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Swift Transportation

Swift Transportation. The Value of Research Barbara Kennedy May 11, 2007. Company History. Founded in 1966 with 1 truck in Phoenix, AZ Largest publicly traded truckload transportation company Approximately 17,477 tractors, 51,000 trailers and 20,000 drivers History of strong growth

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Swift Transportation

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  1. Swift Transportation The Value of Research Barbara Kennedy May 11, 2007

  2. Company History • Founded in 1966 with 1 truck in Phoenix, AZ • Largest publicly traded truckload transportation company • Approximately 17,477 tractors, 51,000 trailers and 20,000 drivers • History of strong growth • 22% CAGR in revenue since 1990 IPO • 20% CAGR in net earnings since IPO • Comprehensive North American service network • Organized regionally utilizing decentralized management structure • 33 major terminals in the US and Mexico • Recently announced expansion of Intermodal business with acquisition of 5,000 containers

  3. Nationwide Services • Dry Van • Refrigerated • Flat Bed • Heavy Haul • Dedicated • Intermodal • Container Major Swift Facility North American Regional Network Extensive network of service, fuel and repair centers enables the Company to develop personal relationships with customers and drivers

  4. Safety Research 1 Inspections & Citations

  5. Inspections & Citations • Source: American Transportation Research Institute (ATRI) • Predicting Truck Crash Involvement report • Identified behavior that increase likelihood of drivers being involved in accidents • Made the connection between: • driver behavior, traffic violations and roadside inspections • Increase in the likelihood of these drivers being involved in an accident

  6. Inspections & Citations • Data was critical in expansion of our policy • Example: A driver who receives an improper turn violation is 105% more likely to be involved in an accident in the future

  7. Research Outcome • Confirmed that past and present behavior is indicative of future behavior • Validated our beliefs and provided opportunities to prevent accidents • Information is shared company-wide • We now provide additional training to prevent the driver from becoming part of this statistic • Enhanced our Drivers’ Citations and Inspections policy and procedures • Implemented an enhanced software solution • Instituted remedial training A copy of the study may be obtained from ATRI at www.atri-online.org or by phone at (703) 838-1966.

  8. Safety Research 2 All Accidents by Driver Tenure

  9. All Accidents by Driver Tenure

  10. Research Outcome • Swift re-evaluated our training classes • We now use L3 truck simulators to change the trend • Today we have placed additional focused on lowering our accident frequency spike in our 1-2 year drivers through training

  11. Safety Research 3 Backing Accidents by Driver Tenure

  12. Backing Accidents by Driver Tenure

  13. Research Outcome • Created a specialized Close Quarters training program • Focused on backing and working in confined spaces • Tested this new program in one terminal for over 6 months • Backing accidents decreased by 20% compared with the remaining fleet • Training is now conducted nationwide at all facilities

  14. Safety Research 4 Roll-Stability System

  15. Roll-Stability System • Source: Internal • Two other carriers saw a minimum of a 50% reduction with the anti-rollover system • Projected reduction with anti-rollover system • 50% estimated reduction in overturn accidents would result in $3.9 million in savings • 50% estimated reduction in jackknife accidents would result in $1.2 million in savings • 50% projected reduction in towing costs would result in $723 thousand in savings • Outcome • Purchased the Anti-Rollover Device for all new trucks being delivered to Swift – June 2006 & forward • Currently have 2,800 units equipped with roll stability • Year end 2007 – 4,500 units will be equipped with roll stability

  16. Qualcomm Critical Event Recording

  17. Initial Notification

  18. View Specific Events

  19. Event Details

  20. Map View of Event

  21. Speed Graph of Event

  22. Success Story • We noticed 3 hard braking events within minutes of each other. Data revealed driver was out on a rural highway and would get up to highway speed and decelerate rapidly. He would then sit for a few minutes and accelerate away. Then the cycle would repeat. We found out the driver was having personal issues at home and was getting messages over the Qualcomm. When he would get the message he would slow down rapidly and read the messages. We were able to step in and get things clamed down so he could get the information he needed without having to drive like this.

  23. Success Story • We had a team that kept getting dynamic control events on the CER system seconds apart. We found that they were on a rural highway in Wyoming and the roads were covered with ice. They we struggling at 5mph for traction to get to a safe place to get off of the freeway and park. With this information we were able to warn other vehicles and keep them out of the area.

  24. Safety Research 5 Reducing Idle Time

  25. Fix a Few…Save a lot of Fuel Dollars 2.6 % of drivers responsible for 10% of the idle. $2,900,000

  26. Current use of Selected Idle Reduction Systems • Helped us understand & validate what we “knew” about our peers • All of the respondents using direct-fired heaters were either satisfied or very satisfied • 67% of respondents using auxiliary power units/generator sets or battery-powered air conditioners were either satisfied or very satisfied • Cast doubt on APU’s Information retrieved from ATRI. A copy of the study may be obtained from ATRI at www.atri-online.org or by phone at (703) 838-1966.

  27. Average Capital & Maintenance Costs of On-Board Idle Reduction Technologies • Validated our studies • Fuel savings was mentioned most often followed by less engine wear and less pollution as a benefit of idle reduction technologies • We agree plus Driver satisfaction is key Information retrieved from ATRI. A copy of the study may be obtained from ATRI at www.atri-online.org or by phone at (703) 838-1966.

  28. Likelihood of Purchasing Idle Reduction Technologies • 26% of respondents indicated being likely or very likely to purchase idle reduction technologies if the payback period was two years • 48% of respondents indicated being likely or very likely to purchase idle reduction technologies when incentives to offset half the purchase price were added to a two-year payback period • Confirmed our analysis so we went with direct-fired heaters combined with Automatic Engine Shutdown • Unit Specs in March 2006 with direct-fired heaters Information retrieved from ATRI. A copy of the study may be obtained from ATRI at www.atri-online.org or by phone at (703) 838-1966.

  29. Likely Use of Selected Idle Reduction Technologies • 40% of respondents with sleeper cabs indicated they are likely to use battery-powered air conditioners over the next 2 – 5 years • 28% of respondents with sleeper cabs are expected to use direct-fired heaters over the next 1 – 5 years • 28% of respondents with sleeper cabs are expected to be used over the next 1 – 4 years • Cast doubt on APUs Information retrieved from ATRI. A copy of the study may be obtained from ATRI at www.atri-online.org or by phone at (703) 838-1966.

  30. Pilot Program

  31. Safety Research 6 Tires

  32. Fleet Air Pressure – 2006 Well over 10,000 individual measurements were taken to prepare this data. Acceptable Swift Transportation Air Pressure is 110psi. Ideal average is 110psi. Trendline indicates we are right on track!

  33. Research Outcome • Source: Michelin performed a monthly check on 25 trailers & 10 tractors for two years • Study revealed a low pressure problem • We implemented a process that requires us to do an air check on the equipment every time we touch it for repair • This is significant improvement, we have 600,000 tires in our fleet • We saw significant improvement in the following areas: • Reduced on-road failures • Enhanced fuel economy

  34. The best way to ensure your business decisions are effective are to base them on fact / research.

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