28th Annual Quest for Quality: Held in high esteem

The editorial staff of Logistics Management (LM) is thrilled to offer the logistics and transportation community the results of the 28th Annual Quest for Quality Awards. This year, 111 providers of transportation and logistics services have received the ultimate vote of confidence, posting the highest scores across our lists of critical service criteria.

For nearly three decades, LM’s Quest for Quality has been regarded in the transportation and logistics industry as the most important measure of customer satisfaction and performance excellence. To determine the best of the best, LM readers rate carriers and third-party logistics (3PL) service providers strictly on the basis of service quality.

And, when you consider the operating environment in which carriers and 3PLs found themselves operating over the past 12 months, the editorial staff agrees that securing reader faith and walking away with a Quest for Quality Award in 2011 is nothing less than a monumental achievement.

The recovery from the Great Recession has proven to be more elusive and prolonged than any other in our history, and the slow growth presented another period of unprecedented challenges for carriers, services providers, and the shippers who put these companies to work—placing even more strain on the vital shipper/carrier relationship.

Although many industry observers are predicting strengthening for logistics services as we head through the second half of 2011, we’re finding that the pieces may not be falling into place as quickly as we thought to support anything more than weak growth. Much of this uncertainty is translating into increased volatility, sending shippers out in a search for capacity during sudden surges in demand—and carriers in search of a more sustainable revenue model.

And, when considering these mounting challenges, we’re happy to report that the following pages reveal listings of the carriers and 3PLs that shippers believe have been equal to the task. Quest for Quality winners are voted on by the readers of Logistics Management—the customers that put these carriers and providers to the test around the clock in countries throughout the world.

If fact, this year we had 4,575 logistics and supply chain decision makers place their vote. This six-month research undertaking results in eight lists that feature 111 transportation and logistics services provider organizations that have risen above the rest.

REACHING THE PINNACLE
But before we present the awards to the 2011 winners, let’s take a more detailed look at how we arrive at our list of recipients. One of the best things about the Quest for Quality is that it allows shippers to vote in the genre of services they actually use and fully understand; in turn, they can vote for the providers that they feel have best delivered on quality service in specific niches.

To determine who wins the vote, LM readers evaluate companies in all modes, choosing the top performers in categories including motor carriers, railroad and intermodal services, ocean carriers, airlines, freight forwarders, and third party/contract logistics services. From January through May of this year, LM and our Peerless Media Research Group surveyed readers who are qualified buyers of logistics and transportation services.

In order to be a “winner,” a company had to receive at least 5 percent of the category vote. The result of this overall effort is a crystal clear look at not only the overall winner in any given category, but a broad list of companies that finished well above the average.

HERE’S HOW WE DO IT
Transportation service providers are rated on LM’s five key criteria: On-time Performance, Value, Information Technology, Customer Service, and Equipment & Operations. Due to the nature of services offered by third-party players, a different set of criteria is used to judge this category.

Third-party logistics providers are rated on the following attributes: Carrier Selection & Negotiation, Order Fulfillment, Transportation & Distribution, Inventory Management, and Logistics Information Systems. The evaluation itself is a weighted metric. The scores take into account the importance readers attach to each attribute. Each year, readers are first asked to rank the attributes in each category on a five-point scale, with 5 representing the highest value and 1 representing the lowest value.

Our research team then uses those attributes’ rankings to create weighted scores in each category. For example, readers have historically placed the single highest value on On-time Performance—and they’ve done so again in 2011. If you look at the table on page 29, you’ll see that it was rated between 4.5 and 4.8 across the various carrier categories.

The second most critical attribute again this year was Value, followed by Customer Service. According to our 2011 findings, shippers are putting slightly more weight on Equipment & Operations than on Information Technology (IT). This may signal that more logistics operations are finding success with recently implemented transportation management systems (TMS) and related IT solutions.

After readers have ranked these key attributes in order of importance, they then grade each provider that they currently use on each of the five core Quest for Quality attributes, rating them on a scale of 1 to 3 (1=poor, 2=average, 3=outstanding).

To produce a weighted score, the research team then multiplies the provider’s average scores for each attribute by the attribute’s ranking. Next, the weighted scores are calculated for all five attributes for a given vendor and added together to create an aggregate number.

Companies score a quality win when their total scores exceed the average total weighted score in their category. But, remember, providers must receive a minimum number of reader responses to qualify for a win—at least 5 percent of the total base for the category.