The Quest Continues

Now in its 15th year, the Quest for Quality remains at the forefront of surveys measuring what matters most to transportation and logistics professionals.

By Jim Thomas -- Logistics Management, 8/1/1998

In 1998, Logistics Magazine's "Quest for Quality" survey celebrates its 15th anniversary as the largest customer-satisfaction study in the fields of transportation and logistics. Close to 3,000 readers participated in this year's study, which recognizes vendor excellence in trucking, rail, intermodal, air freight, ocean shipping, express services, and third-party logistics.

Logistics has evolved into a new discipline over the past 15 years and the Quest has changed to reflect this transformation. The survey began in 1983 as the "Carrier Marketing Awards." It measured carriers in terms of service, communications, pricing, and convenience--all critical areas in the post-deregulation transportation environment. The 1998 survey, by contrast, rates providers in the areas of on-time performance, value, customer service, equipment/operations, and information technology.

This is the first year readers have been asked to rate their logistics providers' proficiency in information technology. If it is true that information is replacing inventory, then a company's competitiveness will be fundamentally affected by how well it uses supply-chain-management software systems, communications systems, tracing and tracking tools, electronic data interchange, the Internet, and electronic commerce. Internet access among survey participants ranges from 44 percent for dry-freight/industrial truckload shippers to 72 percent for buyers of third-party logistics services (see "Plug In and Turn On," at left). Leading shippers understand that information no longer can be contained within the four walls of a single company; it must be shared among supply-chain partners to be effective.

Another addition to the 1998 survey is a third-party logistics section. As outsourcing continues to grow in importance (it represented 4.0 percent of the United States' $862 billion total logistics bill in 1997), Logistics will monitor our readers' satisfaction with the wealth of 3PL services available.

What's the Score?

Perhaps the most significant change to the survey is the deployment of a rating system that is more user relevant. This year, survey participants indicated which criteria were most important in measuring a vendor's performance. These results, in turn, influenced the performance scores that Logistics uses to identify the "Best of the Best" companies.

Here's how the rating system for carriers works. (Performance areas for 3PLs differ and are explained on Page 67.) Survey participants were asked to rate carriers in the following five performance areas:

* On-time performance: On-time pickup and delivery, consistent and dependable schedules and transit times, and equipment availability;

* Value: Competitive rates, pricing commensurate with service level, and simplified pricing;

* Information technology: Tracing and tracking, electronic data interchange, and Internet and electronic commerce capabilities;

* Customer service: Prompt claims settlement, ability to trace and expedite shipments, problem resolution, and courtesy;

* Equipment and operations: Availability of equipment, condition of equipment, safety record, and incidence of loss and damage.

Respondents ranked the importance of each of these attributes on a scale from one to five, with five being most important. Because the attributes' importance varied from mode to mode, mode-specific averages were developed (see chart below).

Readers also rated their vendors' performance, giving them a score from one to three (1 = poor, 2 = average, 3 = outstanding) in each of the five performance areas. These scores were averaged for each mode as well as for each carrier. A weighted score was developed as the product of the average importance ranking multiplied by the average performance score.

The weighted scores for each vendor were totaled. Vendors received the designation "Best of the Best" when their total weighted score met or surpassed the average total weighted score for their mode. The charts that accompany each modal report illustrate this scoring system. Congratulations are in order for the 81 vendors that achieved "Best of the Best" status for 1998.

Results of the Quest

Across all modes of transportation, survey participants report that on-time performance is the most critical factor. On the five-point importance scale, the rankings for on-time performance ranged from 4.5 to 4.7. Value fell next in line, with rankings between 3.3 and 3.8. Information technology was deemed to be the least important criterion by which buyers judge their transportation and logistics vendors, except in the airfreight sector, where information technology surpassed equipment/operations.

Most respondents measure criteria such as on-time performance and value, but few integrate these measurements into a formal quality program; that is, a program that incorporates goals, benchmarking, and continuous improvement. Rail/intermodal shippers report the greatest use of formal quality programs, at 50 percent, followed by bulk carriers at 48 percent. If logistics truly is to become a business-critical practice, these results may suggest that logisticians must do a better job of measuring their vendors' productivity.

<BD+>About the Quest for Quality Survey

Quest for Quality questionnaires were mailed in March to Logistics readers who are qualified buyers of transportation services. Eleven separate questionnaires--representing different modes of transportation--were each sent to 3,500 buyers who purchase that particular service. The completed questionnaires were mailed to Research Results, an independent firm, for tabulation. The scoring is explained in the article that begins on this page.

As an incentive to fill out the survey, respondents were asked to select a charity to which they would like Logistics to make a donation. In accordance with the respondents' instructions, Logistics has donated $500 to the American Cancer Society and the American Heart Association.

Full reports showing scores for all carriers rated in six major categories (LTL, truckload, rail/intermodal, air, ocean, and third-party logistics) are available for $99 apiece. A combined report, with results for all six categories, is available for $550. For more information or to order a report, call Diane Legradi at (610) 964-4310.

Ranking the Performance Attributes' Importance by Mode

Carrier Type On-Time Value Info Tech Customer Equipment

Performance Services &Operation

Air-Service Providers 4.7 3.6 1.8 3.1 1.7

Bulk Motor Carriers 4.7 3.3 1.3 2.9 2.8

Dry Freight/Industrial Haulers 4.6 3.4 1.5 3.0 2.5

HHG/High-Value Goods Carriers 4.6 3.3 1.5 3.2 2.4

International Ocean Carriers 4.5 3.7 1.5 2.8 2.6

Rail/Intermodal Service Providers 4.6 3.5 1.6 2.7 2.6

National/Multiregional LTL Carriers4.6 3.7 1.8 3.0 1.9

Western LTL Carriers 4.7 3.7 1.8 3.1 1.8

South/South Central LTL Carriers 4.7 3.8 1.7 3.0 1.8