Quest for Quality Winners: Logistics providers at the top of their game

Which carriers and third parties provide world-class service? For the 23rd year, our readers name their top picks.

By Staff -- Logistics Management, 8/1/2006

While billions of fans around the globe enjoyed this year’s World Cup soccer tournament, they knew that only one team would hoist the golden trophy following the final match. Not so with our Quest for Quality Awards. This year, 110 providers of logistics and transportation services are stepping up to the winners podium after scoring the most points for service excellence over the last year of play.

For the past 23 years, Logistics Management’s Quest for Quality has been regarded in the transportation and logistics industry as one of the most important measures of customer satisfaction and performance excellence. To determine the “Best of the Best,” LM readers rate carriers and third-party logistics companies on the basis of their service quality. Considering the mounting operational pressures and constraints carriers and providers are currently facing, walking away with Quest for Quality gold in 2006 is nothing short of a momentous achievement. If a carrier or a 3PL made the list in 2006 you can rest assured that they’ve got what it takes to meet your needs.

Readers evaluate companies in all modes, choosing the top performers in each of the categories for motor carriers, railroad and intermodal services, ocean carriers, airlines and air express carriers, freight forwarders, and third-party/contract logistics service providers.

This past spring, LM and Reed Research Group (a division of LM’s parent company) surveyed readers who are qualified buyers of logistics and transportation services. This year we received 6,098 responses—a new record.

Qualified readers were contacted by e-mail and asked to complete and return an e-mailed ballot. As is our standard practice, a minimum of 200 valid, completed evaluations was used to determine the winners in each category.

For the World Cup, a team’s win-lose record and the number of goals it scored in qualifying matches are the metrics that define its strength going into the tournament—the stronger the statistics, the easier that team’s first opponent. To identify the best in the logistics game, LM uses a different set of metrics.

Transportation service providers are rated on 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 highest value on On-time Performance—and they’ve done so again this year. If you look at Figure 1, you’ll see that on-time performance was rated at 4.4 or higher in every major category this year. The second most important attribute, as has typically been the case in past years, was Value. Next in importance was Customer Service. Readers also continue to place the next-highest emphasis on Information Technology. However, there are a few exceptions, such as in rail/intermodal and truckload transportation, where users hold the quality and availability of Equipment & Operations in high regard.

After readers have ranked these key attributes in order of importance, they grade the providers 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 multiplies the providers’ average scores for each attribute by the attribute’s ranking.

Next, the weighted scores calculated for all five attributes for a given vendor are added together to create an aggregate number. Companies score a quality “goal” when their total scores exceed the average total weighted score in their category. However, providers have to receive a minimum number of reader responses—at least 5 percent of the total base for the category—to qualify for an award.

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 2006, we asked readers whether they have formed core-carrier relationships.

This year we found that shippers formed the highest percentage of core-carrier partnerships with ocean carriers. A remarkable 100 percent of respondents who buy ocean shipping services said they form core-carrier relationships with their providers. Air express carriers followed right behind, though, with 98 percent. In third place were national less-than-truckload (LTL) carriers, with 81 percent (see Figure 2).

Next, we asked those respondents to appraise their core-carrier relationships, with the goal of gauging whether shippers experience higher levels of satisfaction in this type of partnership arrangement than they do with non-core carriers. Over the years, respondents have nearly always given higher quality ratings to their core carriers than to their non-core carriers—and this year was no exception. In every category, we found that the core-carrier satisfaction scores were higher than the overall satisfaction scores.

However, we did find a few surprising developments. The survey found that overall satisfaction scores declined compared to 2005 findings in every category, with the exception of Truckload–Industrial/Heavy-haul. Core-carrier satisfaction scores, meanwhile, were down in 10 of the 17 categories compared to 2005. This may reflect the increasingly difficult logistics and transportation operating environment that continues to challenge even the very best of the service providers.

This year, expedited truckload carriers earned the highest overall satisfaction ratings, with a 34.81 composite score. Straggling behind the group were rail/intermodal service providers, with a composite of 29.11—their third year in the bottom position.

When it came to core satisfaction scores, the undisputed front runners were the Northeast/Mid-Atlantic regional LTL carriers, who tallied an impressive 39.14 composite score—the category’s second consecutive year winning what could be considered the highest quality honor.

Editor’s note: The editorial staff of Logistics Management would like to thank the record number of readers who took time out of their busy days to complete and submit the 2006 Quest for Quality ballots. Your time, effort, and insight helped LM maintain the Quest for Quality as the premier benchmark study for logistics and transportation quality and service.

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 October 18 in San Antonio, Texas. 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 2006 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. We are offering six reports: LTL, truckload, rail/intermodal, airfreight, ocean, and third-party logistics. Reports may be purchased on an individual basis or as a complete set. For more information or to obtain an order form, go to the Quest for Quality section of our website.