Clinching the quality pennant

Which carriers and third parties provide the best service? For the 22nd year, our readers name their top picks.

By Staff -- Logistics Management, 8/1/2005

In baseball, only one team in each league can clinch the pennant. The Quest for Quality survey, by contrast, found 121 providers of logistics and transportation services who earned quality pennants. These are the companies that scored the most victories with shippers this past year, racking up the best earned-run average for excellence and knocking out the most home runs for service.

For the past 22 years, Logistics Management's readers have rated carriers and third-party logistics companies on the basis of service quality. They evaluate companies in all modes, choosing the most valuable players in each of the leagues for motor carriers, railroads and intermodal services, ocean carriers, airlines, freight forwarders, and contract logistics services.

This past spring, Logistics Management and Reed Research Group surveyed readers who are qualified buyers of transportation and logistics services. More than 2,000 LM readers took part in the evaluations after being contacted by e-mail and telephone. A minimum of 200 completed evaluations was used to determine the winners in each service category.

For more information on Quest for Quality, click here.

The Score Sheet

Baseball aficionados like to use metrics to rate teams and players. At Logistics Management, we use our own metrics to identify the best in the logistics game.

Transportation service providers are rated on five criteria, or attributes: performance, value, customer service, information technology, and equipment and operations. However, an alternate set of criteria is used to judge third-party logistics providers because of the different role they play in the supply chain. Those companies are rated on the following attributes: carrier selection and negotiation, order fulfillment, transportation and distribution, inventory management, and logistics information systems.

The evaluation itself is a weighted metric. The scores take into account how much importance the 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. We then use the attributes' rankings to create weighted scores in each category. For example, readers historically (and again this year) have placed the highest value on "on-time performance." If you look at Figure 1 on Page 37, you'll see that on-time performance was rated at 4.2 or higher in this year's survey. The second most important attribute was "value," followed by "customer service."

Readers generally place the fourth-highest emphasis on "information technology." There are some exceptions, such as in rail and ocean carriage, where users hold the quality and availability of "equipment and operations" in higher regard. As a general rule, however, readers place the least importance on that attribute.

After they've ranked the attributes in order of importance, shippers taking part in our Quest for Quality survey grade each provider that they currently use on each of the five attributes, rating them on a scale of one to three (1 = poor, 2 = average, and 3 = outstanding.) For each provider, we multiply the average score they tallied for each attribute by the attribute's ranking to produce a weighted grade.

Next, the weighted scores calculated for all five attributes for a given vendor are added together to create an aggregate number. Companies earn a quality pennant when their total scores exceed the average total weighted score in their award category. However, vendors had to receive a minimum number of reader responses to qualify for 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 companies, the Quest for Quality survey also explores shippers' relationships with their core carriers, the selected group of vendors to whom shippers tender most their business. As in the past, we asked survey participants whether they have formed core-carrier relationships.

This year, our survey found the highest degree of core-carrier partnerships in the air express category, where 68 percent of shipper respondents reported that they used core carriers. Right behind were respondents in the freight forwarder category, with 67 percent forming core-carrier relationships.

Overall satisfaction scores were up from last year. In fact, ratings increased in 13 out of 19 categories. Surface package carriers got the highest numbers, with a 37.07 composite score for overall satisfaction. Northeast and Mid-Atlantic carriers came in second with a composite ranking of 36.04, while air express carriers nipped at their heels with a score of 36.02.

As has been the case for the past two years, standard rail service earned the lowest overall satisfaction scores. The composite score for standard rail service stood at 31.51. Given the number of problems reported by rail shippers, who have long had difficulties obtaining equipment and frequently are faced with significant shipping delays, the low grade was not surprising. The only good news for the railroads is that the score improved from last year's rating of 28.60.

Editor's Note: The editors of Logistics Management would like to thank all of the readers who completed and submitted Quest for Quality questionnaires. We appreciate your participation.

Full reports showing the scores for all carriers ranked in the survey are available for purchase from Logistics Management. There are six reports: LTL, truckload, rail/intermodal, airfreight, ocean, and third-party logistics. The reports may be purchased on an individual basis or as a complete set. For more information about the reports or to obtain an order form, go to the Quest for Quality section of our website, www.logisticsmgmt.com/quest.

Performance Attributes' Importance

Company Type	On-Time Performance	Value	Information Technology	Customer Service	Equipment & Operations
National/Multiregional LTL and Surface Package Carriers	4.4	3.8	2.0	3.1	1.8
Northeast/Mid-Atlantic Regional Carriers	4.5	3.7	1.9	3.0	1.9
Midwest/North Central Regional LTL Carriers	4.6	3.7	2.1	3.0	1.7
South/South Central Regional LTL Carriers	4.2	3.8	2.0	3.1	1.9
Western Regional LTL Carriers	4.5	3.9	1.8	3.1	1.7
Truckload, Van Lines, Expedited	4.3	3.6	1.9	3.0	2.1
Rail/Intermodal Service Providers	4.3	3.7	1.8	2.7	2.4
Ocean Carriers	4.3	3.5	2.0	2.9	2.3
Airlines and Air Express Carriers	4.5	3.8	2.2	2.7	1.8
Freight Forwarders	4.2	3.5	2.3	3.3	1.7
	Carrier Selection & Negotiation	Order Fulfillment	Transportation/Distribution	Inventory Management	Logistics Information Systems
Third-Party Logistics	3.3	3.4	3.2	2.6	2.5
Source: Logistics Management, Reed Research Group

Core Carrier Satisfaction Ratings

Mode	% Using Core Carriers	Overall Satisfaction Score*	Core Satisfaction Score
National LTL Carriers	52	33.91	37.05
Multiregional LTL Carriers	55	34.42	37.06
Surface Package Carriers	65	37.07	38.97
Northeast/Mid-Atlantic Regional LTL Carriers	58	36.04	39.59
South/South Central Regional LTL Carriers	57	35.99	38.59
Midwest/North Central Regional LTL Carriers	52	34.55	37.68
Western Regional LTL Carriers	43	35.43	38.55
Truckload—Bulk Motor Carriers	48	32.95	36.52
Truckload—Household-Goods & High-Value Goods Carriers	44	33.39	35.96
Truckload—Industrial/Heavy-Haul Carriers	46	31.97	33.87
Truckload—Dry-Freight Carriers	49	32.67	35.65
Truckload—Expedited Motor Carriers	66	35.89	38.34
Standard Rail Service	61	31.51	31.75
Intermodal Service Providers	52	31.91	31.88
Intermodal Marketing Companies	59	32.69	34.02
Ocean Carriers	63	33.04	35.80
Freight Forwarders	67	33.12	33.25
Air Express Carriers	68	36.02	38.30
Airlines	45	33.68	36.40
Average weighted score Source: Logistics Management, Reed Research Group*