The best of the best in transportation and logistics...that's what the Quest for Quality survey recognizes. Each year, Logistics Management's readers select the nation's top carriers, warehouse operators, and third-party providers for our annual prize for service excellence.

This time out, 118 carriers, warehouse operators, and contract distribution companies won gold medals in the 21st annual Quest for Quality.

Earlier this year, Logistics Management and Reed Research Group surveyed readers who are qualified buyers in their respective service modes. Surveys were sent to readers both by mail and e-mail; the results were based on 2,468 completed surveys. A minimum of approximately 200 completed surveys was used to determine winners in each service category, with the exception of Warehouse Services, which received 109 responses.

There were a few changes from past years' surveys. For example, two previous categories—High-Value Goods Carriers and Household-Goods Carriers—were combined into a single category representing van lines. Because of the explosive growth in time-critical shipment services, we also created a new category to honor the leading expedited carriers.

As in the past, readers who filled out questionnaires about carriers and warehouses were asked to rate them on five key areas vital to logistics excellence: on-time performance, value, information technology, customer service, and equipment and operations. Third parties, on the other hand, are judged on criteria that are more appropriate to their supply chain role. They are rated on the following criteria: carrier selection and negotiation, order fulfillment, transportation/distribution, inventory management, and logistics information systems. The survey also asked readers for comments on what constitutes excellent performance in each area.

The scores reported for the quality-award winners are weighted to reflect how much importance readers attached to the criteria used in the rankings. Respondents were asked to rank those attributes on a five-point scale, with 5 being the highest and 1 being the lowest. (See Figure 1 on Page 36.)

Because readers assign varying degrees of importance to those attributes when selecting providers for different tasks, we have calculated specific values, or weights, for the five attributes in each service category. For example, shippers generally regarded on-time performance as the most important attribute in most categories and ranked it high on the 1-to-5 scale. Thus the ranking for the on-time performance attribute, although different for each mode, was 4.4 or higher in each category.

Next in importance for most respondents was overall value. Regardless of mode, the attribute for value was rated at about 3.6 while customer service hovered around 3.0 this year. Less important to readers were categories for information technology and equipment and operations.

Participants in the survey then evaluated their providers' performance on each of the five attributes, grading them on a scale of one to three (1 = poor, 2 = average, 3 = outstanding). The scores were averaged for each category and for each vendor. The weighted scores for each vendor in a category represent the product of the average importance rating for the attributes in that category multiplied by the average performance score for that vendor.

The weighted scores for each vendor in a category are then totaled, and the average weighted score for that category is calculated. Providers earned an award when their total score met or exceeded the average total weighted score for their category. However, vendors had to receive a minimum number of reader responses to earn an award—similar to a Major League baseball batter who must have a certain number of plate appearances to qualify for honors as a league-leading hitter.

In addition to rating the performance of individual providers, the Quest for Quality survey also explores shippers' relationships with their core carriers—select groups of vendors with whom shippers form partnerships. To start with, we asked whether shippers had formed core-carrier relationships in each mode. Next, we appraised these partnerships to gauge whether shippers felt they experienced higher or lower levels of satisfaction in an established relationship. (See Figure 2 on Page 36.)

Some 75 percent of respondents reported that they had formed core-carrier relationships with their air express carriers—the highest percentage in the 2004 study. That's not surprising since over the last five years air express has consistently landed in the top three for core-carrier relationships.

The next most common group for core-carrier relationships was surface package carriers, with 65 percent. On the other end of the scale, shippers formed the fewest partnerships with heavy-haul carriers; just 20 percent said they were involved in such relationships.

As a rule, shippers have conferred higher quality ratings on their core carriers than they have on non-core carriers. With one exception, that pattern held true again this year. Core carriers on average scored at least two points higher than their non-core counterparts. The one departure involved standard rail service, where the general satisfaction score of 28.60 exceeded by a tad the score of 28.34 given to core rail carriers. The likely explanation: Rail shippers are forced to develop relationships with the railroads whose tracks serve their warehouses. With their choices limited, it's not surprising that rail shippers find hardly any distinction between core carriers and regular service providers.

By the way, the core satisfaction rating for intermodal service providers didn't beat the standard rail score by much. Intermodal's core satisfaction rating of 31.59 marginally bested the standard rail score of 31.21.

Who earned the highest overall satisfaction score? That honor went to the newly combined category for van lines. Household goods and high-value goods carriers received a 36.29 rating. The second-highest overall satisfaction score was earned by warehouse service providers, which received a 35.67 rating. Coming in third was the new category for expedited motor carriers, which earned a 35.26 mark.

As for the lowest overall satisfaction scores, once again that distinction went to standard rail service, which received a rating of 28.60. Standard rail service also received the lowest score last year, and in 2002 it was the second lowest on the scale. This year, the second-lowest satisfaction score went to ocean carriers, with a 30.83 rating.

All of the details, including a list of winners in each category and their scores, can be found in the series of articles that begins on Page 41.

Editor's Note: Full reports showing the scores for all companies in the survey are available from Logistics Management. There are seven reports (LTL, truckload, rail/intermodal, airfreight, ocean, third-party logistics, and warehousing.) The full set can be purchased for $550. Individual reports may be purchased for $99 each.

For more information or to obtain an online order form, visit our Web site (www.logisticsmgmt.com/quest).