Speakers and Agenda

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• Joe Andraski & Tony Galli (VICS): • Implementer of a freight load-empty truck matching program

• The Empty Miles Problem• Empty Miles Service Evolution

• VICS & GS1• The Sustainability Movement

• “Green” Goals & Differentiation• Steve Matheys (Schneider National):

• An overview of the Macy’s / Schneider Case Study• A Retailer’s and Carrier’s view of the program’s benefits

• Questions and Answers

The Empty Miles Problem• Cost of fuel and truck operations are escalating and contributing to

increased supply chain cost and inefficiency.• Empty trucks consume time and fuel on return legs of freight lanes.• 28% of miles are empty per NPTC (National Private Truck Council).• Companies pay a freight premium to cover returning empty trucks.

• Limited existing technology to identify opportunities for Back Hauling also coupled with collaborative business processes to match the shipper and potential carrier companies.

• We are in the middle of tough economic times.

• Focus on the environment and sustainability is increasing.

• Emissions Reduction is a key plank in most companies’ strategies.

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VICS members represent both small and large firms that collectively generate a sales volume of $2.3 trillion annually.These firms have grown through pioneering VICS' business processes and standards that increased sales, eliminated inefficiency, and got them closer to their customers.

VICS’ mission is to take a global leadership role in the development of business guidelines & specifications; facilitating implementation through education and measurement. Benefits can be measured in the improvement in retail supply chain efficiency and effectiveness, increased sales, service levels meet or exceed customer and consumer expectations.

VICS’ overall global objective is to improve trading partner relationships in the extended retail supply chain, resulting in improved product availability to the consumer. When properly implemented, VICS guidelines, practices and specifications lead to better anticipation of and reaction to changes in consumer demand, resulting in improved sales, profits and the use of fixed and working capital.

GS1 US & Canada are neutral, not-for-profit organizations that promote and maintain global standards for the identification of goods, locations and related e-commerce communication, and provides education and awareness of these global standards.

DON’T WAIT TO BE GREAT… COLLABORATE! TM

About VICSAbout VICS

About GS1 US About GS1 US and GS1 Canadaand GS1 Canada

Empty Miles Service EvolutionRoots in Three Not-for-Profit Organizations

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• Low cost collaborative solution to provide visibility to Shippers and Carriers by identifying potential opportunities to reduce empty backhaul capacity.

• A web based Service to match carrier availability (empty miles) with transportation demand (loads) delivered through a members only internet portal.

• A toolset comprised of collaborative processes, cost and emissions savings Benefits calculator, negotiating checklists, legal agreement templates, and standard data definitions to use the service.

• An information exchange capability for Empty Miles subscribers delivered through the portal powered by GS1 NA.

The Solution… VICS Empty Miles

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Empty Miles Service Evolution Progress to Date

• 2007 Q3 VICS approached GS1 CA with concept

Q4 GS1 CA took project approach: proof-of-concept, build prototype

• 2008 Q1 Industry focus groups : understand issues, refine concept

Q2 Develop proof-of-concept (HTML)

Q3 Develop prototype solution

Q4 Pilot with Industry focus group

• 2009 Q1 Implementation

Q3 Outreach/Process/Technical Enhancements – Mass Import/Export

• 2010 Q1 Wave 2 - Technical Enhancements – Visibility (e.g. Watch Lists)

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• #3 Ranked Private Fleet operator is working with suppliers to reduce the amount of packaging they use

• More goods in the same truck space = fewer shipments and lower fuel usage• Sustainability Milestone Meeting – 7/16/09 – Announced Sustainable Product Index

• Kraft Foods is testing technology to reduce fuel consumption, including replacing 25% of their tractors with cleaner burning engines and auxiliary power units (APU’s).

Measure & improve transportation usage Reduce traffic congestion Reduce CO2 emissions Increase mass transit usage Reduce energy usage Improve environment

Intelligent Transportation Systems

Intelligent Utility Networks

Measure & improve energy mgmt

CarbonManagement SolutionsMeasure & reduce carbon

emissions Strategy Customer and product Supply chain People IT strategy Property and buildings Information Recycling Waste management End of life services

Advanced Water Management

Measure & improve water mgmt Flood avoidance Weather event management Improved water quality Reduced water usage

Create &manage efficient IT IT facilities infrastructure efficiency IT operations efficiency Active energy management Monitoring and verification

of efficiency goals Demand-side efficiency

Energy EfficientTechnologies and Services

This slide is an illustration of the major environmental areas in which IBM is investing.

IBM Energy and the Environment Blueprint

• Creates opportunities for quantifiable reductions in carbon emissions you can take to your stakeholders.

• Six Points of Why VICS Empty Miles is Different: 1. Foundation for Sustainability Strategies

• 30% of the Subscribers listed in Newsweek’s Top 500 Green Companies

• 75% of the top 25 prospects are in the top 5002. The Macy’s / Schneider case study validates program’s success3. Endorsed by EPA/SmartWay Transport program

• 55% of Empty Miles subscribers are SmartWay Transport certified.

4. Reduces Congestion & Deterioration of Highway Infrastructure5. Addresses macro issues like pending government action & fuel costs

• Cap & Trade underway and fuel increases tied to rising oil trends

6. VICS, GS1 US, and GS1 Canada collaborative organizations are all not-for-profit and savings belong solely to the subscribers

“Green” Goals & DifferentiationDriving Savings and Curbing Emissions

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Empty Miles is a “Quick Win” for sustainability initiatives

Just one empty lane* per week**(*Lane = origin / destination location pair)

–Eliminates over 41 tons of CO2 per year –Saves over 3,700 gallons of diesel

• At $2.70 per gallon – that’s over $10,000• That’s the equivalent of nearly 20 barrels of crude oil

3700 gallon tank

** Based on the annual impact of a 500 mile lane run once per week. CO2 emissions are based on the EPA emissions calculator (22 lbs per gallon diesel)

Fuel consumption based on equipment rated at 7mpgCrude oil consumption based on EPA analysis of average crude refinement

Empty Miles Benefits Calculator - Helps you manage Dollar and Sustainability Savings

3700 gallon tank

Based on the annual impact of a 500 mile lane run once per week. CO2 emissions are based on the EPA emissions calculator (22 lbs per gallon diesel)

Fuel consumption based on equipment rated at 7mpgCrude oil consumption based on EPA analysis of average crude refinement

Carrier's Empty Mile cost per mile $1.70(1) What is the Point to Point Competitive rate for this lane $2.00 What Gain Sharing rate per mile would you agreed to $1.50What are the expected MPG 7What are the number of miles agreed for the return lane 500How many diverted miles to pickup load 0How many diverted miles to drop off load 0How many direct miles is the lane 500How often does this lane run empty(days per week) 1How many hours for driver delay 0Cost per driver hour $0Other costs $0Length of commitment (in weeks) 52

Number of lane miles for commited period 26000 (calculated)

Total perPer Load Committed

Period

Carrier Revenue at Empty Miles Rate $850Carrier incremental costs: - Diverted miles (pickup+drop off times 2) $0 - Driver delay $0 - other costs $0Total incremental costs $0

Carrier Empty Lane Net Revenue $750 $39,000

Shipper cost at standard rate $1,000Shipper cost at Gain Sharing Rate $750Shipper savings per load & annually $250 $13,000

Total Industry Savings (Carrier + Shipper) $52,000

Approximate "commited period" reduction of CO2 emissions for this lane

Reduced CO2 Emissions (in kilograms) 37,455Reduced CO2 Emissions (in pounds) 82,401Reduced CO2 Emissions (in metric tonnes) 37

Empty Miles Participation – U.S.

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• Current Subscribers Include nearly $ 1 Trillion in revenue mass

Well Supported and Endorsed VICS Empty Miles has: Endorsed by:

Over 40 Participants

+2500 Live Posted Lanes

+500,000 Miles

VICS is a proud supporter of the EPA SmartWay program

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Publicity is Growing !

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News Articles, Case Studies & Press Releases

Speaking Engagements

JC Penney Case Study: Coming Soon

Fed Highway Admin

Penn State

Univ.

2 UConnect sessionsLehigh Univ.

Council of Supply Chain

Mgmt ProfessionalsI-95 Corridor Coalition

Empty Miles Released in Canada

The Macy’s / Schneider National

Case Study

Presented by Steve Matheys

Executive Vice PresidentChief Administration Officer SCHNEIDER NATIONAL, INC

Macy’s / Schneider Case Study• What: Two progressive companies — Macy’s Inc., the nation’s

premier retailer, and Schneider National, a leading provider of transportation and logistics — joined forces with a renewed sense of urgency to solve this age-old, yet contemporary issue.

• How: Working together to solve a problem and create mutual value, Schneider and Macy’s are realizing both financial and environmental gains by filling empty trailers with the help of the Empty Miles Service.

• The Results: Macy’s / Schneider average an annual $25,000 savings and over 150 tons of CO2 reductions per lane !!!

The Benefits Have Been Real

The Retailer’s Perspective

• Macy’s is an organization committed to improving sustainability at every level.

• Macy’s urges its suppliers to get involved with the Empty Miles Service for a clear understanding of opportunities to eliminate or minimize wasteful spending and movement.

• Working together to identify round-trip opportunities where one leg is empty, Macy’s determines where opportunities exist to fill empty trailers.

• Since inception, Macy’s has identified 44 additional lane opportunities where the company can benefit.

Bill Connell, EVP Logistics, Macy’s Inc : "It is important for us to implement business practices that are sensitive to the environment. The Empty Miles Program greatly supports that premise while continuing to drive operational efficiency.”

The Carrier’s Perspective• Schneider National and Macy’s came together to proactively

tackle the empty miles problem head on– Both companies understood that significant work was required to create a durable

solution where both companies win

• Traditionally, carriers and retailers try to fill backhaul opportunities by manually searching within their own company and through their external network

– With the Empty Miles Service, carriers or private fleets (lane publishers) can post their empty trucks/trailers and routes, while shippers (lane subscribers) can post their transportation needs

• Key Benefits for the Carrier– When filling empty miles, carriers can actually satisfy two customers: the original shipper

and potentially a new backhaul shipper leading to greater customer satisfaction and expanded market share

The Carrier’s Perspective

– Robin Heugel, Network Manager, Dedicated Operations, Schneider National:

“Carriers want nothing more than to optimize the utilization of their trucks and trailers and the Empty Miles Service ensures that everything possible is being done to guarantee that we’re not shipping air.”

– The bottom line: Filling empty miles with the VICS Empty Miles service is …

• … good for the economy, • … good for the environment, • … and it’s good for business

• What does it take to be successful?

1. Two companies with a common objective to drive out waste in their transportation solutions thus saving money and reducing emissions

2. A willingness to work together to find solutions that create value for both parties

3. A committed set of leaders who will help overcome the inevitable obstacles

4. A strong belief that there is a better way to do things

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Macy’s / Schneider Case StudySummarized

•Log on to www.vics.org to review our webinar•Log on to www.emptymiles.org• Review the FAQs and video orientation tools• Subscribe using the online registration tool

• Annual FeeVICS members - $1,600VICS trading partner affiliates - $1,850

• Begin listing your available capacity• Begin searching for available capacity• BEGIN SAVING !!!

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… and it is easy to get started

New functionality available by

March 1 will enable even

greater network matching

visibility

Q & A

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