2011 Transportation Contract, Tender and Spend Management

May 2011 Bob Heaney

~ Underwritten, in Part, by ~

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Executive Summary
In February 2011 Aberdeen conducted a survey involving 174 transportation and procurement professionals. The data reveals that almost 50% of respondents are focused on improving the ability to analyze and automate true freight spend and this report details how Best-in-Class shippers have leveraged transportation spend management solutions together with process improvements to keep costs under control and maintain high levels of carrier and freight performance.

Research Benchmark Aberdeens Research Benchmarks provide an in-depth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations By outsourcing our audit and payment process weve been able to reduce our freight spend by more than $500k. Weve even reduced our errors down to 12 to 15 last year out of the more than 15,000 bills we pay yearly. ~ Logistics Manager, Small Manufacturing Firm

Best-in-Class Performance
Aberdeen used the following five key performance criteria to distinguish Best-in-Class companies: 0.7% decrease vs. last year in baseline freight spend 92.8% of carriers are compliant with their contract cost 91.9% of carriers are meeting their SLA routing compliance 9.2 - average time in days to pay a freight invoice from receipt 86.4% of transportation invoices currently audited

Competitive Maturity Assessment

Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics versus all others, including: 1.88-times as likely to practice incremental bidding between bids 1.70-times as likely to centralize transportation spend management 1.69-times as likely to electronically audit invoices against rate tables 1.50-times as likely to practice multi-round bidding 1.41-times as likely to practice online collaboration with carriers

Required Actions
In accordance with the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must: Integrate collaboratively by beginning to improve transportation spend management by automating either contract procurement or freight audit and payment 2011 collaboratively Aberdeen Group.
5200 www.aberdeen.com Complete the spend management loop and increase 723 7897 electronic payments to gain control over spend

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2011 Transportation Contract, Tender and Spend Management Implement route-based incentives / scorecards Page 3

consider community bidding and route-based incentive coupled with benchmarking for even greater reductions in contracted rates

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

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Table of Contents
Executive Summary....................................................................................................... 2 Best-in-Class Performance..................................................................................... 2 Competitive Maturity Assessment....................................................................... 2 Required Actions...................................................................................................... 2 Chapter One: Benchmarking the Best-in-Class .................................................... 4 Business Context ..................................................................................................... 4 The Maturity Class Framework ............................................................................ 5 The Best-in-Class PACE Model ............................................................................ 6 Best-in-Class Strategies........................................................................................... 6 Chapter Two: Benchmarking Requirements for Success ................................... 9 Competitive Assessment......................................................................................11 Capabilities and Enablers ......................................................................................13 Chapter Three: Required Actions .........................................................................19 Laggard Steps to Success......................................................................................19 Industry Average Steps to Success ....................................................................19 Best-in-Class Steps to Success ............................................................................19 Appendix A: Research Methodology.....................................................................21 Appendix B: The Closed Loop Transportation Spend Management Process .........................................................................................................................................23 Appendix C: Related Aberdeen Research ...........................................................26 Featured Underwriters ..............................................................................................27

Figures
Figure 1: Top Pressures for Improving Transportation Spend Management.. 4 Figure 2: Top Strategic Actions by Class................................................................. 7 Figure 3: The Best-in-Class Process Capabilities - Track and Bid ...................14 Figure 4: Automated Process Capabilities- Select, Invoice, Pay.......................16 Figure A: The Transportation Closed Loop Process .........................................23 Figure B: Technology Being Leveraged by the Best-in-Class ............................24

Tables
Table 1: Top Performers Earn Best-in-Class Status.............................................. 5 Table 2: The Best-in-Class PACE Framework ....................................................... 6 Table 3: The Competitive Framework...................................................................11 Table 4: The PACE Framework Key ......................................................................22 Table 5: The Competitive Framework Key ..........................................................22
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Table 6: The Relationship Between PACE and the Competitive Framework .........................................................................................................................................22

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Capitulo uno: Evaluacion comparative de las mejores compaas de su clase

Contexto del Negocio
Las empresas han sido la gestion de contratacion de transporte complejos y procesos durante muchos aos han ido evolucionando / maduracion dede la decada de 1980. La cadena de suministros de hoy ha tomado muchas medidas para reducir los costos de la cadena de suministros. una preocupacin central de transporte y gestores de la cadena de suministros , a travs de todos los rangos de las industrias y geografas es el control y la optimizacin del trabnsporte. Sin embargo, los resultados varian mucho en funcin de la madurez. Por ejemplo, el Best-in-class 40% eran mejores del promedio de la industria, y la mejor de su clase era el 180% mejor que las resagadas en el segmento del costo toal de carga, es decir, accesorias, cargas de combustible y el costo de la factura. El repentino aumento en el combustible y otras cargas atrapadas muchas organizaciones por sorpresa carecian de procesos suficientes para gestionar los cambios de manera efectiva. En los ltimos 12 meses, la falta de visibilidad de gasto real de informacin y la falta de flexibilidad en general en los procesos tpicamente manuales han obligado a mucho ejecutivos en busca de una mejor tecnologa y procesos para reducir costos. Figure 1: Top Pressures for Improving Transportation Spend Management
Volatility of freight costs and/or fuel cost surcharges Increasing awareness of the cost and service impact of transportation Customers demanding faster and more frequent deliveries Supply chain sourcing complexity due to increased globalization

How the Best-in-Class are Evaluating Freight Rates: 88% compare to competitors rates for pricing 65% utilize community data from peers 50% compare carriers to internal historical pricing

69%

54%

33%

33%

Carrier service-related challenges 0%

31% 20% 40% 60% 80% Percent of Respondents, n = 174

Source: Aberdeen Group, April 2011

No solo el aumento de los costos de flete y gastos de envoi obligo a muchos ejecutivos a tirar mas recursos para resolver el problema. Mas grupos dentro de la organizacin viendo verdaderos costos del 2011 Aberdeen Telephone: 617 854
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2011 Transportation Contract, Tender and Spend transporte y detrs de la creacin de mandatos para reducir costos de transporte estuvo bajo control. Management Page 7

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Como se muestra en la figura 1, mas del 50% de los encuestados se encuentran en una situacion en la que mas de la empresa conscientes del costo y el servuicio impacto el transporte en la cadena de suministros global. Por otra parte, los encuaestados tambin se enfrentan con los ejecutivos de la compaa pidiendo que se haga algo rapidamente. De echo, el 60% esta en busca de un cambio en los prximos 12 meses. Con estos desarrollos muchas organmizaciones estan luchando para tener una major comprencion de sus gastos de transporte, es decior, donde se estan gastando el dinero, y lo eficiente que son en el manejo de las relaciones y minimizer los costos. Estos es aun mas un problema par alas industrias que tienen margenes de ganancia muy finas (como el comercio minorista, tienda de comestibles, y las industrias de sonsumo durarero), donde la eficncia operative en el proceso de distribucion son funadamentales. Las companies mas grandes continuan enfrentando problemas, a pesar de la disponibilidad de tecnologia, es la falta de visibilidad en el verdadero nivel de los costos de transporte.

El marco de madurez
Aberdeen utiliza 5 criterios clave de rendimiento para distinguir el major de su clase del promedio de la industria y las organizaiones rezagadas. La tabla 1 ofrece a las empresas un marco para comparar sus resultados contra las clasificaciones. Table 1: Top Performers Earn Best-in-Class Status Definicion de clase madurez La medida del rendimiento de clase

Best-in-Class: superior 20% De calificados en desempeo

0.7% reduccion en su carga incial que pasa ao tras ao . 92.8% de los porrtadores en el cumplimiento de contrato de suministro del costo total. 91.9% de los portadores para cumplir su nivel de servicio . 9.2 dias, el tiempo medio para poder procesar y pagar una facture de flete. 86.4% de las facturas de transporte auditados.

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2011 Transportation Contract, Tender and Spend Management Page 9 1.4% de aumento en su carga incial. 78.5% de las companies en el cumplimiento de contrato de suministro Industria media 78.8% de las companies para cumplir con 50% sus niveles de servicio De los calificados 11.4 dias, tiempo medio para poder procesar y en desempeo pagar una facture de flete. 51.1% de las facturas de transporte auditadas.

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Definition of Maturity Class

Mean Class Performance

4.4% aumento en su bas de carga. 31.6% de las companies en el cumplimiento de contrato de suministro 52.2% de las companies para cumplir con sus niveles de servicio 12.8 dias, tiempo medio para poder procesar y pagar una facture de flete. 27.1% de las facturas de transporte auditadas.
Source: Aberdeen Group, April 2011

Rezagado: Bottom 30% parte inferior del agregado en desempeo

The Best-in-Class PACE Model

Using technology to achieve corporate goals and improve transportation performance is not an isolated solution it requires a combination of strategic actions, organizational capabilities, and then the proper use of enabling technologies that can be summarized as shown in Table 2. Table 2: The Best-in-Class PACE Framework Pressures
Volatility of freight costs and/or fuel cost surcharges (e.g., rates, accessories, fuel costs)

Actions
Automate data collection and analysis on freight spend and / or updates to rate tables Optimize or automate ability to source and negotiate freight rates and award contracts to the optimal carrier

Capabilities

Enablers

Expressive carrier Transportation procurement module of bidding Transportation Management (carriers submit Software (TMS) alternative bids based General Procurement tool used on bundling and for freight procurement unbundling of lanes) Specialized transportation Practice multiprocurement tool round bidding Practice electronic Automated data conversion invoice presentment and Spreadsheets for transportation procurement payment with carriers Tracking of total freight Homegrown / legacy systems for transportation cost including procurement accessories (e.g. Freight audit and payment module of detention and stop- off TMS charges), fuel charges, Specialized freight audit and payment and invoice dispute tool Source: Aberdeen Group, April 2011 costs Strategic bid allocation based on Best-in-Class Strategies business performance In response to the key pressure to contain fuel cost and the general of carriers

need to control overall transportation costs within the extended supply

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chain (Figure 1), the Best-in-Class are leading the charge in the following areas.

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Figure 2: Top Strategic Actions by Class

Automate data collection and analysis on freight spend and / or updates to rate tables Collaborate and synchronize data with carriers, suppliers and trading partners Enforce adherence to our routing guide and / or to convert bid responses to rate tables Tie transportation, carrier selection, audit and payment together in a single process 0% 47% 40% 40% 38% 36% 31% 38% 28% 15% 32% 21% 29% 20% 40% 60% Best-in-Class Industry Average Laggard

Percent of Respondents, n = 174

Source: Aberdeen Group, Month 2011

In Figure 2, almost 50% of respondents focused on improving their ability to analyze and automate true freight spend. In addition to working on improving visibility, survey respondents recognize that visibility isn't enough and are putting processes in place to better utilize spend data and improve/optimize the activities around sourcing and payment. Much of the attention today is around extending data visibility and collaboration with carriers, suppliers and trading partners. The number of trading partners in today's global supply chain is a challenge that every enterprise must face. The key words from the figure above are visibility, collaboration / synchronization, selection / adherence, and "closing the loop" on procurement and payment (the closed-loop process is one we have written about in the past see Appendix B for an illustration of this system). Now, more then ever, Best-in-Class companies are embracing the people, processes and technologies that drive superior results which are needed to address global cost challenges and service requirements. Recognizing that transportation procurement and transportation payment are unique functions in most companies - this report expands upon these two primary categories at the "front end" and "back end" of transportation spend, highlighting Best-in-Class methods for managing each.

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Aberdeen Insights Closing the Loop on Transportation Spend If the last two years has taught us anything it's that visibility into and control of the entire supply chain is critical in fully understanding the true impacts to cost and service in this highly interdependent global supply chain. That focus has suddenly shifted to "closing the loop" on transportation spend. This shift ensures that the actual transportation spend is accounted for in every strategy and every tactical decision made, and is no longer seen as an after-thought. Understanding the actual spend on transportation, including drilling down to all accessorials and surcharges, is the most important step to bringing transportation spend under control and creating more strategic value. Despite the importance of this information and its impact on the strategic actions behind transportation sourcing and procurement decisions, many organizations continue to run blind. For instance Laggard companies achieved only 31.6% compliance carrier contractual costs versus actual costs and only a 52.2% compliance to services levels (versus a 91% to 92% compliance to both metrics by the Best-in-Class, Table 1). The entire transportation procurement and payment process relies on information as a valuable input to keep the "closed loop" lifecycle moving. Information collected at each stage (see Appendix B for a fuller description) whether it is regarding freight rates, contract performance metrics, actual cost updates, and payment details are required inputs into each procurement cycle in order to drive service and cost imbalances out of the business. In many cases today, companies continue to rely on paper-based tracking of this information, or keeping track in spreadsheets. Leveraging technology to track, analyze, and provide visibility to critical transportation spend data. The technology can be a competitive differentiator and lead to reducing costs (more on this in the Technology section). Transportation and logistics is an ever-changing landscape. Rates and capacities are in a constant state of flux. Managing these highs and lows is critical to sustaining transportation and supply chain costs. Keeping up with the changes and controlling them will become increasingly strategic. Leveraging the technology and processes available will become a necessity. In the next chapter, we will see what the top performers are
2011 Aberdeen Group. www.aberdeen.com Now that we have reduced the non-value add part of the process we can focus more on vendor compliance, payment terms and other activities that continue to drive more bang for the buck from processes; thats had a significant impact on our entire organization." ~ Chris Cavin, Director of Transportation, RockTenn

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Chapter Two: Benchmarking Requirements for Success

One question explored throughout this report is how the Best-inClass are embracing automated process to leverage transportation spend management capabilities. As high as 75% of the leading companies (only 45% for Laggards see Table 3) are tracking total freight cost including accessories. These companies are making transportation a strategic part of the supply chain and not a mere afterthought. Some companies have been able to gain visibility into the cost of their transportation spend, focus resources on driving efficiencies, enhance or acquire new skills and insights, and manage through the difficult ebb and flow of the specific cost drivers impacting transportation. These leaders are closing the loop on transportation spend and are better able to tie transportation, carrier selection, audit and payment together in a single process (Figure 2). The Best-in-Class are responding and leading the pack, widening the performance gap, where they are 6.1 percentage points advantaged versus Laggards in their "baseline freight cost" metric, Table 1. The following case study is an example of how one company has taken control of their transportation spend and managed to turn the corner to become Best-in-Class. This company has turned transportation from a cost center to a competitive differentiator. Case Study E-commerce Freight Incentive and Spend Management Services Yield $1 Million in Freight Savings S&S Activewear is a midsized supplier and distributor of 60 brand name apparel items such as t-shirts and sweatshirts in about 2,000 overall styles. While anyone can order the apparel items the typical buyer is an apparel customizer. The t-shirt customizing shop is the most common example and these shops will order t-shirts by the piece with a typical order comprised of two to three boxes shipping via parcel from a single distribution center located in Chicago. On a typical day this distribution center processes several 100,000 units or about 8,000 cases from orders placed 24 hours a day primarily from the company's e-commerce website. The e-commerce capability has been a channel of growth for the company which has grown over the 15 year period since the company was formed. This has fueled the company's transportation spend, now at $10 to $12 million annually, leading to major restructuring efforts at the company.
2011 Aberdeen Group. www.aberdeen.com Best-in-Class vs. All Others in Knowledge/Performance 1.44-times as likely to practice formal root cause analysis on invoice errors (56% vs. 39%) 1.2-times as likely to support negotiations of 'all in' rates including assesssorials ( 56% vs. 44%) 1.15-times as likely to use incentive-based freight contracts (30% vs. 26%)

"One of the key elements of total delivered cost for our company as well as a competitive differentiator is transportation cost. So a few years ago we began to partner with a Transportation Spend Management (TSM) services company," says Jim Shannon, Controller at S&S Activewear.
continued

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2011 Transportation Contract, Tender and Spend Management "One of the key elements of total delivered cost for our company as well as a Page 16 differentiator is transportation cost. So a few years ago we competitive began to partner with a Transportation Spend Management (TSM) services company. Overall this new partnership has allowed us to document savings upwards of $1 million off of our freight costs while at the same time improving our reach from the single DC on both one day and two day delivery to 40 states a threefold increase. ~ Jim Shannon, Controller S&S Activewear

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Case Study E-commerce Freight Incentive and Spend Management Services Yield $1 Million in Freight Savings "Overall this new partnership has allowed us to document savings upwards of $1 million off of our freight costs while at the same time improving our reach from the single DC on both one day and two day delivery to 40 states - a threefold increase," the Controller goes on to say. The e-commerce platform allowed the company to increase volume and value to existing customers. "But the website was also a marketing platform that allowed the company to move away from viewing freight as a cost that was passed on to the customer and instead to use the web and our partnership with the TSM services company to restructure our transportation pricing and delivery territory. To provide an incentive we have increased order size and delivery territory by offering free freight on qualifying web orders of $150 or more. This is a market differentiator and cost equalizer to reach new customers and states," said the Controller. The following key points define the restructuring efforts and the manner in which the TSM service partnership facilitates the order, delivery, confirmation/audit and payment: Orders are placed and free freight itemized. Customers can order via an 800 number, email or the web. The new ecommerce platform calculates total cost displaying freight at list rate (but will subtract this as a savings for qualifying orders above the $150 minimum). Based on the destination zip code the carrier (mainly parcel but TL and LTL are used for larger shipments) will be selected and the delivery-tocustomer date is determined. Ninety percent (90%) are within one to two days from the date of order. Orders are tendered to carriers at the Chicago DC and shipped within 24 hours. The applicable carrier UPS, FedEx or TL/LTL acknowledges pickup and statuses each order by tracking number to the e-commerce system and the realtime SaaS freight/audit system. 60% increase in sales volume due to zone skipping support. Based on zip codes aggregated orders to predetermined parcel hubs (in places like Columbus, Kansas City, and as far as Pennsylvania) are batched to allow LTL or TL deliveries. The cost benefit of these mode shifts is rebated back to the
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company from the applicable carrier and is verified by the TSM system and reports. This strategy has also allowed the company to reach territories in the radius of the hub within a two day customer delivery promise which, without zone skipping support, would have been in three to four day parcel zones. An estimated 60% increase in sales volume was enabled this way.
continued

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Case Study E-commerce Freight Incentive and Spend Management Services Yield $1 Million in Freight Savings 100% freight order tracking and audit service. The SaaS based TSM modules are used to report on volumes tendered to each carrier and mode and to provide daily recaps on all freight shipments according to contractual rates and freight discounts as well as exception management down to specific shipment. Real-time transportation spend analytics. The SaaS based TSM modules help insure that the company savings are consistent with the 10% to 15% in bundled freight rate and accessorial discounts that the company and the TMS services firm were able to negotiate during the last, and the future, contracting phase.

"In summary the restructured transportation solution and our partnership with the TSM services firm has enabled our e-commerce strategy to expand and grow our volume and geographic reach. We now have negotiated our baseline freight costs down by over $1 million per year and are able to share these savings and incent customers to place larger orders and enjoy lowest landed cost to their market," concludes the Controller.

Competitive Assessment
Aberdeen Group analyzed the aggregated metrics of surveyed companies to determine whether their performance ranked as Best-inClass, Industry Average, or Laggard. In addition to having common performance levels, each class also shared characteristics in five key categories: (1) process (the approaches they take to execute daily operations); (2) organization (corporate focus and collaboration among stakeholders); (3) knowledge management (contextualizing data and exposing it to key stakeholders); (4) technology (the selection of the appropriate tools and the effective deployment of those tools); and (5) performance management (the ability of the organization to measure its results to improve its business). These characteristics (identified in Table 3) serve as a guideline for best practices, and correlate directly with Best-in-Class performance across the key metrics. Table 3: The Competitive Framework
2011 Aberdeen Group. www.aberdeen.com Telephone: 617 854 5200 Fax: 617 723 We've spent a considerable amount of effort this past year to establish stronger controls in our freight settlement processes. We recognize the need for a more scalable and commercial solution as a next step to support the process reengineering efforts weve implemented thus far. ~ Robert Sliter, Logistics Leader, Owens Corning

2011 Transportation Contract, Tender and Spend Management Best-in-Class Average Laggards Page 20 Practice multi-round bidding 75% 52% 45%

Process

Tracking of total freight cost including accessories (e.g. detention and stop-off charges), fuel charges, and invoice dispute costs 72% 38% 74%

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Process (cont.)

Best-in-Class

Practice incremental bidding as requirements change between bid 62% 35% 34% Expressive carrier bidding (carriers submit alternative bids based on bundling and unbundling of 59% 45% 44% Electronically assisted bid analysis 56% 47% 38% Strategic bid allocation based on business performance of carriers 56% 47% 35% Allow carriers to suggest alternate routing

Average

Laggards

How the Best-in-Class are Performing vs. Others 1.88-times as likely to practice incremental bidding as requirements change between bid contracts 1.70-times as likely to centralized transportation spend management platform in place, capable of multi- language, multicurrency 1.69-times as likely to automatically audit invoices against electronic rate tables 1.50-times as likely to practice multi-round bidding 1.44-times as likely to practice formal root cause analysis for repeated invoice errors 1.41-times as likely to practice online collaboration with carriers for invoice exception handling 1.35-times as likely to practice electronic invoice presentment and payment with carriers

Organizational

Knowledge / Performance Management

56% 51% 29% Centralized transportation spend management platform in place, capable of multi-language, multi36% 21% 51% Practice online collaboration with carriers for invoice exception 39% 20% 45% Negotiate 'all in' rates with carriers instead of having separate 48% 35% 56% Practice formal root cause analysis for repeated 56% 45%errors 28% invoice Use incentive-based freight contracts 30% 26% 25% Practice electronic invoice presentment and payment 66% with 57% carriers 35% Automatically audit invoices against electronic rate 61% 42% tables 23% Automated carrier selection based on known data and rules 51% 43% 38% Practice online bidding via web portal 44% 41% 40% OCR for paper to electronic conversion of freight invoices 42% 30% 21% Electronically assisted bid allocation optimization to award lanes to 41% 34% 24%

Technology Management

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Best-in-Class

Average

Laggards

Electronic routing guides in TMS for day-to-day carrier selection decisions 54% 38% 34%

Technology Enablers

Transportation procurement module of Transportation Management Software 45% 41% 30% (TMS) Specialized freight audit and payment tool 34% 31% 22% 31% 31% 30% Specialized spend analytics software
Source: Aberdeen Group, April 2011

Capabilities and Enablers

Based on the findings of the Competitive Framework and interviews with end users, Aberdeens analysis of the Best-in-Class demonstrates that it is truly a combination of superior and balanced performance across each of the sections that denotes the overall level of transportation success.

Process - Cost Tracking and Electronic Collaboration

Over 70% of the companies, from the Chief Supply Chain Officer Survey, January 2011, indicated that internal/external collaboration was integral to their supply chain strategy. When it comes to process, companies of all classes have begun to harness technology in a collaborative fashion. But the Best-in-Class are doing a superior job, primarily in the area of tendering bids and doing electronic assessments or allocations with their carriers. Figure 3 illustrates some of the process collaboration gaps where the following observations and recommendations can be made. Collaborate to obtain and track true cost. Only 38% of the Laggards are tracking actual costs and accessorials. The Bestin- Class and Industry Average track at the 74% and 72% level respectively. Without actual costs, the ability to audit and measure compliance to plan, variances in fuel surcharges and accessorials in particular, cannot be achieved. For those that are tracking these costs, ensure that monitoring is taking place in a collaborative fashion. Collaborate and examine bundled and unbundled costs. At 75%, the Best-in-Class are 50% more likely than all others to practice collaborative multi-round bidding. Without this

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capability it is difficult to secure your best overall rates and to analyze the potential savings of bundling several low volume lanes. Failure to consider bundling these lanes or surcharges into a base contract can cost as much as 15% more for the associated volumes.

Complete the collaborative bidding cycle: start with selection and end with electronic bid assistance. The Bestin-

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Class are anywhere from 1.2 to 1.9-times as likely as all others to be able to optimize the collaborative bid and selection process - whether performing expressive bidding or strategic carrier allocations or electronically assisting the bid process. Without collaboration at each phase, it is likely that savings will be left behind during transportation execution. Figure 3: The Best-in-Class Process Capabilities - Track and Bid
Practice multi-round bidding Tracking of total freight cost including accessories (e.g. detention and stop-off charges), fuel charges, and invoice dispute costs Practice incremental bidding as requirements change between bid contracts Expressive carrier bidding (carriers submit alternative bids based on bundling and unbundling of lanes) 75% 52% 45% 74% 72% 38% 62% 35% 34% 59% 45% 44% 56% 47% Best-in-Class 38% Industry Average Laggard 56% 47% 35% 20% 40% 60% 80%

Electronically assisted bid analysis

Strategic bid allocation based on business performance of carriers 0%

Percent of Respondents, n = 174

Source: Aberdeen Group, April 2011

Organization
When it comes to organizational capabilities the Best-in-Class are much more likely to organize capability around a centralized transportation platform capable of handling global complexity including multi-lingual and multi-currency functionality (Table 3 under Organization). At 51% the Best-in-Class are more than twice as likely as Laggards to have this capability. This fact is compounded by the increasing globalization of companies, (i.e., more than 85% of all respondents are global). Having a centralized platform to collect and share data across regions divisions and operating silos enables the company to evaluate its extended supply chain and analyze transportation spend management data to streamline its operations. In our study, this was one of the most significant areas for savings opportunities with some companies uncovering as much as 35% in cost savings directly applicable to cross-region optimization
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2011 Transportation Contract, Tender and Spend initiatives. If a company is not organized in a fashion to centralize this Management Page 25 shared data, then they are at a distinct disadvantage in performing

periodic strategic and tactical assessments.

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The Best-in-Class are centralized with respect to transportation data but are primarily "managed globally". When compared to all others, Best-in- Class firms are more likely to organize/centralize these two key transportation spend management functions and manage globally: 1.65-times as likely to have transportation procurement functionality (61% vs. 37% all others) 1.61-times as likely to have freight audit and payment functionality (53% vs. 33% all others)

And finally, in the July 2010 report, International Transportation: Optimize Cost and Service in a Global Market, the advantages of online carrier portals to handle a variety of transportation costs and events were highlighted, and invoicing is no exception. Here again we find that the Best-in-Class at 45% are more than twice as likely as Laggards to have this online portal capability for invoicing (see Table 3, Organization).

Knowledge Management and Performance Management Knowledge is power when it comes to internal and
external performance management. A few of the related areas where the Best-in-Class demonstrate superior capabilities ranging from root causes analysis to incentives are found in Table 3. Laggard companies are only able to accurately report 31% compliance to contractual cost and 52% compliance to service level requirements with their carrier base (Table 1, Pressures). The higher level of success in that the Best-in-Class demonstrate (up to 92% on the same compliance metrics) is directly related to the measurement and performance management skills an organization deploys. Both having actionable metrics and expectations for service/cost as well as measuring carrier performance frequently are central to the success of the Best-in-Class. Earlier we saw that the Best-in-Class are able to accurately determine their true or actual costs and that Best-in-Class companies have a centralized platform upon which to store shared data and access their transportation spend. In keeping with the closed loop process, it is difficult to perform analytical and exception-based analysis to negotiate or create contract incentives with carriers (Table 3) without having an ability to conduct historical and contractual cost comparisons.
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Technology

The richness of data required to evaluate plan versus actual cost and perform transportation spend analytics is vast and daunting. It is clear that technology and automation tools are requirements for these efforts to be successful for companies of any scale. The Best-in-Class are more highly automated where they are anywhere from 1.17 to 1.5times as likely as all others to have each of the technology enablers indicated in the competitive framework (Table 3, Technology Enablers).

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Large companies need to automate just to keep up with the deluge of shipments. As a result, large companies can experience considerably higher productivity levels among other benefits. The time to payment metric shows that the Best-in-Class are, on average, able to process and pay a freight invoice in 9.2 days or two to three days more quickly than Industry Average and Laggard companies respectively. Automation is also saving them on the average cost to process and invoice, where at $10.98 per invoice they are saving $2.96 and $11.04 per invoice vs. Industry Average and Laggards respectively (see sidebar).

Cost per Freight Invoice Under Automation: $10.98 Best-in-Class $13.94 Industry Average $22.02 Laggard The Best-in-Class are: Saving $2.96 and $11.04 per invoice vs. Average and Laggards respectively

Automated Features: Procurement, Contract/Track and Freight Invoice, Audit and Pay
When it comes to software capabilities there are numerous choices for the transportation professional. With ERP and Supply Chain Management suites, complete transportation management systems, and a variety of specialized tools and optimizers, companies have a wide range of options available to automate various aspects of their transportation spend management. In almost every instance, companies that are able to leverage technology to remove the manual components of everyday tasks are able to focus more on delivering value versus entering data. In Figure 4, we have captured some of the key areas where the Best-in-Class have demonstrated more advanced capabilities. Figure 4: Automated Process Capabilities- Select, Invoice, Pay
Practice electronic invoice presentment and payment with carriers Automatically audit invoices against electronic rate tables 66% 57% 35% 61% 42% 23% 51% 43% 38% 44% 41% 40% 42% 30% 21% 20% 40% 60% Best -in-Class Industry Average Laggard 80%

Able to process and pay a freight invoice in 9.2 days or 2 to 3 days more quickly

Laggard Reasons for Not Investing in Technology: 46% up-front costs of solution too high 34% upfront costs of changing processes are too high 26% software integration is too difficult / expensive

Automated carrier selection based on known data and rules Practice online bidding via web portal

OCR for paper to electronic conversion of freight invoices 0%

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2011 Transportation Contract, Tender and Spend Percent of Respondents, n = 174 Management Page 29 Source: Aberdeen Group, April 2011

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One area of known popularity is electronic invoice presentment and payment where the Best-in-Class (at 66%) are 1.5-times as likely as all others to have automated capabilities in place. This is a big difference particularly if you are a large shipper with millions of shipments and invoices to audit and pay. For these shippers, it therefore follows that the ability to automatically audit invoices is equally an important capability. This is a system that allows for each and every invoice to be compared and contrasted with contractual rates and historical trends. This system also provides the ability to support automated payment for items that are within user configurable acceptance criteria. This capability is also the type of solution that was deployed in our case study example at S&S Activeware. This system allowed S&S Activeware to expedite the payment process as well as collect historical transportation spend data to assist the next freight procurement cycle. It should be noted that Laggard companies at only 23% are behind the curve and, likewise, they are hampered in moving very far towards the goal of 100% freight audit. Indeed, at 27.1% they are behind the Industry Average and the Best-in-Class (52% and 87% respectively, Table 1, Metrics). Imagine having to manually process hundreds or thousands of payments each month without any automation in place to streamline the review and payment. On the procurement-to-pay side of things, the Best-in-Class at 51% are 1.2- times as likely as all others to perform automated carrier selection. This capability allows them to demonstrate higher adherence to the routing guide and standard transportation lanes. What about promotional items or new spot order/lanes? Here the Best-in-Class are also leveraging online bidding tools for dynamic tendering of freight (44%) and have automated OCR techniques for conversion of freight invoices from paper to digital. Across a broad range of transportation components today's software and automation tools are providing a strong foundation for companies to handle each step in the closed loop transportation procure-to-pay cycle. Today's software aids in eliminating manual steps where possible and bringing down overall processing costs. Beyond the savings in time and labor, those companies that excel in automation and transportation spend management are able to reduce their baseline freight costs by 4% to 5% and improve carrier service levels compared to their peers.

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Aberdeen Insights Technology Aberdeen research indicates that companies take three distinct approaches with enabling technology: using a best-of-breed model, a collaborative outsourcing model (leveraging third party providers), or a supply chain specific application within a broader SCM/ERP suite. The technology section highlights key areas for investment and automation that should be considered when a company is enhancing or acquiring new capability around TPP and transportation spend management. Regardless of the specific approach, the adoption of technology has taken a turn for the better with a focus around four key criteria for making investment decisions. Three of these key criteria demonstrate that organizations understand the value of these solutions and are insisting that there is an ability to create more of an end-to-end process environment. The four criteria are: Feature and functionality / capabilities (72%) Price (67%) The ability to interface with existing technology / solutions (65%) Ability to extend functionality of existing solutions

(52%) Following features, "price" is a key requirement and at 67% it is important to contrast this with another key finding - over 40% of all respondents indicated that these solutions are still too expensive up- front, or too expensive / difficult to implement. For these companies much of the upfront costs and lead-times can be substantially reduced. As depicted in the case study and as discovered by many who have conducted the proper due diligence, it is important to be aware of the variety of solutions available today and the deployment options they provide. It is also important to look to the areas where others have found the biggest savings (see Summary Insight). The evolution of SaaS and on-demand offerings from most solution providers has delivered on the promise to decrease these historical hurdles. Companies must invest the time to educate their decisionmaking teams on the latest options in order to complete the proper due diligence around these solutions.

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Chapter Three: Required Actions

Whether a company is trying to move its performance in transportation spend management from Laggard to Industry Average, or Industry Average to Best-in-Class, the following actions will help spur the necessary performance improvements:

Laggard Steps to Success

Measure and audit religiously. Only 27% of Laggard companies currently are measuring freight cost and service compliance by auditing. The Best-in-Class at 87% are 3.2- times more likely to perform auditing and their metrics reflect it. Working to get control of transportation spend data is the endgoal, however it's more important to get visibility and measure compliance to cost and service in order to identify short and long term improvements. Increase the ability to track cost. Only 38% of the Laggards are tracking actual costs and accessorials. The Best-in-Class and Industry Average track at the 74% and 72% level respectively. Many companies still rely on paper-based tracking of this information, or keeping track in spreadsheets. It is critical to leverage technology to provide visibility to critical transportation spend data.

auditing to automated payment (a 27 percentage point capabilities gap). By automating this final step they can increase processing speeds and accuracy and "close the loop on spend."

Best-in-Class Steps to Success

Optimize dynamically with the online community. About 40% of Best-inClass companies are leveraging spend data visibility and optimization for bidding via community web portals. Optimizing

Industry Average Steps to Success

Integrate collaboratively with external groups. Working to get control of transportation spend data is critical. Over 30% of all companies cite collaboration and synchronization of data with carriers, suppliers and trading partners as the second highest strategic action (Figure 2). But for the Industry Average on a global level only 16% can share that data with external partners. Collaborating to combine data into a global view will greatly increase spend analysis value-add opportunities and sharing with external partners will drive better performance. Close the gap on electronic payments. While over 78% of Industry Average companies measure carrier compliance to cost they have not fully automated electronic payment. Our survey indicated that only 51% of them have moved beyond

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2011 Transportation Contract, Tender and Spend Management Page 33 Manage TMS Globally Best-in-Class vs. Others 1.65-times as likely on transportation procurement (61% vs 37% others) 1.61 x as likely on freight audit and payment (53% vs 33% others) Outsourcing Audit and Payment Process: 62% Best-in-Class 33% Industry Average 22% Laggard

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the bid process is limited to your level of visibility. There are numerous public and private bidding and community freight boards that post capacity daily. By leveraging these tools into your daily freight operations, you can optimize your movements to get the best rates and greatly increase freight utilization. Implement freight-based incentives / scorecards. With the superior visibility and knowledge of historical costs of freight spend; score carding at a higher level can help drive further cost reductions. Rather than getting too lost in the individual charges, placing a score (an index) on each route and working to reduce the overall average cost per route can greatly improve savings and overall spend management. Currently about 30% of the Best-in- Class are attempting to use incentive based freight contracts or scorecarding to evaluate or negotiate all-in rates for freight. Aberdeen Insights Summary The volatility and complexity in the world of transportation continues to grow exponentially and every company is looking for ways to sustain costs. The predominant pressure is the current volatility of freight and fuel costs. To combat this pressure, Best-in-Class companies are looking to optimize the process of sourcing, selecting, and negotiating freight rates, and increasing the degree of collaboration and data-synchronization with both their carriers and trading partners. With this primary objective in focus, the leading companies are continuing to acquire transportation spend control. To achieve the capabilities needed to support these strategies, Bestin-Class companies utilize both foundational systems, such as TMS, but also specialized point-solutions for auditing, data analysis, and electronic communications or look to logistics services providers to provide the same. Better management of transportation procurement, audit, and payment is enabling companies to negotiate reduced rates and lower the total costs of processing invoices. Through a combination of best practices and business transformation, radical improvement can be achieved. Automation of these processes, along with end-toend integration, and the real-time availability and use of spend data, provides Best-in-Class companies with the ability to reduce overall freight spend. Moreover, these companies are also able to reduce the labor costs associated with managing these typically manual processes. Supply chain executives want to be strategic and drive value. Getting costs under control has always been a goal and the "closed loop" transportation spend management cycle is capable of driving continuous value. Understanding and managing transportation costs and new practices will be a significant competitive advantage going forward; it will produce the leaders of the next decade.

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Our carriers at Sunoco have great contact with our customers. They can now inform our sales and support staff when a customer needs assistance or new ways to provide value-added services to them in the future. In the end, were all working together and lowering costs as a team. ~ Thomas C. Moyer, Sr. Transportation Analyst, Sunoco

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Appendix A: Research Methodology

Between March and April 2011, Aberdeen examined the use, the experiences, and the intentions of more than 174 enterprises regarding transportation contract, tender and spend management in a diverse set of enterprises. Aberdeen supplemented this online survey effort with interviews with select survey respondents, gathering additional information on transportation contract, tender and spend management strategies, experiences, and results. Responding enterprises included the following: Job title: The research sample included respondents with the following job titles: Manager (40%); Managing Director / Director (30%); EVP / SVP / VP (11%); CEO / President (7%); Consultant (6%); Staff (4%); and other (2%). Department / function: The research sample included respondents from the following departments or functions: supply chain, or logistics manager (55%); procurement (13%); operations manager (8%); senior management (7%); sales and marketing staff (8%); and IT manager or staff (3%). Industry: The research sample included respondents from: Transportation / logistics (13%); Wholesale Distribution (7%); Retail and Apparel (9%); Food and Beverage (9%); Industrial Manufacturing (10%); Consumer Packaged Goods (CPG) (5%); Computer Equipment (5%); Automotive (4%); Health and Medical (3%); Government, Aerospace and Defense (4%); and other (31%). Geography: The majority of respondents (72%) were from North America. Remaining respondents were from Europe (17%) and the Asia-Pacific region (11%). Company size: Forty-nine percent (49%) of respondents were from large enterprises (annual revenues above US $1 billion); 33% were from midsize enterprises (annual revenues between $50 million and $1 billion); and 18% of respondents were from small businesses (annual revenues of $50 million or less). Headcount: Fifty-seven percent (57%) of respondents were

from large enterprises (headcount greater than 1,000 employees); 26% were from midsize enterprises (headcount between 100 and 999 employees); and 17% of respondents were from small businesses (headcount between 1 and 99 employees).

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2011 Transportation Contract, Tender and Spend Management Page 37 Study Focus Responding transportation management executives completed an online survey that included questions designed to determine the following: The degree to which TPP solutions are deployed in their operations and the financial implications of the technology The structure and effectiveness of existing TPP implementations Current and planned use of TPP to aid operational and audit activities The benefits, if any, that have been derived from TPP initiatives The study aimed to identify emerging best practices for TPP, and to provide a framework by which readers could assess their own management capabilities.

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Table 4: The PACE Framework Key Overview

Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows: Pressures external forces that impact an organization s market position, competitiveness, or business operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive) Actions the strategic approaches that an organization takes in response to industry pressures (e.g., align the corporate business model to leverage industry opportunities, such as product / service strategy, target markets, financial strategy, go-to-market, and sales strategy) Capabilities the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products / services, ecosystem partners, financing) Enablers the key functionality of technology solutions required to support the organizations enabling business practices (e.g., development platform, applications, network connectivity, user interface, training and support, partner interfaces, data cleansing, and management)
Source: Aberdeen Group, April 2011

Table 5: The Competitive Framework Key Overview

The Aberdeen Competitive Framework defines enterprises as falling into one of the following three levels of practices and performance: Best-in-Class (20%) Practices that are the best currently being employed and are significantly superior to the Industry Average, and result in the top industry performance. Industry Average (50%) Practices that represent the average or norm, and result in average industry performance. Laggards (30%) Practices that are significantly behind the average of the industry, and result in below average performance. In the following categories: Process What is the scope of process standardization? What is the efficiency and effectiveness of this process? Organization How is your company currently organized to manage and optimize this particular process? Knowledge What visibility do you have into key data and intelligence required to manage this process? Technology What level of automation have you used to support this process? How is this automation integrated and aligned? Performance What do you measure? How frequently? Whats your actual performance?
Source: Aberdeen Group, April 2011

Table 6: The Relationship Between PACE and the Competitive Framework

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2011 Transportation Contract, Tender and Spend PACE and the Competitive Framework How They Interact Management Page 39 Aberdeen research indicates that companies that identify the most influential pressures and take the most transformational and effective actions are most likely to achieve superior performance. The level of competitive performance that a company achieves is strongly determined by the PACE choices that they make and how well they execute those decisions.
Source: Aberdeen Group, April 2011

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Appendix B: The Closed Loop Transportation Spend Management Process

Source: Transportation Procurement and Payment: Gain Control over Spend , Aberdeen February 2010

The February 2010 Aberdeen report on Transportation Procurement and Payment, (Transportation Procurement and Payment: Gain Control over Spend), delved deeply into the concept of closed loop transportation management. The technology that supports a closed loop transportation management platform is not new. Indeed this is very much in keeping with a key finding of Aberdeen's research demonstrating that companies are departing from thinking about transportation management in a linear format and, instead, as a closed loop, with each step in the process feeding the subsequent ones. Figure A depicts the "closed-loop spend management" cycle, with the capabilities shown on the inner circle, and the enabling technologies that drive integration and automation in the two outermost circles. A common, but less effective alternative to the closed-loop concept involves having the electronic flow of data cease at the audit and pay step. The model shown below completes the loop by having the shipment history form the audit and pay step flow directly into a spend analytics step, which is then used as a tool to create the request for proposal in the procurement process. Figure A: The Transportation Closed Loop Process

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Source: Aberdeen Group, February 2010

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In their steps towards closing the loop, Aberdeen found that companies take three distinct approaches with enabling technology: using a best-of- breed model, a collaborative outsourcing model ( leveraging third party providers), or a single application suite. The best-of-breed model involves using a combination of specialized bid optimization tools, Transportation Management Software (TMS), audit and payment applications, and transportation spend analytics solutions to produce a feature-rich platform of integrated applications. Often the outsourcing model leverages the same tools and process but involves an alliance with a logistics service provider for procurement, audit/pay or both. Alternatively, with a TMS, the various steps in the loop are all offered by a single software developer. In each case, the critical link to the individual processes is automated data conversion to ensure that there is an efficient information exchange at each step in the cycle. In almost every instance, companies that are able to leverage technology to manage processes and remove the manual components of everyday tasks are able to focus more on delivering value versus entering data. In using the Aberdeen methodology to analyze technology usage, there continues to be greater adoption associated with the Best-in-Class group and alignment with driving better performance in key metrics. Across six different categories of technology usage (Figure B), over 40% of the Best-inClass are taking advantage of opportunities to automate as much of the processes as possible. Figure B: Technology Being Leveraged by the Best-in-Class
Best-in-Class 65% 57% 44% 33% 37% 29% 19% 10% 10% 13% 36% 27% 60% 54% 53% 44% 34% 34% Average Laggard n = 236

Electronic invoice presentment and payment with carriers

Electronically assisted bid analysis

Electronic bid TMS routing guide for Specialized freight (TMS) Transportation allocation optimization day to day carrier audit and payment tool procurement module to award lanes. selection decisions

Electronic Data Conversion

Technology Components

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Source: Aberdeen Group, February 2010

In each case under electronic data conversion, the Best-in-Class are 2to 6- times as likely as Laggards to have automation in place especially around the sourcing and procurement process, updating and auditing rate guides, and optimally awarding lanes via electronic updates.

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Under technology components, they are again 2.5 to 6 times as likely as Laggards to use extensions of TMS procurement solutions and specialized freight audit and payment tools to speed and automate the front-end to back-end of closed loop transportation process and enable tighter spend control.

Key Benefits of Closed Loop Process

Key benefits of utilizing a true close loop spend management process to end users include the opportunities to control and manage transportation procurement and settlement: Monitor, reduce and control contracted freight rates and spend Track and control non-contracted freight rates and accessorial charges Reduce labor required to convert bid data into contract and then into rate tables and to support invoicing/auditing Reduce labor requirements for freight invoice auditing

Measure and control carriers compliance to contract costs and service level agreements: Improve spend data visibility and analysis for more effective bid management and negotiating new/updated contracts Improve ability manage information and enforce rules for carriers to adhere to contracts Reduce amount of over-billing from carriers Enable closed loop monitoring/auditing of budgets, contracts and actual charges

In summary, better management of transportation procurement, audit, and payment is enabling companies to negotiate reduced rates and lower the total costs of processing invoices. The automation of these processes, along with end-to-end integration, and the real-time availability and use of spend data, has provided Best-in-Class companies with the ability to reduce overall freight spend, as well as to reduce the labor costs associated with managing these typically manual processes.

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Appendix C: Related Aberdeen Research

Related Aberdeen research that forms a companion or reference to this report includes: International Transportation: Optimize Cost and Service in a Global Market; July 2010 Transportation Procurement and Payment: Gain Control over Spend; February 2010 State of Retail Logistics: Strengthening Cross-Channel Supply Chain Execution, March 2010 Integrated Transportation Management: Improve Responsiveness with Real-Time Control of Execution; October, 2009 Evaluating Logistics Outsourcing: Look Before You Leap! ; October, 2009 Tending the Fleet: Paving New Roads with Effective Fleet Management; September, 2008 No Excuses! Why Optimizing Transportation Management is Within the Reach of Every Company; July, 2008 Achieving Closed-Loop Transportation Spend Management; January, 2008

Information on these and any other Aberdeen publications can be found at www.aberdeen.com.

Author: Bob Heaney, Senior Research Analyst, Supply Chain Management (bob.heaney@aberdeen.com)
For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeens research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com. This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by

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Aberdeen Group, Inc. (2011a)

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Featured Underwriters
This research report was made possible, in part, with the financial support of our underwriters. These individuals and organizations share Aberdeens vision of bringing fact based research to corporations worldwide at little or no cost. Underwriters have no editorial or research rights, and the facts and analysis of this report remain an exclusive production and product of Aberdeen Group. Solution providers recognized as underwriters were solicited after the fact and had no substantive influence on the direction of this report. Their sponsorship has made it possible for Aberdeen Group to make these findings available to readers at no charge.

Founded in 1998, BirdDog operates two business units BirdDog Solutions and Foley Carrier Services. BirdDog Solutions is the transportation procurement expert and trusted partner to more than 1,200 large-volume shippers. Leveraging technology and expertise that was previously available only to Fortune 500 companies, we consistently trim 10% to 20% from our clients annual transportation costs. Under the Foley brand, we deliver Help at Every Turn to more than 17,000 DOT-regulated motor carriers. Our comprehensive line-up of DOT compliance and transportation factoring services has made Foley a one-stop shop for new entrant motor carriers and established carriers alike. For additional information on BirdDog Solutions: 138 River Road, Suite 208 Andover, MA 01810 Telephone 1: 978.688.8400 Telephone 2: 800.464.3137 www.birddog.com info@birddog.com

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LeanLogistics is a global solutions provider of TMS applications and supply chain services enabled by one of the industrys largest transportation networks. The LeanLogistics network empowers shippers, carriers and other participating members to reduce costs, improve service and gain complete visibility. For additional information on LeanLogistics: 1351 S. Waverly Road Holland, MI 49423 Telephone: 616.738.6400 www.leanlogistics.com sales@leanlogistics.co m

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Syncada from Visa is a global financial supply chain network which corporations and governments can use to process invoices, make payments, and finance payables or receivables through sponsor financial institutions. Syncada processes invoices for hundreds of buyers and makes payments to tens of thousands of sellers in 42 countries. In 2009, the network processed more than USD $18 billion in payments and more than 200 million invoices and supporting trade documents. For more information about Syncada, visit www.syncada.com. For additional information on Syncada: 200 S 6th Street, Suite 2700 Minneapolis, MN 55402 Telephone: 800.404.2744 www.syncada.com info.requests@syncada.co m

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