A dynamic Holland, New Penn and Reddaway e-book.

I know how to make your supply chain more reliable and cost effective.

We know consolidation and distribution.

Contents

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4

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14

20

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The Dilemma: Situation overview

Inventory Management: Strategies often vary

Consolidation and Distribution: Adding efficiencies

The Business Case: Is it right for you?

The Right Provider: What to look for

Leaders in Next-Day and Beyond: Best-in-class

The Dilemma

Balancing transportation with other supply chain strategies doesn’t have to be a struggle. It’s common knowledge that shipping costs typically reflect the size of the shipment and the

distance the shipment travels. It makes sense, then, if you build larger shipments, which can

travel longer distances, you will lower your per-unit transportation costs.

The reality is that businesses often transport multiple small shipments in efforts to support inventory

management strategies, increase responsiveness to customer needs, fulfill e-commerce direct-to-

consumer transactions, etc. However, many shippers find that by working with their transportation

providers, they can develop consolidation and distribution solutions to add efficiencies and flexibility

by consolidating less-than-truckload (LTL) shipments to truckload shipments.

The following e-book provides an overview on the use of consolidation and distribution

solutions to help you determine if you can add efficiencies to your supply chain.

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Inventory Management

Inventory ties up significant capital for your organization, and its location can directly affect your service levels. Inventory management has moved beyond the questions of when to order, how much to

store and where to keep it.

The balance of cost vs. service varies depending on the overall inventory

management objectives, such as:

Improving service levels

Reducing costs

Increasing revenue

Increasing market share

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Inventory management practices vary depending on the corporation’s need to manage profitability or liquidity. The economy frequently drives this aspect:

Economic conditions lead many businesses to tightly manage their inventory levels. This frequently creates the need for either smaller shipments, which must move quickly,

or larger – but less frequent – shipments. These larger, less frequent shipments may require

consolidation and distribution to reach multiple destinations. Smaller shipments from

multiple vendors can be consolidated into full truckloads as a method to reduce cost and

improve respnsiveness.

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Increased inventory – When the economy is expanding, corporate profitability is frequently the priority. Inventory management strategies focus on total landed costs, which often mean inventory build-up.

Decreased inventory – When the economy is contracting or when uncertainty prevails, corporate liquidity is often the priority. Businesses tighten inventory levels to free up cash flow. As a consequence, responsiveness can be impacted.

Inventory Management

Inventory management practices may vary by product. Demand-driven: Is the inventory item independent or dependent of the manufacturing process?

Pull or push: Do customer orders drive inventory decisions, or is the item replenished on a set schedule?

Scope: Will inventory decisions for the product vary by facility or follow system-wide strategies?

Transportation strategies may also vary by product. Product characteristics: Value, size, special requirements, etc.

Network design: Location and number of your manufacturing facilities and warehouses

Customers: Number and location of delivery points, customer service requirements, market demand

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Inventory Management

Consolidation and Distribution

Transportation is the link between your inventory management practices and your customer.Consolidation and distribution solutions may let you add efficiencies and

responsiveness to your transportation activities by enabling larger shipments

to travel longer distances.

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Distribution = One to many In a distribution solution, goods departing from one origin are

delivered to many destinations within a geographic region.

For example, a truckload (or partial truckload) of multiple LTL

shipments moves from a manufacturing facility to a service center

where cargo is distributed via LTL service to multiple destinations.

Consolidation = Many to one Consolidation enables you to combine goods departing from

many origins within a geographic region and deliver all of them

to one destination. For example, LTL pickups from multiple

origins are consolidated into one truckload shipment moving to

one destination.

LTL

TL

TL

LTL

LTL

LTL LTL

LTLLTL

LTL

LTL LTL

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There are a number of ways to increase the efficiency of your supply chain. A consolidation and/or distribution solution can help you:

Find economies in your inbound transportation to more effectively plan resources needed for production schedules

Mitigate outbound transportation costs by optimizing cost-effective truckload services combined with smaller LTL shipments traveling shorter distances

Reduce expenses and inventory, avoiding costs associated with maintaining multiple warehouse locations

Reduce the likelihood of damage or shortage by lowering the number of times shipments are handled

Increase delivery flexibility by allowing products to flow directly where and when they are needed

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Consolidation and Distribution

Distribution versus other modes

Traditional LTL to Origin Hub

Truckload to Regional LTL Service Center

LTL Linehaul to Destination Hub LTL City Deliveries

LTL City Deliveries

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4

Customers

Cartage to Warehouse Private Fleet to DC Local Deliveries

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Less handling, lower cost and faster transit!

Cartage to Rail Yard Rail to DC Local Deliveries

2

Port of Entry or Manufacturing Facility

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Consolidation and Distribution

Cross-border deliverybetween U.S. and Canada

PA

NY

MS ALGA

NC

SC

VA

TN

KY

IL

WIMI

IN

OH

WV

AROK

KS

ON QC

NE

SD

MN

IA

MOCA

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Multiple vendors use

Holland for outbound

service; shipments are

consolidated and truckload

built at provider’s in-home

service center

Truckload provider transports

shipment to customer in

Nuevo Laredo, Mexico

Consolidation and Distribution

Consolidation example

Cross-border deliverybetween U.S. and Canada

PA

NY

VTNH

ME

MACT RI

NJ

DE

GA

MD

PQ

ON

PR

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New Penn converts the

truckload into multiple

LTL shipments delivered

next-day to customers in

the Northeast

Container arrives in the

Port of Los Angeles, CA, and

is loaded onto a truckload

where a sleeper team runs it

to Harrisburg, PA

Consolidation and Distribution

Distribution example

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Reddaway converts the

truckload into multiple

LTL shipments which are

delivered next-day to

customers in the West

Shipments are consolidated in

a truckload and then shipped

via sleeper team to strategic

distribution points in the

Reddaway networkAZ

CA

OR

WA

IDMT

BC

WY

UTCO

NV

Consolidation and Distribution

Distribution example

The Business Case

Have multiple inbound suppliers/vendors or outbound customers within a regional area

Have sufficient volume moving to or from a region (for consolidation services, the preference is one full truckload of multiple LTL shipments per week)

Currently use multiple linehaul LTL service providers

Utilize a private fleet to transport your products and want to eliminate multiple-stop deliveries

Want to reduce order cycle time and get your products to your customers 1-to-3 days sooner

Want to reduce inventory and overall costs and better manage your supply chain

Want to avoid inventory buildups and bypass costly distribution centers or warehouses

Seek to avoid costly truckload stop-off charges and delays

Need to remove product from the marketplace (reverse logistics)

Does a consolidation and/or distribution solution make sense for your business?

If one or more of these apply, it might make sense to explore consolidation

and/or distribution service solutions:

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Retailers – Consolidate inbound shipments into trailer loads destined for a specific distribution center

Importers – Unload containers of goods portside at inland pool distribution points for transporting LTL shipments

Inter-regional shippers – Build large loads requiring long cross-country transportation which are then split into multiple smaller regional shipments

3PLs – Access assets that support distribution optimization and/or transportation management strategies

Dedicated/private fleet operators and truckload service providers – Drop shipments at a service center for regional or local delivery

Customers who frequently implement consolidation and/or distribution solutions include:

The Business Case

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Consider your operations in terms of origin and destination locations, shipping volumes,

service requirements, seasonality issues and whether you have opportunities to work

cooperatively with other business units within your company. This can help identify

opportunities and develop actionable, effective plans.

As you do your planning, think about the size of the trailers and the amount of your product they

hold, either in terms of weight or cubic feet. Then think through your pallet configuration. This will

help you optimize trailer space and equipment usage.

Look at your orders. Can you combine orders to make larger shipments? Are there delivery date

windows to meet? By optimizing your orders, you can develop shipping patterns by destination.

Considerations when implementing a consolidation and distribution solution. Before you can implement a consolidation and/or distribution solution,

you first need to:

Analyze your supply chain

Implement careful planning

Remember that you are looking for overall efficiencies, not necessarily savings on a single shipment or lane

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The Business Case

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The Business Case

Finding efficiency in shipment consolidation.Challenge: A designer and manufacturer of office furniture was operating in a just-in-time

environment with a 5-to-10-day delivery promise. The company moved weekly shipments from

a southern California distribution center to customers east of the Mississippi. Transporting

multiple small shipments was costly, inefficient and tough to manage.

Solution: Holland provided the ideal solution with LTL distribution service. The company realized

greater economy when their customer orders, previously routed as LTL shipments, were combined

with already moving inter-facility truckload shipments destined to their Iowa manufacturing facility.

The individual customer orders were first unloaded at the Holland Rock Island service center and

distributed to multiple destinations. This simplified service added value with:

Convenience of a single truckload delivery point

Extensive next-day delivery capabilities

Reducing order cycle times

Eliminating of sort center delays

Reducing of inventory storage costs

Less handling for reducing breakage

Customer satisfaction: The customer noted, “Most locations for Holland are next-day

deliveries, and that aligns well with our customer promise for rapid delivery.”

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The Business Case

Regional distribution reaches national customer base.Challenge: A designer, manufacturer and distributor of innovative filtration products needed to

adjust its primary delivery model to accommodate its retail distribution growth. As LTL usage grew,

reflecting an expanding client base, more efficiency and cost-savings were needed. The company

provides service to automotive, agricultural and industrial clients throughout the United States

requiring wide-reaching freight distribution channels. However until it began shipping directly to retail

stores from its North Carolina headquarters, shipping LTL was not a large part of its business.

Solution: Holland, Reddaway and New Penn partnered with the company to create a

seamless efficient regional distribution solution. Already shipping with Holland, the company

looked to Reddaway for the same quality and value heading west. They shipped truckload to

distribution points in Colorado, Utah, Oregon, Washington, Idaho, Montana and California.

Reddaway then sorted and distributed LTL shipments for next-day delivery to retail customers

within its extensive service area. The company also began using New Penn for east-coast

regional transportation with multiple distribution points in New York and Connecticut.

Customer satisfaction: A representative from the company reports, “Our customers

absolutely love the distribution service because Reddaway, Holland and New Penn provide us

with the transportation services we need to give our clients the on-time service they expect

with far fewer exceptions.” The manufacturer regularly invites customers to its headquarters

to demonstrate how the pool distribution process works so well.

Visibility is key to customer satisfaction.Challenge: A leading global manufacturer of drive-train mobility and braking solutions needed

a logistics partner who could reduce delivery time and cost, plus include freight movement

tracking. The company’s Cincinnati-based manufacturing plant distributed seven loads per

week to Orange, California, supplying their customers in the western states. However, their

selected carrier was unable to provide visibility for shipments in transit. Customer complaints

concerning an inability to meet stringent delivery times and track urgently needed parts led the

manufacturer to search for a superior value solutions supplier.

Solution: The extensive Reddaway next-day delivery area fit the bill. Reddaway was able to

ship LTL directly out of Orange to the company’s customers in the West, including locations in

Utah, Idaho, Nevada, Oregon, Washington and Montana. The Reddaway solution offered the

component manufacturer on-time reliability and greater assurance that disabled vehicles

would be quickly repaired and back on the road.

Reddaway proved to be a valuable partner with comprehensive western U.S. next-day

coverage, faster transit times, distribution visibility and fewer delivery exceptions

and claims due to reduced handling.

Customer satisfaction: Reddaway was able to reduce the company’s delivery time by as

much as a day, and its accurate, up-to-date systems provided the tracking capabilities its

customers wanted.

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The Business Case

The Right Provider

While your transportation service provider should be able to help you identify and think through issues and alternatives, many cannot.When looking for a provider, look for a partner with:

Experienced service professionals with expertise in heavy-weight shipments and supply chain solutions

A transportation network with locations where you do business

Flexible solutions that can fit your needs

Extensive next-day delivery capabilities

Extensive cross-dock space to handle shipments

Technology to facilitate your processes and deliver shipment status visibility

Proven reliability

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Leaders in Next-Day and Beyond

Best-in-class carriers Holland, New Penn and Reddaway can help your supply chain and bottom line.Our service centers are located in major markets that support distribution center by-pass

strategies for reductions in warehouse locations and inventory.

Cross-docking solutions customized to meet your exact requirements allow product to flow

directly where it’s needed. This enables you to quickly respond to changing market conditions

or customer needs.

The convenience of a single point of contact brings:

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Experience

Transportation engineers

Efficient online technology tools

Reliability

Working with the best-in-class carriers of Holland, New Penn and Reddaway, you’ll have access to a network of service centers located across North America. In most cases, these facilities are situated within a one-day reach of where you do business.

Leaders in Next-Day and Beyond

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Holland Service Center

New Penn Service Center

Reddaway Service Center

Creating a supply chain solution that delivers strong bottom-line benefits requires:

Holland offers services throughout the Central and Midwestern United States and Eastern Canada.

Holland makes claim-free deliveries a top priority. Its on-time performance has long been considered an

industry standard. 1-866-465-5263 | hollandregional.com

New Penn provides superior regional, next-day ground services through a network spanning the

northeastern United States, Quebec, Canada and Puerto Rico. New Penn is considered an industry-leader

in tracking technologies and Internet-based shipping services. 1-800-285-5000 | newpenn.com

Reddaway operates a network across the western United States and Canada that provides guaranteed

delivery of time-sensitive shipments, user-friendly Internet-based transportation management system,

and streamlined Customs procedures. 1-888-420-8960 | reddawayregional.com

Careful planning and tight coordination

The right pattern of volumes and destinations

A transportation partner who can engineer a solution to meet your needs

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Leaders in Next-Day and Beyond

Contact your account representative to get started today.Consolidation and distribution services are available from the operating companies of Holland, New Penn and Reddaway.

©Copyright 2013 YRC Worldwide Inc. HNR-0102 5/13

1-888-420-8960 reddawayregional.com

1-866-465-5263 hollandregional.com

1-800-285-5000 newpenn.com