Page 14 - 2018 Apple Annual Report

FREIGHT MANAGEMENT

Persistent market pressures continued to plague
apple Co-op the freight sector as predicted in 2017. A strong
Distribution of Freight Savings
13% economy, aging driver pool, and the mandate of
ReD/ITI ELDs (Electronic Logging Devices) aggravated an
7% already stressed market. Trucks with available
Shared Savings drivers were fully utilized and ELDs decreased
productivity for carriers. Robust freight volumes
12% 58% at the start of the year finally peaked during the
3PL RFP
first week of June setting unprecedented records
for capacity utilization. Spot market rates
Frt Bracket Retarget
followed suit reaching another record during the
same month. In anticipation of market volatility,
CSCS continued to drive savings through four
main freight objectives focusing specifically on redistribution, (Re-D). By redirecting our efforts, the allocation
of freight savings shifted further towards Re-D, the objective we felt would produce the maximum savings in an
overstretched environment. As a result, CSCS achieved a total of $1.9MM in freight savings for the Apple Co-op
Members.

3PL RFP (Third Party LogisticS)
3PL partners and distributors are leveraged to substantiate supplier freight rates against current market conditions.
In 2018, CSCS either held or renegotiated new rates for some existing RFP lanes. The 3PL RFP program delivered
$320K in freight savings to Apple Co-op Members.

Revenue Sharing (Rebates)
Rebate programs allow freight revenue to be shared between the distributor and Co-op Members. CSCS and
distributors collaborate to expand the number of DC managed lanes and to increase overall freight revenue. In
2018, CSCS rebates for Apple Co-op Member business reached $222K.

Redistribution (Re-D)
Redistribution combines slow moving less than truckload (LTL) shipments from multiple suppliers into one Re-D
facility. This process enables consolidated full truckloads of product to ship to distributors while reducing freight
costs. Applebee’s restaurants received 818K cases through redistribution. These deliveries generated $1.1MM in
annual savings at $1.34 savings per case, outpacing 2017 by 27%.

Applebee's Re-D Savings YOY
Measure 2018 2017 Increase
$ Savings $ 1,099,704 $ 770,487 43%
Cases Shipped 818,069 729,119 12%
$/Case $ 1.34 $ 1.06 27%

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