Logistics Management's 2009 Quest for Quality Awards: The Envelope Please...
The stage is set, the tension is thick. Which carriers and third-party providers will walk the red carpet and accept a coveted Quest for Quality Award for their service performance over the past year?
By Logistics Management Staff -- Logistics Management, 8/1/2009
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 2009 Quest for Quality Awards: 26th Annual Quest for Quality Awards: The Envelope Please... THIRD-PARTY LOGISTICS: Kings of Networking FREIGHT FORWARDERS: Best foreign performance AIR CARRIERS: Still flying high OCEAN CARRIERS: Comeback story coming soon RAIL/INTERMODAL: Rising stars TRUCKLOAD: Truckload method actors REGIONAL LTL: Best use of special effects NATIONAL LTL: High drama on the open road Thanks to our Sponsor: 
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Much like actors, directors, and the cinematographers that create films, carriers and logistics services providers are constantly being judged and critiqued on their performance and innovation. However, the editors of Logistics Management (LM) could argue that winning a coveted Quest for Quality Award should hold a little more weight than what's annually handed to some of our favorite stars.
While Oscars are typically awarded for the work on a single movie, the winners of the Quest for Quality are awarded for a much grander body of work. In fact, Quest for Quality recipients have consistently proven that they're meeting ever-increasing shipper demands in what is now a 24/7 global marketplace where actions—and mistakes—can be tracked down to the day, hour, minute, or even second.
But more importantly, instead of being voted on by a hand-picked academy of industry insiders like the Oscars, Quest for Quality winners are voted on by the readers of Logistics Management—the customers that put these carriers and providers to the test around the clock in countries throughout the world. If fact, this year we had 6,485 logistics and supply chain decision makers wage their vote, that's 400 more than we had in 2008.
Well, the time has come again. We've rolled out the red carpet, the tension is thick, and the lights are hot. The staff of LM is thrilled to offer the shipping community the results of the 26th Annual Quest for Quality Awards. This year, 115 providers of transportation and logistics services have received the ultimate vote of confidence, posting the highest scores across our lists of critical service criteria.
For more than a quarter century now, LM's Quest for Quality has been regarded in the transportation and logistics industry as the most important measure of customer satisfaction and performance excellence. To determine the best of the best, LM readers rate carriers and third-party logistics (3PL) companies strictly on the basis of service quality.
And considering the current economy, shrinking freight volumes, shipper pressure on rates, and the list of additional operational challenges carriers and providers are facing today, walking away with a Quest for Quality award in 2009 is a true testament to a company's ability to adapt and stay relevant in what may be the most difficult operating environment since the Great Depression. The next few pages are devoted to celebrating this remarkable achievement.
And the nominees are…
Before we open any envelopes, let's take a more detailed look at how we arrive at our list of recipients. One of the best things about the Quest for Quality is that it allows shippers to vote in the genre of services they actually use and fully understand; in turn, they can vote for the providers that they feel have best delivered on quality service in specific niches.
To determine who wins the vote, LM readers evaluate companies in all modes, choosing the top performers in categories including motor carriers, railroad and intermodal services, ocean carriers, airlines, freight forwarders, and third party/contract logistics services.
From January through May of this year, LM and Reed Research Group surveyed readers who are qualified buyers of logistics and transportation services. This year our research group received 6,485 total responses. In order to be a “winner,” a company had to receive at least 5 percent of the category vote. The result of this overall effort is a crystal clear 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 services offered by third-party players, a different set of criteria is used to judge this category.
Third-party logistics providers 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 2009. If you look at Figure 1 you'll see that it was rated between 4.5 and 4.7 across the carrier categories. It's interesting to note that the On-time Performance “importance” scores were significantly up over the 2008 averages.
The second most critical attribute again this year was Value, followed by Customer Service. This year we found that shippers are putting equal weight on Equipment & Operations and Information Technology offerings. Not surprising, since so many shippers have told us over the past year that they're scraping manual/paper-based systems and investing in automation and efficiency gains—and they're expecting their carriers to be just as savvy.
After readers have ranked these key attributes in order of importance, they then grade each provider that they currently use on each of the five core Quest for Quality attributes, rating them on a scale of 1 to 3 (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 are calculated for all five attributes for a given vendor and 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.
Hanging with your entourage
In addition to rating the performance of individual companies, the Quest for Quality survey also explores shippers' relationships with their core carriers—that select group of vendors to whom readers tender most of their business. Again in 2009, we asked readers to share their core-carrier relationship experiences.
As more and more shippers went shopping for better rates, we found that the percentage of shippers using core carriers dropped significantly over our 2008 findings. In fact, every mode saw a sizeable percentage drop with the exception of National LTL, Intermodal Marketing, and Ocean Carriers (See Figure 2).
So, after reporting two years back that we had seen a near-record jump into the core carrier concept during late 2006 into 2007, it appears that a considerable number of shippers have started to turn their backs to the core carrier concept as they went to market to take advantage of the current rate environment.
Like last year, the Surface Package category led the way, with 70 percent reporting they're hopelessly devoted to a select few. National LTL and Ocean Carriers shippers are the second most loyal core-carrier believers (both modes at 68 percent).
The mode category that saw the single biggest drop in the percentage of shippers using core carriers was Midwest/North Central Regional LTL. This category saw a shocking 26 percentage-point drop from last year's number, signally that shippers looking for service in this region have certainly opened up their options and are looking for deals.
Next, we asked respondents to appraise those core 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 reports, shippers have nearly always given higher quality ratings to their core carriers than their non-core carriers across every mode—and this year, again, was no exception. Across every single category we found that the core satisfaction scores were higher than the overall satisfaction scores.
In our 2008 findings, we began to see a troubling short-term trend being reversed. In 2007 our findings revealed that Overall Satisfaction and Core Satisfaction scores were trending downward over a two year period. Well, in 2008 we found that just about every Overall and Core Satisfaction score had improved by almost a full point.
In 2009 we found that Overall Satisfaction scores have generally stabilized; however, we found that half of the Core Satisfaction scores have dropped—in some cases by a full point—from their 2008 plateaus.
Has the current rate environment forced a change in how shippers are viewing the service they've been receiving from the tightest members of their transportation entourage? This year's Core Satisfaction scores certainly raise some questions.
So, what group of shippers are most satisfied? Shippers who use Northeast/Mid-Atlantic Regional LTL report the highest Overall Satisfaction (35.78), followed closely by South/South Central LTL with an Overall score of 35.49. The highest Core Satisfaction score posted this year was by Northeast/Mid-Atlantic Regional LTL with an impressive 39.78—the second highest score in this category over the past two years.
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 take place on Wednesday, September 23rd, at the at the Intercontinental Hotel, Seville Ballroom, Chicago, Ill. The reception and cocktail hour begins at 5:30 p.m. with the dinner following immediately at 6:30 p.m.
The Quest for Quality Awards Dinner is one of the most anticipated evenings on the logistics and supply chain yearly calendar. Our staff will be on hand to congratulate the 2009 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, go to logisticsmgmt.com.
| 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 | 4.6 | 4.0 | 2.1 | 2.7 | 1.6 |
| Truckload, Van Lines, Expedited | 4.5 | 4.0 | 1.5 | 2.8 | 2.2 |
| Rail/Intermodal Service Providers | 4.5 | 4.1 | 1.6 | 2.6 | 2.1 |
| Ocean Carriers | 4.6 | 3.7 | 1.9 | 3.0 | 1.7 |
| Airlines and Air Express Carriers | 4.7 | 3.6 | 2.1 | 3.1 | 1.6 |
| Freight Forwarders | 4.7 | 3.6 | 2.1 | 3.1 | 1.6 |
| Carrier Selection/Negotiation | Order Fulfillment | Transportation/Distribution | Inventory Management | Logistics Information Systems | |
| Source: Logistics Management, Reed Research Group | |||||
| 3PL | 3.5 | 3.3 | 3.3 | 2.1 | 2.8 |
| Mode | % using Core Carriers | Overall Satisfaction Score | Core Satisfaction Score |
| *Average weighted score All scores are weighted. Weighted scores are determined by multiplying the average raw scores by the average importance of each attribute (1= least important; 5= most important). To find the attributed weights for this category, see the introduction to the Quest for Quality report. Source: Logistics Management, Reed Research Group |
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| National LTL | 68% | 32.47 | 36.43 |
| Multiregional LTL | 58% | 33.00 | 37.58 |
| Surface Package | 70% | 35.78 | 38.59 |
| Northeast/Mid-Atlantic Regional LTL | 48% | 34.31 | 39.78 |
| South/South Central LTL | 47% | 35.49 | 38.72 |
| Midwest/North Central Regional LTL | 40% | 32.91 | 36.60 |
| Western Regional LTL | 40% | 33.22 | 35.55 |
| Truckload-Bulk | 49% | 33.50 | 35.24 |
| Truckload-Household Goods & High Value Goods | 40% | 32.51 | 36.58 |
| Truckload-Industrial/Heavy-Haul | 43% | 35.01 | 35.59 |
| Truckload-Dry Freight | 48% | 33.03 | 35.91 |
| Truckload-Expedited | 49% | 34.72 | 37.75 |
| Rail/Intermodal | 60% | 32.03 | 33.18 |
| Intermodal Marketing | 62% | 33.50 | 37.25 |
| Ocean Carriers | 68% | 32.92 | 36.94 |
| Air Express | 62% | 34.49 | 38.33 |
| Air Cargo | 31% | 34.50 | 34.56 |
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