We have been conducting our annual Shipper's Choice Awards Survey for one year short of a decade yet this may have been the hardest year to date for scoring the performance of the many carriers serving Canadian shippers.
The worst recession of the post war era left both shippers and carriers scrambling to survive but moving in different directions in doing so. For shippers, the focus was on cutting costs and taking advantage of the downward pressure on rates offered by the significant capacity overhang among most modes. For carriers the focus was on shedding equipment to balance capacity with the new and much lower demand for their services and to maintain some sort of price stability. The abandonment of long-term relationships in favor of price shopping was a frequent complaint among carriers last year. But it could be argued that for both shippers and carriers the focus was taken off customer service in the scramble to survive.
We also added to the difficulty of the survey this time by introducing one more key performance indicator for shippers to consider in rating their core transportation providers: the sustainability of their transportation practices. We did so after hearing conflicting comments in the market place for a few years now. Carriers were complaining that they were investing in green practices but shippers were not generally interested. Shippers were saying they were interested in green practices and were increasingly making them part of their selection process. By adding sustainable transportation as a KPI in our survey we will be able to document its true importance over time and in comparison to other KPIs in determining carrier selection.
Adding a KPI, of course, raised the total score a carrier had to achieve to reach our survey's Benchmark of Excellence. Needing to meet a higher benchmark during the most difficult year carriers have had to face in generations made cracking the list of Shipper's Choice Award winners the hardest it has ever been. How hard was it? For the first time, there were no winners at all in the rail category.
But despite all the challenges during the history of our survey there has been a core group of carriers across all modes who manage to successfully navigate that quality service at a competitive price tightrope, during good times and bad.
It is these carriers -42 in all this year --whom shippers have deemed worthy of surpassing the Benchmark of Excellence in our 9th Shipper's Choice Awards Survey, although as with past years some familiar names fell short of the mark while new ones make their first appearance. The research is our annual attempt to provide buyers of transportation services with consistent, national and scientifically derived benchmarks of excellence for carrier performance in each mode. Several more carriers were awarded honorable mention for coming within less than half a point of the benchmark of excellence.
Particularly impressive are the carriers who have scored above the benchmark of excellence for five years in a row to be awarded our special "Carrier of Choice" designation. To see these winners, turn to the final page of this report.
Our survey provides shippers, 3PL service providers and freight forwarders across Canada with the opportunity to set benchmarks for carrier performance on eight key performance indicators (KPIs) and to rate their top carriers against those benchmarks. Aside from identifying the best carriers across all modes through this process, survey respondents also provide clear indications of the different values Canadian buyers of transportation services place on each key performance indicator (KPI) based on mode as well as a comparison of how high these standards are set for each mode. (For example, transportation buyers set their highest standard on information technology for couriers while expecting ocean carriers to live up to the highest standard for competitive pricing -see table on the previous page.)
The importance survey participants place on the KPIs for each mode (based on a five-point scale) is used as a weight in calculating carrier evaluations. Survey participants then rate up to three of their main carriers in each mode (again on a five-point scale.) The final weighted score for each carrier is derived by multiplying the carrier's average performance score by the average importance rating for each key performance indicator for that mode.
Because survey participants are first asked to rate the importance they place on each of the eight KPIs when making their carrier selections, and that data is used as a weight on their carrier evaluations, we feel that the benchmarks set are truly standards of excellence. In other words, carrier performance is judged against an ideal of what shippers expect and the areas given the most weight are the ones that matter most to buyers of transportation services. As a result, of the hundreds of carriers rated in our survey, only a very few are deemed by participants'evaluations as providing a service so superior that it warrants a Shipper's Choice Award.
Carriers receive the Shipper's Choice Award when their total score meets or surpasses the total benchmark of excellence for their mode. Only those carriers who exceed this benchmark have their names and scores included in the following tables.
Average shipper satisfaction ratings for each KPI are shown in the table below by mode. The final column on the right shows the total benchmark of excellence set for each mode. The benchmarks for each of the eight KPIs per mode are indicated with each modal table on the following pages.
Invitations were sent to more than 6,000 of our readers who are buyers of transportation services in the manufacturing, retail and other sectors as well as to individuals responsible for managing shipments within the freight forwarding and 3PL sectors.
Carriers must receive a minimum number of evaluations in order to qualify for the award. It should be noted that this year winning was made all the more difficult because we once again raised the number of evaluations necessary to qualify for the award for almost every mode. In order to boost response, carriers were given the opportunity to forward the survey to their own customer lists. Not all carriers chose to do so, however. To prevent tampering, we check for multiple cases submitted by known respondents. If there is more than one case, then only the newest one is considered. Likewise, we check for similar IP addresses. As a final check on tampering, we separate and check the evaluations submitted by participants from our own e-mail list versus the e-mail lists of carrier customers. Winners must have evaluations submitted by transportation buyers from our own e-mail list to qualify for the award.
More than 1,800 buyers of transportation services participated in our survey, which makes Shipper's Choice the largest of the several surveys we conduct annually. We thank all those of you who took the time to complete our survey. (Participants receive an advance electronic copy of the results.) About 9,000 evaluations of carriers from all modes providing services in the Canadian market were cast.
As with past years, survey participants represent every region across Canada and buy transportation services for companies with annual sales ranging from less than $5 million up to more than $2 billion. Their annual supply chain budgets range from less than $100,000 up to more than $25 million. More than a third spend over 70% of their supply chain budgets on transportation.
The Shipper's Choice Awards Survey was undertaken once again in partnership with CITT and the Canadian Industrial Transportation Association (CITA), two associations whose members responsible for the purchase of transportation number in the thousands. And, as in previous years, the research was conducted by independent research firm G. Bramm & Associates (the same research firm that conducts our industry-leading Annual Survey of the Logistics Professional).
Winning carriers are listed alphabetically, and not by their total score. Those wanting to compare the scores among the winners should keep in mind the high probability that these carriers, although they are being compared to an industry benchmark, have been evaluated by different shippers. This survey is intended as a measure of which carriers exceed industry expectations and not a ranking of the carriers involved.