Readers select their top performers

This year, 74 logistics service providers earned medals of excellence in our annual Quest for Quality survey.

By -- Logistics Management, 8/1/2000

This year, almost 3,000 readers responded to our annual Quest for Quality questionnaires, ranking the carriers they used in five performance areas critical to logistics excellence: on-time performance, value, information technology, customer service, and equipment and operations. Third-party logistics providers are measured on different criteria: carrier selection and negotiation, order fulfillment, transportation/distribution, inventory management, and logistics information systems.

Altogether, our readers chose 74 winners in 20 categories. It should be noted that some providers won twice or even three times in different categories.

Scoring Method

The scores shown in the magazine are weighted numbers. The weight is determined by the importance that readers attach to each criterion. For grading purposes, five is the top of the scale. Because readers assign varying degrees of importance to the criteria when selecting providers for different tasks, a specific attribute value has been developed for each category. (See the table below.) Shippers generally regard on-time performance as the most important attribute when it comes to excellence.

Survey participants also judged their vendors' performance on each of the five criteria, rating them on a scale of one to three (1=poor, 2=average, 3=outstanding). These scores were then averaged for each category and for each vendor. The weighted score is the product of the average importance rating in a category multiplied by the average performance score.

The weighted scores for each vendor are then totaled and an average weighted score for each category is calculated. Vendors receive the "Readers' Choice" designation when their total score meets or surpasses the average total weighted score for their category. However, vendors must receive a minimum number of reader responses to be included in the winners' circle.

Core Satisfaction

Besides rating carriers in general, the Quest for Quality survey asks shippers to rate their core vendors—carriers with which they have a partnership or contractual relationship. This provides some insight into whether shippers experience higher or lower levels of satisfaction in an established relationship. (See table at right.)

Not surprisingly, core carriers enjoy higher satisfaction ratings than do their noncore counterparts. For example, national LTL carriers had an overall satisfaction rating of 31.49. But the core carriers among the LTL providers in our survey enjoyed a satisfaction score of 35.94. Shippers clearly tend to reward carriers that provide service excellence with long-term relationships.

A further examination of the data in the table at right yields some interesting facts about the transportation industry. The railroads earned the lowest overall score of any mode with a 28.52, and intermodal service providers, which depend on rail service, had the second-lowest score with 28.81. The low rankings come as no surprise given the number of shippers' complaints this past year about a decline in rail service in the Northeast, which resulted from the takeover of Conrail by the Norfolk Southern and CSX. In addition, shippers have complained for years that intermodal service does not match the consistency and level of service provided by motor carriers.

Ocean carriers also fared poorly in comparison with other modes, receiving an average score of only 31.05. Again, shippers have long complained that the conference system—substantially weakened by last year's Ocean Shipping Reform Act—degraded steamship-line service levels. Prior to maritime deregulation, individual liners had little incentive to provide superior service because rates and service were regulated. If ocean deregulation works as well as its supporters contend, it's likely that these scores will begin to rise next year.

On the other end of the scale, two groups in particular—air-express carriers and regional motor carriers—got high marks for their overall performance. LTL carriers in the Midwest garnered the highest score with 34.01. Second place by a hair went to air-express carriers, with a score of 34.00. The Southern and Northeastern less-than-truckload carriers also earned high marks.

The high ratings in these modes reflect these carriers' continued efforts to meet shippers' needs for rapid, on-time deliveries as companies shorten their supply chains and reduce inventory stocks. Our 17th annual survey underscores the fact that these service providers are working hard to meet shippers' heightened expectations in this Just-in-Time economy.

More About the Quest

Logistics mailed Quest for Quality questionnaires to readers who were qualified buyers of transportation services. Twelve separate questionnaires, each representing a different mode of transportation or service category, were sent to buyers who purchased that particular service. The completed surveys then were tabulated using the scoring system described in the text.