# Presentation: 103229

## Perspectives from Freight Transportation Users US Department of Transportation – Federal Highway Administration

## Consumer Electronics – Overview 

- High Value commodities
- Profitability challenges due to price erosion, operating costs, and Customer requirements
- Small, Medium and Large boxes utilizes a multitude of shipping modes
- Highly competitive and growing in competition
- 5 years ago major Electronics vendors were:  Sony, Philips, Thompson (RCA), Zenith, Sharp, and Panasonic
- Today major Electronics vendors are: Sony, Philips, Thompson, Panasonic, Samsung, APEX, Audiovox, Sharp, and Sanyo.

## Consumer Electronics – Overview

- New Competitors in 2004: Dell, Gateway, and Virgin Companies launch new products in the CE sector.
- Forecasting, Order, and Shipping migration from Monthly Cycle to Weekly cycle
- Customer Requirements
- Radio Frequency Identity (RFID)
- Vendor Compliance

## Philips - Overview

- Philips Consumer Electronics balances Customer demand and requirements with 300 model variations to ensure timely delivery of our product.
- Product sizes vary from the size of a disposable razor to a 60” projection television.
- The customer mix ranges from small to large companies.
- 3  Outbound Distribution points in the US
- Greeneville, TN
- Roanoke, TX
- Riverside, CA
- Products are manufactured in Europe, Asia, and Mexico.

## Inbound shipments 
Port of Entry (Asia and Europe)
Moving product from Port to Warehouse
US/Mexico Boarder crossing
Third Party Logistics Provider involvement (3PL)

- Port of Entry (Asia and Europe)
- Moving product from Port to Warehouse
- US/Mexico Boarder crossing
- Third Party Logistics Provider involvement (3PL)

- Philips - Overview

## Philips – Overview Transportation

- Restructured the Supply Chain (3PL)
- Modes of Transportation
- Air (Next Day, 2nd Day, 3 Day)
- Ground (Parcel Ground ie. Fed Ex, UPS)
- Less Than Truckload (LTL)
- Truckload
- Intermodal (Rail)
- Transition from LTL and Ground (150lbs+ shipments)
- LTL Expedited service vs. Traditional “Air” service

## Philips – Overview Transportation

- Hours of Service – Challenge in 2004
- Multiple Stops (More than one customer on a trailer)
- Increased charges from Carriers for Detention and Multi-Stops
- Equipment Demand moves from Moderate to Severe
- Driver retention and expansion
- Will force more equipment on the road vs. less
- Capacity battle transforms to a capacity war
- LTL shipments will increase as will costs of operations (Carriers, Shipper, and Customers)
- 2001, 10% of all truckloads shipped by Philips were multi-stop shipments
- 2003, 46% were multi-stop shipments.

## “Being an attractive fish, in a Big fish pond”
Carrier relationships
Equipment utilization
Equal profitability
Automating Truckload “tender” process
Rail congestion 
Utilization can increase if transit time improved
Factory Direct
Customer’s Freight Forwarder
Mexico Direct

- Carrier relationships
- Equipment utilization
- Equal profitability
- Automating Truckload “tender” process
- Rail congestion
- Utilization can increase if transit time improved
- Factory Direct
- Customer’s Freight Forwarder
- Mexico Direct

- Philips – Improvement Opportunities

## Transportation Statistics

## Transportation Statistics

## Transportation Statistics

## Transportation Statistics

## Transportation Statistics

## Transportation StatisticsAverage Cubic feet utilized (Truckload volume)

## Slide 15