Schneider Logistics

Green Bay, Wisconsin

June 27, 2001

Schneider Personnel:

Chris Lofgren, CEO
Wayne Messman, Sr. VP, Sales & Marketing
Bill Braddy, VP, Engineering
George Grossard, VP, Application Services

Schneider Logistics (SLI) has become a transactional provider of technology-based solutions. SLI purchases about $1.6 billion of transportation services, primarily trucking. Through its transportation management services it handles 22 million shipments per year, most of which are LTL. Between its 3PL activities and the Tranzact freight bill payment services it purchased two year ago, it pays 17.5 million freight invoices per year. Schneider has revenues of about 170 million per year for these activities. These revenues do not include Schneider brokerage revenues, which are included in Schneider National.

There are 1,300 employees: 730 in Green Bay; 410 in Chicago; 40 in Detroit; 95 in Venlo, Netherlands and 25 in El Paso.

SLI president, Chris Lofgren, sees the company more and more as an integrator of asset provider operations. Lofgren emphasis that there is about $50 billion in transportation administrative costs in the U.S. He feels that SLI can help to reduce those costs through its technological approach.

SLI sells its services separately as applications or payments or bundled including operations. Applications are available separately or combined. They include rating, optimization, transportation manager, supply chain integration and reporting. Payment includes rating/processing, ERP, claims and reporting. Operating activities include supply chain engineering, carrier management and on-site support.

Schneider's core competencies in engineering are Network Modeling and Optimization; Transportation Analysis; Process Analysis; Inventory Modeling; Vehicle Routing and Scheduling; Data Analysis and Visualization. The tools used are:

• P-Median Customer Demand Weight Location Tool [a combination of AMPL Plus (modeling) and C-Plex (optimization engine)]
• CAPS Logistics Supply Chain Designer
• Prophesy (routing)
• Logic Tools (a flexible, quick supply chain optimizer/modeler with Excel data feeds)
• Max Load (trailer capacity optimizer)
• Maximum Coverage Location Model (SLI)
• TRAX Line Volumes/Route Visualization (SLI)
• Java-Based Edge Data Cleansing Tool (SLI)
• LVIS Data Visualization (SLI)
• Consolidation Tool (SSP-E)
• Small Package Data Warehouse (Sybase)

Bill Braddy, an ex-army logistics officer, runs the engineering section with 28 engineers/analysts. Most have advanced degrees and transportation experience. This group is a major strength at SLI. It researches and solves the following:

SLI has a truckload of intellectual capital matched only by two or three other major 3PLs.

SLI's computer network is Sun/Oracle/Unix based with the decision level referred to as Cognos. SLI emphasizes data services movements to logistics data warehouses and then business intelligence/reporting.

SLI's IT department has 510 employees minus Bill Braddy's group. There are 2,700 EDI partners, 1,000 dial-in carriers, 175 remote sites and 10 connections to very large companies. There are 3,200 Internet users.

The Internet users work through MySumit, a web-enabled version using Schneider's Sumit, shipment planner. SLI's supply chain integrator is the web-native overlay to SLI's ASP.

MySumit includes the following routines:

Files fed through MySumit are FTP, Excel and Access. Mileages are computed using longitude and latitude with circuitry and impediment adjustments. Standard mileage programs like PC-Miler are viewed as too slow to provide results.

All in all, SLI has industry-leading solutions and continues to stay in the forefront of 3PLs. SLI's management is now prepared to challenge SCM software companies with its applications offerings.