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POTENTIAL RE-ENGINEERING TECHNIQUES SRM Logistics, Inc (Stephen R McCleary, Pres) ©2012 1  The cost ($) of freight is generally between 4% to 8% ofThe cost ($) of freight is generally between 4% to 8% of a companies Gross Sales  Freight ($) is 5.5%* of Gross Domestic Product (GDP) in the Unitedin the United StatesStates  With the largest mode being truckload {2010 - $520Bn**}  Either:  Parcel ((Ground))  Less-than-Truckload (LTL)  Truckload  Commercial Carriers  Private FleetsPrivate Fleets  Dedicated-Contract Carrier Services  Inter-modal  TOFC –Trailer on Flatcar  COFCCOFC –Container on FlatcarContainer on Flatcar *Source: APICS Module 3, Managing Customer Supplier Relations ,pg 74 **Source: DC Vellocity, Marchh 2011, pg 51 SRM Logistics, Inc (Stephen R McCleary, Pres) ©2012 2  RRemoved $36MM fd $36MM from $270MM i $270MM in f freiightht cost ts through:  Reenggineeringg  Stronger Tariffs  Better Contract Negotiations  Focused Routing GuidesFocused Routing Guides SALES TRAFFIC SPEND POTENTIAL SAVINGS (4% to 8% of Sales) (13% of Traffic Spend) $ 50MM $ 2MM to $ 4MM $260K to $520K $ 75MM $ 3MM to $ 6MM $390K to $780K $100MM$100MM $ 4MM t$ 4MM to $ 8MM $ 8MM $520K t$520K to $1 $1.1MM1MM $250MM $10MM to $20MM $1.3MM to $2.6MM $500MM$500MM $20MM to $40MM$20MM to $40MM $2.6MM to $5.2MM$2.6MM to $5.2MM SRM Logistics, Inc (Stephen R McCleary, Pres) ©