25th Annual Quest for Quality Awards: Delivering on the promise
Which carriers and third party providers have delivered on their promise of world-class service? For the 25th year, our readers cast their votes for the most reliable service providers in logistics and transportation.
By Logistics Management Staff -- Logistics Management, 8/1/2008
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2008 Quest for Quality Awards: 25th Annual Quest for Quality Awards: Delivering on the promise THIRD-PARTY LOGISTICS: Shifting in the polls FREIGHT FORWARDERS: Foreign policy titans AIR CARRIERS: Delivering under pressure OCEAN CARRIERS: Steadfast incumbents RAIL/INTERMODAL: Popularity rising in the polls TRUCKLOAD: Influential long-haulers REGIONAL LTL: Perennial local front runners NATIONAL LTL: Canvassing the nation Order Online 
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The 2008 presidential election has the potential to usher in significant changes for the logistics and transportation sector. And while much weighs in the balance, many promises are being made to many different constituencies, forcing us to sift through the rhetoric to decide which candidate will best serve our country.
Well, the good news for the logistics and transportation market is that the votes are already in on which transportation and logistics providers are delivering on the promise of service. The staff of Logistics Management (LM) is thrilled to offer the shipping community the results of the 25th Annual Quest for Quality Awards. This year, 121 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 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, fuel prices, expanding shipper demands, and the list of additional operational pressures carriers and providers are facing today, walking away with a Quest for Quality award in 2008 is a true testament to a company's ability to adapt and stay relevant in an increasingly competitive environment.
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 6,171 total responses. In order to be a “winner,” a company had to receive at least 5 percent of the category vote.
Every Vote Counts
In the 2008 presidential race, it doesn't matter who comes in second. You get one vote and we get one winner. However, the best thing about the Quest for Quality is that it allows shippers to vote in the categories of services they actually use; in turn, they can help push the providers that they feel have best delivered on quality service into the hot lights for their acceptance speech.
This offers shippers—and the entire logistics and transportation community—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 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 2008. If you turn to Figure 1 you'll see that it was rated between 4.1 and 4.6 across the carrier categories. It's interesting to note that On-time Performance scores were up over 2007 in many of the Motor Carrier categories.
The second most critical attribute again this year was Value, followed by Customer Service. And for the second year in a row we found that shippers are putting just a bit more importance on a carrier's Equipment & Operations than on the level of Information Technology offerings. Considering that our 2008 Software Survey found that more and more shippers have spent more time and money upgrading their own IT and communications—including more on-demand solutions—this should not come as too much of a surprise.
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 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 are 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.
Voting Party Lines
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 2008, we asked readers to share their core-carrier relationship experiences.
As more and more shippers went out to bid, we found that the percentage of shippers using core carriers was down from our 2007 findings in every category except South/South Central LTL, Truckload-Bulk, Truckload-Industrial/Heavy-Haul, Truckload-Expedited, Rail/Intermodal, and Air Cargo (See Figure 2). These six categories saw subtle upticks or stayed even with last year's percentages.
So, after reporting last year 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 started to turn their backs in late 2007 and early 2008. Like last year, the Surface Package category led the way, with 75 percent reporting they're hopelessly devoted to a select few. The National LTL category, however, saw the biggest drop in percentage of core carrier usage, going from 70 percent of respondents in 2007 to 60 percent in 2008.
Multinational LTL, Midwest/North Central LTL, and Ocean Carriers came in second with 66 percent of the shippers responding in those categories reporting that they remain devoted to the core. And while those scores were relatively high, that number represents a drop from last year's core usage in each of those categories.
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, shippers have nearly always given higher quality ratings to their core carriers than their non-core carriers across every mode—and this year was no exception. Across every single category we found that the core satisfaction scores were higher than the overall satisfaction scores.
The good news this year is that we're actually seeing a troubling short-term trend being reversed. Last year the findings revealed that Overall Satisfaction and Core Satisfaction scores were trending downward over a two year period. Well, this year we find that just about every Overall and Core Satisfaction score has improved by almost a full point over 2007 results across the board, a sign that the nation's shippers are seeing overall service improvements.
What group of shippers are the most satisfied? Shippers who use Truckload-Industrial/Heavy-Haul report the highest Overall Satisfaction (35.71) and Core Satisfaction (40.24) scores this year, followed closely by Truckload-Expedited with an Overall score of 35.93 and a Core score of 38.81.
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 Wednesday, October 8, at the Hyatt Regency Denver Convention Center. 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 2008 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.
| FIGURE 1: Performance 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 | 2.6 | 1.8 | |
| Truckload, Van Lines, Expedited | 4.6 | 4.0 | 1.5 | 2.6 | 2.3 | |
| Rail/Intermodal Service Providers | 4.1 | 3.7 | 2.0 | 2.6 | 2.5 | |
| Ocean Carriers | 4.4 | 3.7 | 1.8 | 2.9 | 2.2 | |
| Airlines and Air Express Carriers | 4.6 | 3.6 | 2.2 | 3.0 | 1.6 | |
| Freight Forwarders | 4.6 | 3.6 | 2.2 | 3.0 | 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 | 3.5 | 2.0 | 2.7 |
| FIGURE 2: Core Carrier Satisfaction Ratings | ||||||
| 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 | 60% | 32.63 | 35.93 | |||
| Multiregional LTL | 66% | 32.59 | 36.36 | |||
| Surface Package | 75% | 34.38 | 37.46 | |||
| Northeast/Mid-Atlantic Regional LTL | 60% | 34.46 | 37.91 | |||
| South/South Central LTL | 63% | 34.53 | 37.37 | |||
| Midwest/North Central Regional LTL | 66% | 33.73 | 36.35 | |||
| Western Regional LTL | 59% | 33.59 | 36.62 | |||
| Truckload-Bulk | 51% | 33.16 | 35.82 | |||
| Truckload-Household Goods & High-Value Goods | 41% | 33.53 | 38.54 | |||
| Truckload-Industrial/Heavy-Haul | 45% | 35.71 | 40.24 | |||
| Truckload-Dry Freight | 53% | 33.47 | 36.35 | |||
| Truckload-Expedited | 51% | 35.93 | 38.81 | |||
| Rail/Intermodal | 65% | 32.88 | 33.48 | |||
| Intermodal Marketing | 58% | 32.23 | 37.34 | |||
| Ocean Carriers | 66% | 32.21 | 35.87 | |||
| Air Express | 64% | 33.91 | 36.63 | |||
| Air Cargo | 47% | 32.57 | 35.19 | |||
Viewpoint: The envelope please...
07/31/2009In the winner’s circle
07/31/2007
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