Paul Schutz, Managing Director

LPP Introduction – (Company Name)(Date)

04/08/20232

Agenda

• LPP Introduction

• LPP Services Overview

• Parcel Contract Negotiations

Parcel Shipping Overview

Primary Objectives/LPP Approach

Methodology

• Key Deliverables/Timing

• Data Requirements

• Additional Considerations

• OPTICS Demonstration

• Wrap-Up/Q&A

04/08/20233

LPP Introduction

• Industry Expertise

20+ years of supply chain operations experience

Proven P&L, consulting and operations success

• Process Expertise

“You can’t fix what you can’t see” Leverage expertise each stage of ‘The

Decision Cycle’

• Technology Expertise

Advanced data manipulation and performance analysis technology

Web-based business intelligence framework

See

Understand

DecideAct

Measure

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Proven logistics cost management services, including carrier and 3PL support

Carrier/3PL audit/payment services

Contract Negotiation services

Supply Chain data quality management

Consultative services to identify logistics opportunities and implement sustainable results

Fulfillment Network Strategy

Order/Carton Optimization

Parcel Zone-skipping

True continuous improvement and profitability analysis via OPTICS – our cloud-based BI platform configured uniquely for operations environments

Multi-source data integration

Cloud-based analytics

KPI monitoring and reporting

LPP Services Overview

04/08/20235

OPTICS enables Performance Strategy success at all framework levels

LPP Services Overview

Item-level data integration; multi-channel specific and customized logic/algorithms

Cloud-based analytics and consulting support

Performance Strategy Framework LPP OPTICS Service

Actionable Information/

Universal Access

Continuous Improvement

Profitable Growth & Service Value

Organizational Alignment

Report & Monitor

KPI

04/08/20236

G

U

LargerZone Bands

SmallerZone Bands

F

Parcel Contract Negotiations: Parcel Shipping Overview

Note: ‘reach’ of ground network is directly linked to the geographic location of the air hubs (minimize air volume actually flown).

Key Parcel Locations

UPS Primary Air Hub – Louisville, KY

FedEx Primary Air Hub – Memphis, TN

UPS Primary Ground Hub – Chicago, IL CACH

Optimal Area – Single US Distribution Point

G

U

F

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Key pricing factors:

• Volume (V): total packages shipped• Package Density (PD): weight per cubic foot of carton capacity• Delivery Density (DD): number of packages per shipment (unique origin to unique destination)

Cost Structure:

• Comprised of distinct operating elements:

Pick-up cost:10-20% of total cost (Key Factors: V, PD; also # of p/u locations) Line-haul cost: 20-60% of total cost (Key Factors: PD, V) Delivery cost: 20-40% of total cost (Key Factors: DD, V)

Key discounting factors:

• Volume: Important early; drives relevance within UPS in the form of ‘revenue’ Less important as you approach high volumes - reach ‘discount’ (profitability) ceiling

• Package Density: Somewhat important early, but rises in importance as volumes grow Drives highest cost segment: Line-haul; Key ‘Package Density’ threshold is 9.8 pounds/cubic foot

• Delivery Density: Moderately important at all volume levels Reduced delivery expense; increases profitability of accessorials/adjustments

Parcel Contract Negotiations: Parcel Shipping Overview

04/08/20238

Shipment Profitability

• Minimum charges can dramatically impact true/net discount or zone rate differences

• General speaking, carrier profitability increases ‘top left’ to ‘bottom right’ of rate chart

Zone

Rate

2 8 Zone

Rate

2 8

X

Zone

Wei

ght

$

$$$$

Non-linear Operating Ratio (OR)

• Carrier fees are not ‘linear’ relative to weight and zone• Increasing cost of line-haul drives greater relative increases at higher zones

Parcel Contract Negotiations: Parcel Shipping Overview

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Primary Objective:

• Provide maximum negotiation leverage through:

Detailed understanding of carrier objectives and negotiation approach Thorough analysis of current client volumes and future business needs Consideration for a positive post-negotiation shipper-carrier relationship

LPP Approach:

• Client maintains all direct carrier dialogue/negotiations

• LPP supports each of the following key components:

Negotiation strategy development, including ‘Key Terms’ sheet Overall project management Historical analysis and reporting requirements Cost/Benefit models (projected and final terms) Post-agreement impact monitoring (via OPTICS service if requested)

Parcel Contract Negotiations

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I. Key Deliverables/Timing (Calendar Weeks)

Initial Data Assimilation (Weeks 1-2) Shipping History Analysis (Weeks 3-6) Cost-Benefit and Operational Forecast Modeling (Weeks 6-8) Negotiation Strategy Workshop (Week 9) Negotiation Status Updates (TBD; typically 8-16 weeks) Final Negotiation Assessment (Upon agreed-upon contract)

II. Data Requirements

2 years of transactional data; prefer actual carrier invoice detail Relevant support data: order detail, sales forecasts, current/projected item profiles,

carton/packaging data, vendor/customer profiles Existing contract information

III. Additional Considerations

Single or multi-carrier negotiation? Impact of timing: can we get savings sooner if we negotiation sooner? Length of contract: what works best for client? For carrier?

Parcel Contract Negotiations: Methodology

04/08/202311

1. UPS “Base” Sample:

Constructed directly from UPS e-package transmissions Consolidated to package-level Customized components include:

• Origin Type/Name cleansing/coding• Accessorial cost visibility• Destination geo-coding

2. E-commerce ‘Order Performance’ Sample:

Existing LPP e-commerce client with full-scale “Order Performance” solution Complete integration of sales, promotion and shipping activity Category/Item-level product, shipping and total margin visibility

3. Benefits:

Shared visibility to key performance metrics and trends Opportunity identification: cost savings, service improvements, etc. Vendor compliance and project/implementation performance monitoring Improved negotiations leverage; understand cost drivers as well as the carrier does LPP consultative support:

• Multi-channel/e-commerce logistics operations experts• Virtual “performance analysis team”• Optional gain-shared based opportunity identification and implementation support

OPTICS Demonstration

Beyond transactions, we help drive your business

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Parcel Negotiation Summary

• Parcel shipping requires specific/unique expertise vs. other modes• It’s a large spend – on both a ‘net’ and ‘rate’ basis - that directly impacts the bottom-line• Negotiation Imperative: Know as much – or more – than the other party• Understand the carriers’ key financial/operational motivations• Make sure you’re left with a positive working relationship – you’ll need your carriers’

partnerships to drive continuous improvements that impact both the top and bottom line

So “Why LPP?”

• We have the talent, tools and experience to drive carrier contract negotiations• We specialize in small-pick, high-volume parcel shipping business environments• We’re not a transaction processing company… we’re a true ‘continuous improvement partner’

Thank you!

Wrap-Up/Q&A

04/08/202313