Advancing the LTL Industry Through
Progressive Ideas and Commitment to Excellence
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The LTL industry has returned in size, though most carriers are
searching for new ways to acquire market share and operate more profitably
LTL Market Size and Average
Operating Ratio of Top 5 Carriers
Developments in the LTL Industry
§  Post-recession revenue has returned,
with small future growth anticipated
§  Regional and Super-Regional carriers
have experienced pricing pressure from
larger carriers that are now more equipped
to compete in local markets
$32,500
LTL Market Size (million USD)
§  Technology has changed larger carriers’
ability to price services to target ORs
104%
103%
102%
$30,000
100%
99%
98%
$27,500
98%
97%
$25,000
$22,500
95%
95%
96%
94%
$20,000
92%
$17,500
$15,000
Top 5 Largest Carrier Avg. Operating Ratio
§  Consolidation in the industry has
continued, concentrating over 73% of LTL
spend across the top 10 carriers
$35,000
90%
2007
2008
2009
2010
2011 2012 (E)
Sources: JOC, Stifel Nicolaus, Top 5 Largest Carrier Annual Reports, Internal Estimates
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As the economy has rebounded, evolving shipper needs have created
more opportunities for 3PLs to offer services for freight management
Regulatory
Compliance
Increasingly
Scrutinized
Operational
Efficiency and
Cost Reduction
Needs
Evolving Shipper Needs
Create Opportunities for
3PL Companies
Regional & Local
Market Expertise
Requirements
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Offshored
Manufacturing
and Outsourced
Service Increase
IT Capability &
Requirements
Advancements
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3PLs generally offer four different types of services that are often
blended across lines as the customers’ needs change over time
§  Long-term contracts with shippers
for warehousing or distribution
§  Carrier contracts for inbound
and outbound business
§  Management of shipments with
international origin or destinations
§  Takes full responsibility for freight
International
Freight Forwarder
Warehousing
and Distribution
§  Conducts invoice auditing
or negotiates on behalf of
shipper to reduce freight spend
§  Shorter-term contracts with customers
with payment for activities and savings
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Domestic
Freight Broker
Audit and
Negotiator
§  Movement of freight between
intra-North America points
§  Contract and non-contract
relationships with customers
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Each 3PL type has its role in the marketplace, with their own advantages
and disadvantages for carriers to work with to bring on new freight
Relationship and
Pricing with
Customers
Pros / Cons
of Model for
Carriers
Strategies to
Bring on
Profitable Freight
International
Freight Forwarder
Domestic
Freight Broker
Audit and
Negotiator
Warehousing
and Distribution
§ Long-term contracts
and transactional
§ Pays freight bills
§ Short-term contracts
and transactional
§ Pays freight bills
§ Short-term contracts
and transactional
§ Shipper pays bills
§ Long-term contracts
§ Shipper or 3PL may
pay freight bills
+ Direct access to
freight coming to US
-  Dimensional / class
pricing conflicts
-  Costs to meet port
and airport needs
+ Access to thousands
of smaller shippers
+ Immediate business
-  Can be difficult to
forecast asset needs
-  A lot of “bad guys”
+ Can help to improve
relationship with
carrier and shipper
-  Looks for lowest rate
and not conscious of
service quality
+ Secure long-term,
contracted business
+ Forecast asset needs
-  Deal size increases
scrutiny for freight
cost savings
§ Develop ability to
provide dimensional
and class pricing
§ Personal relationships
key for operations
§ Guidelines for CSP
opportunity proposals
§ Logic in blanket pricing
to get desired freight
§ C-Suite relationships
§ N/A
§ Develop best-in class
CSP procedures
§ Work hand-in-hand
with 3PLs to win
opportunities upfront
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Brokers are often under-utilized by regional
and super-regional carriers due to lack of
tactics to get profitable business from them
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Domestic freight brokers have become a larger part in the domestic freight
market, but carriers remain wary of their value-add to their network
Evolving Role of Freight Brokers
§  In reality freight brokers can be both, but
with the right strategy they can be an
extremely profitable sales channel for
carriers looking to increase density or grow
LTL Spend by Freight Brokers (million USD)
§  Carriers have ranging opinions of brokers,
some viewing them as a threat and
others as a supplemental sales force
7.6%
$3,000
6.5%
$2,500
7.0%
5.7%
$2,000
6.0%
4.8%
5.0%
$1,500
4.0%
2.7%
$1,000
8.0%
3.0%
1.8%
2.0%
$500
Percent of Total LTL Industry
§  Brokers have grown sharply over the
past 6 years as shippers have relied on
them to access new carriers with preferred
pricing and use their online TMS platforms
LTL Freight Moving Through Brokers
1.0%
$0
0.0%
2007
2008
2009
2010
2011
2012 (E)
Sources: Internal Estimates, Freight Broker Annual Reports
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With CarrierDirect’s proven strategies, carriers can tap into the growing
pool of freight moved by Brokers and fill their trucks with business they want
How We Help Our Carriers Grow Profitably
§  Immediate new business that matches
network needs by Class, weight, direction,
density or overall Operating Ratio (O/R)
§  Access to over $1.5B in LTL spend with
pre-qualified brokers for payment speed,
ethical behavior and C-Suite sponsorship
§  Pricing that reflects the carrier’s true cost,
not just the base rate preference of the broker
§  Technology strategies to reduce costs
for bringing on and handling new business
§  Zero upfront costs, only for new business
that is brought on and moved on their trucks
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With our relationships, strategies and
procedures our carriers and freight
brokers build long-term and
profitable relationships
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When working with new carriers, we follow a series of proven steps to
determine the company’s goals and bring on business into their network
How The Program Works for Carriers That Work With CarrierDirect
Step 1
Set carrier goals for
growth or improved
account profitability
Step 2
Develop pricing and
market strategies to
accomplish goals
Step 3
Pilot program with
select group of
Freight Brokers
Step 4
Make changes in
program as needed
to achieve goals
Step 5
Roll-out program to
additional waves of
qualified Brokers
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By working with CarrierDirect to shape its strategy, a carrier that had
struggled to grow profitably in the past completely transformed its business
CarrierDirect Program – Case Study #1
Overview of Our Work with the Carrier
§  Carrier had shown little signs of growth
and weak profitability for multiple years
§  After assessing state of the business,
CarrierDirect helped the carrier to:
-  Develop a custom base rate to
reflect its true cost to move shipments
-  Change its sales strategy to leverage
Freight Brokers for growth and limit
spend on its direct sales force
Results From CarrierDirect Program
Revenue Change (YoY)
Operating Ratio
é 165%
ê 6.5%
A/R Days
Outstanding
Revenue per
Shipment
ê 5 Days
é $27
§  In less than a year, the carrier radically
transformed its business, resulting in
record revenue and profitability
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For a carrier looking to supplement existing business, CarrierDirect
helped to fill backhaul lanes and build density across its network
CarrierDirect Program – Case Study #2
§  Carrier with large ATA network was looking for ways to
improve LTL business and grow revenue in that space
§  After analyzing its network, CarrierDirect pinpointed
areas to improve pricing and O/R for all Broker accounts
§  After months of new profitable business, the carrier utilized
CarrierDirect network to fill multiple backhaul lanes
Results From CarrierDirect Program
Improved Overall
3PL Program Pricing
Brought on New
Profitable Business
Improved
Asset Utilization
Supported New
Service Area Growth
Closed Gaps in
Broker Pricing
Program for All
Accounts
$400K per Month
of New Business in
Under 9 Months
Targeted Areas to
Provide Relief in
Backhaul Lanes
Immediate
Tonnage for 2
New Terminals
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For more information, visit us at www.carriedirect.co
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