | 37.93 |
| Truckload-Dry Freight | 54% | 32.01 | 35.44 |
| Truckload-Expedited | 48% | 35.11 | 38.30 |
| Rail/Intermodal | 60% | 29.50 | 30.69 |
| Ocean Carriers | 70% | 31.43 | 34.37 |
| Air Express | 70% | 33.08 | 36.67 |
| Air Cargo | 42% | 31.81 | 35.00 |
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Q4Q Home | Cover Story | National LTL | Regional LTL | Truckload Rail/Intermodal | Ocean Carriers | Air Carriers | Freight Forwarders | Third-Party Logistics |
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