Page 14 - 2018 Pancake Annual Report

FREIGHT MANAGEMENT

Persistent market pressures continued to
Pancake Co-op plague the freight sector as predicted in 2017.
11% Distribution of Freight Savings A strong economy, aging driver pool, and the
mandate of ELDs (Electronic Logging Devices)
10% ReD/ITI aggravated an already stressed market.
Trucks with available drivers were fully utilized
4% Shared Savings and ELDs decreased productivity for carriers.
75% 3PL RFP Robust freight volumes at the start of the year
finally peaked during the first week of June
setting unprecedented records for capacity
Frt Bracket Retarget utilization. Spot market rates followed suit
reaching another record in 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 $3.2M in
freight savings for the Pancake Co-op Members.

3PL RFP (Third Party Logistic)
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
$336k in freight savings to Pancake 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 Pancake Co-op Member business reached $340k.

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. IHOP restaurants received 1.2M cases through redistribution. These deliveries generated $2.4M in annual
savings at $2.02 per case.

Ihop Re-D Savings YOY
Measure 2018 2017 Increase
$ Savings $ 2,421,828 $ 1,821,262 33%
Cases Shipped 1,197,758 898,351 33%
$/Case $ 2.02 $ 2.03 -0.3%

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