Canadian Shipper

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Shipper’s Choice Awards


Rising to the challenge

Our fourth annual Shipper’s Choice Awards survey sets industry benchmarks for performance excellence and identifies the 44 carriers that exceed them

Not in recent memory has transportation been so complex and so costly. Acute capacity shortages in some industries and lanes, consolidation in the marine and trucking sectors, and rising rates and ancillary charges pretty well across the board are forcing buyers of transportation services to closely evaluate their existing relationships with transportation providers. For the past four years our ground-breaking Shipper’s Choice Awards Survey has attempted to provide scientifically derived benchmarks of excellence for carrier performance in each mode and to identify the carriers exceeding those benchmarks. Despite the challenges,44 carriers were able to exceed the benchmark of excellence this year, and thus earn the right to count themselves among the best of the best, as winners of the 2005 Shipper’s Choice Awards.

The survey offers Canadian shippers, 3PL service providers and freight forwarders an opportunity to set benchmarks for carrier performance on seven key performance indicators (KPIs) and to rate their top carriers against those benchmarks. Because survey participants are first asked to rate the importance they place on each of the seven KPIs and that data is used as a weight on their carrier evaluations, the benchmarks set are truly standards of excellence. Of the hundreds of carriers rated, only a very few were deemed by participants’ evaluations as providing a service so superior that it warranted a Shipper’s Choice Award.

The more than 1,400 shippers involved in the survey represents a new record for participation as does the more than 6,000 carrier evaluations they cast across all modes. Survey participants represent every region across Canada (see table at left) and buy transportation services for companies with annual sales ranging from less than $5 million up to more than $2 billion. Their annual supply chain budgets range from less than $100,000 up to more than $25 million. Almost a third spend more than 70% of their supply chain budgets on transportation (see tables at the end of this report for those figures.)

The Shipper’s Choice Awards Survey was undertaken once again in partnership with CITT and the Canadian Industrial Transportation Association (CITA), two associations whose members responsible for the purchase of transportation number in the thousands. And, as in previous years, the research was conducted by independent research firm G. Bramm and Associates (the same research firm that conducts our industry-leading Annual Survey of the Logistics Professional and the Annual Survey of Canadian Third-Party Logistics). Invitations were sent to more than 6,000 of our readers who are buyers of transportation services in the manufacturing, retail and other sectors as well as to individuals responsible for managing shipments within the freight forwarding and 3PL sectors.

Aside from identifying the best carriers across all modes,survey respondents also provide clear indications of the different values Canadian buyers of transportation services place on each key performance indicator (KPI) based on mode as well as a comparison of how high these standards are set for each mode. (For example, transportation buyers set their highest standard on information technology for couriers while expecting ocean carriers to live up to the highest standard for competitive pricing — see table on the previous page.)

The importance survey participants place on the KPIs for each mode (based on a five-point scale) is used as a weight in calculating carrier evaluations. This ensures that carriers receive the highest marks for performance in the areas deemed most important to transportation buyers for that mode. Survey participants rate up to three of their main carriers in each mode (again on a five-point scale.) The final weighted score for each carrier is derived by multiplying the carrier’s average performance score by the average importance rating for each key performance indicator for that mode.

Carriers receive the Shipper’s Choice Award when their total score meets or surpasses the total benchmark of excellence for their mode. Only those carriers who exceed this benchmark have their names and scores included in the following tables.

Average shipper satisfaction ratings for each KPI are shown in the table below by mode. The final column on the right shows the total benchmark of excellence set for each mode.The benchmarks for each of the seven KPIs per mode are indicated with each modal table on the following pages.

It should also be noted that carriers must receive a minimum number of evaluations in order to qualify. Winning carriers are listed alphabetically, and not by their total score. Those wanting to compare the scores among the winners should keep in mind the high probability that these carriers, although they are being compared to an industry benchmark, have been evaluated by different shippers. This survey is intended as a measure of which carriers exceed industry expectations and not a ranking of the carriers involved.

We hope our survey will help make the carrier selection process a more informed one and we would like to extend our sincere thanks to all the survey participants who make this ground-breaking survey possible every year. Survey participants receive an advanced electronic copy of the survey highlights.

Road warriors

Buyers of truck transportation cast more than 3,500 evaluations of LTL and TL service providers, the most for any of the modal categories and a new record for our four-year survey.More than half are spending over a million dollars annually on truck transportation. (see chart on following page).

Pricing and capacity have been key issues in truck transportation this year and last. After years of marginal rates increases, the largest carriers have been particularly aggressive in their attempts to push through the kinds of rate increases they consider necessary to reflect their costs and quality of service. Many have also introduced accessorial charges.

Yet competitive pricing is the second most important criteria for shippers when choosing TL transport and the third most important when choosing LTL transport among the seven key performance indicators tracked by our survey. At the same time, increasing use of intermodal options, stricter border legislation and the continuing driver shortage have greatly raised the complexity of truck transportation. Combined these forces may account for the disappearance of some of the nation’s largest carriers from the list of trucking companies surpassing the benchmark of excellence this year. In all 15 LTL carriers surpassed the benchmark of excellence, one less than the previous year. Of those, eleven were repeat winners. Manitoulin Transport, a previous winner, earned an honorable mention (HM) this year for scoring less than a point from the benchmark of excellence.

The winners and their scores for each of the seven KPIs are shown in the table below. The bottom row of the table shows this mode’s benchmark of excellence for each KPI. The total benchmark of excellence for this mode is shown top right.

The winners are shown in alphabetical order and only those scoring above the total benchmark of excellence are included.

Meeting the benchmark of excellence set by transportation buyers is particularly challenging for providers of truckload services. Transportation service buyers set the benchmark for TL carriers higher this year. In fact, the benchmark of excellence for this sector of the trucking industry is the second highest in our survey after air transport.

As in previous years, transportation service buyers expect the most from TL carriers when it comes to on-time performance, followed by competitive pricing and customer service.

This year 10 TL carriers made the mark, the same amount as last year, although
there were several changes within that list. This group of elite carriers includes 7 repeat winners – Day & Ross, Kriska Transportation, Penner International, Robert Transport, Midland Transport, MacKinnon Transport, and MSM Transportation. New entrants include XTL Transport, which narrowly missed the mark last year, SGT 2000, and TransX. Laidlaw earned honorable mention for coming less than a point (actually less than a hundredth of a decimal point) of the benchmark.

The winners and their scores for each of the seven KPIs are shown in the table below. The last row of the table shows this mode’s benchmark of excellence for each KPI. The total benchmark of excellence for this mode is shown top right.

The winners are shown in alphabetical order and only those scoring above the total benchmark of excellence are included.

Crest of satisfaction

More than 400 shippers, 3PL service providers and freight forwarders participated in the ocean carrier category, casting a total of almost 500 carrier evaluations, both new records for the survey.

Ocean carriers are responsible for transporting more than 300 million tonnes of Canadian-linked freight per year and have been battling successive years of high industry costs, capacity issues due largely in part to the demand for containers for the Asian trade and bottlenecks in the west coast ports, and industry consolidation. Many carriers have concentrated on improving their financial performance by raising their rates (our research found 56% of shippers were paying rates higher than 4% from the previous year). This has posed a challenge for a mode where transportation buyers place great value on competitive pricing – in fact the standard for competitive pricing is set higher for ocean carriers than any other mode, a continuing trend revealed by our research.

Only four ocean carriers provided a service above the benchmark of excellence this year’s survey con cluded, the same number as last year. Two are repeat winners: ACL Canada and OOCL. New to this exclusive club of marine transport is K Line while P & O Nedlloyd returns to the fold after an absence last year.

The winners and their scores for each of the seven KPIs are shown in the table below. The last row of the table shows this mode’s benchmark of excellence for each KPI. The total benchmark of excellence is shown top right.

The winners are shown in alphabetical order and only those scoring above the total benchmark of excellence are included.

Quick to please

Almost 700 survey participants provided more than 1,700 carrier evaluations for the courier category. Fourteen per cent of respondents are spending over $1 million annually in courier transportation. Nine companies surpassed the benchmark this year, same as the previous year. There were three repeat winners. Purolator was awarded honorable mention for coming less than a point short of the benchmark of excellence. The winners are shown in alphabetical order .

Annual expenditures on courier transportation

Soaring highest

Air carriers rebounded this year with stronger volumes and improving profit margins thanks in part to higher rates. Along with improved financial performance have come stiffer competition and higher shipper expectations. More than 500 buyers of transportation services participated in this segment of the survey, casting 363 carrier evaluations. This year five carriers scored above the benchmark. The winners and their scores for each of the seven KPIs are shown in the table below. The winners are shown in alphabetical order and only those scoring above the total benchmark of excellence are included.

Rail realities

Intermodal terminal blockages and strikes have dogged rail carriers the past two years amidst a surge in demand for their services. Shipper expectations for rail performance were reduced again this year, likely reflecting the frustration many shippers are feeling. Almost 400 buyers of rail services set benchmarks and evaluated the performances of their providers, which move more than 80 million tonnes of freight annually. Fifty per cent are spending over one million annually on rail transportation. They are particularly interested in competitive pricing.but on-time performance and quality of equipment and operations follow close behind in their list of priorities.

No rail carriers scored above the benchmark of excellence this year, the fist time this has happened in the survey’s four- year history. Canadian Pacific Railway, a previous winner, however, scored close enough to the benchmark, missing it by a tenth of a decimal point, to be awarded an honorable mention. (Class 1 railways only were included in the survey.)

Respondent Profile

The responses from a total of 1,422 buyers of transportation services from across Canada are included in this survey. They are employed by a diverse range of companies in terms of size and spending on transportation. Almost a third spend more than 70% of their supply chain budget on transportation.


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