© 2014 FedEx

The SalesConnectionThe FedEx Custom Critical Sales Newsletter: 2014 Issue 3

Healthcare Council InitiativesPage 4

Page 2: The Sales Connection

The FedEx Custom Critical Sales Newsletter: 2014 Issue 3

Page 3: New Fleet Specialist Position

New UK Transit Procedures

Page 4: Healthcare Council Initiatives

Page 5: CSA Program Overview

Page 6: President’s Club Winners

A Soaring STEP Event

Page 7: Legal Corner

Page 8: Get to Know Me: Darin Ayers

The SalesConnection

Welcome,

In this edition, you will learn about a newly

created position to support the FedEx Custom

Critical fleet, CSA scores and Healthcare Council

key initiatives. You will also find out who won

the 2014 President’s Club and learn about new

procedures for shipments transiting through the

United Kingdom. On the back cover, you’ll be

able to find out a little more about Darin Ayers,

a National Account Manager.

We hope you enjoy this edition of The Sales

Connection. If there is a specific area that you

would like covered in upcoming editions,

please contact Julie Myers in Marketing at

julie.myers.osv@fedex.com.

Best regards,

Forrest Medley,

Managing Director, Sales

Page 3: The Sales Connection

New UK TransitProceduresLisa DeMali and Katherine Taylor, Air Expedite

Due to increased airsecurity regulations in

the United Kingdom, the Air Expedite team hasimplemented new procedures for all shipments that transit through the U.K.

Transiting through the U.K. is defined as a shipmentthat will move to the U.K., then uplift from the U.K. toanother destination. For example, all shipments movingto Ireland will transit through the U.K. and will beaffected by the new procedures.

These security regulations call for all shipments to bescreened prior to departure from the U.S. (IND/MEMhubs). Screening can be one of the following:

• X-Ray

• Opened and inspected

• Screened with security-trained dogs

This also includes all Envirotainers® and CSafe®

containers. Due to the size of the containers, thesewould typically be opened in a temperature-controlledlocation and searched by the security dogs, which couldcause possible excursions with the freight.

Thanks to the due diligence of Air Expedite Leadershipas well as the FedEx Security Team, we have identifiedexemptions that will allow us to move certaincontainers without the need to have the containersopened in-transit. This will apply to security screeningon shipments that fall under specific categories.

Containers eligible for the exemptions must beaccompanied by the appropriate documentation whichAir Expedite will provide the customer prior to shipmentdeparture. This document, known as the ConsignmentSecurity Declaration (CSD), must be completed by thecustomer, and two copies of this document must movewith the freight.

The Air Expedite team will include the requiredpaperwork and instructions with the TempTale packet, or it will be sent electronically if the customerprefers. Much of the FedEx Custom Critical sales force has customers who ship inbound to Ireland on a regular basis. We want to be proactive in our approach to ensure that you have the ability to providetimely and robust information to those customers who may be affected.

New Fleet Specialist Position

With a new pay plan that is based on a flat rate,mileage is vital, particularly loaded mileage. To helpensure contractors are offered maximum loaded miles,FedEx Custom Critical created a new position called thefleet specialist. This new role also will help increasefleet utlization.

The main duties of the fleet specialist are to offerincreased loaded miles, help keep owner operatorsmoving and serve as a main point of contact at thecompany. Each fleet specialist is assignedapproximately 50 vehicles.

Each day, the fleet specialists look over their assignedvehicles’ activity and loaded miles. They also look outfor situations in which vehicles are being sent to areas

that don't have a lot of outgoing freight. In thesesituations, they work to get the truck out of the areaand back into a better area for freight. Additionally,when owner operators need to head home formaintenance, holidays, events, etc., fleet specialists willwork with them to try to identify loaded mileage for thetrip home. However, it is always up to the owneroperator to choose which runs to accept and turn down.The fleet specialists do not pick loads for them.

Fleet specialists began working with Surface Expeditetractors on July 7. To start, this program is focused ontractors only (including percentage and flat rate payplans) and will eventually expand first to SurfaceExpedite straight trucks and then eventually to SurfaceExpedite cargo vans.

Page 4: The Sales Connection

Healthcare CouncilInitiativesRhonda Close, Human Resources

The healthcare market is a tremendousgrowth opportunity for FedEx Custom Critical and is theprimary driver of our Temp-Assure and TVAL business.In December 2013, we formed the Healthcare Councilto help drive our healthcare temp strategy forward.

The Healthcare Council consists of ELT members,managers and individual contributors from across the company and meets six to eight times per year. Neil Peirson and Jim Parkinson attend meetings on an as-needed basis to provide insight from the sales organization.

The primary purpose of the Healthcare Council is toidentify projects and other work efforts that align withour growth strategy.

The Healthcare Council will:

• Ensure we are working on the things that allow us to achieve our healthcare temp business objectives.

• Bring visibility to the strategy and to the required work.

• Bring focus and accountability to the work.

On the right are a few of the projects for the HealthcareCouncil and focus areas for FY15 :

Increase Temp-Trailer CapacityBy the end of January 2015, we will have 43 newtemp-control trailers ordered, manufactured, tested,delivered and ready for our use.

Conduct Healthcare-Temp ResearchA study is underway to better understand the needs ofcustomers shipping smaller temperature-controlledfreight (one to two pallets). We also will continue tobenchmark best practices for achieving zerotemperature excursions.

Promote Temp-ControlWe plan to aggressively promote our temp-controlofferings to current and prospective customers. This willinclude tactics such as speeches at events, healthcareshows, advertisements, press releases, emailcampaigns and more.

Provide Product KnowledgeThroughout the year, we will distribute materials suchas an updated Temp-Assure Services presentation,updated literature, a Temp-Assure question-and-answerreference sheet and other support materials to increaseproduct knowledge. We will also be conductingin-house Temp-Assure forums and providing webinars toshare information regarding specific product offerings.

Implement Ameriscan®

Ameriscan is the system that will automate temp-datareceipts and allow us to control the temperature-controlunit remotely.

If you have questions regarding the HealthcareCouncil, please contact Forrest Medley.

Page 5: The Sales Connection

CSA (Compliance, Safety& Accountability) ProgramOverviewKellie Toth, Safety

All commercial motor freight carriers, drivers, shippersand fleet owners are affected by CSA safety reportingand scores. FMCSA (Federal Motor Carrier SafetyAdministration) implemented the CSA program inDecember of 2010. The program includes seven BASICs (Behavior Analysis and Safety ImprovementCategories): Unsafe Driving (moving violations), Hours of Service, Driver Fitness, Controlled Substance& Alcohol, Vehicle Maintenance, Hazardous Materialsand Crash Indicator. Two of the BASIC scores arehidden from public view: Crash Indicator and Hazardous Materials.

The program uses the past 24 months of safetyperformance data to rank motor carriers against eachother which results in assigning a percentile score foreach BASIC. Safety performance data is accumulatedfrom two sources: roadside inspections and DOTreportable crashes. DOT-reportable crashes involve oneof the following: fatality, injury requiring immediatemedical attention from scene or a tow away due todisabling damage. States issuing the roadsideinspection or crash report submit the data to MCMIS(Motor Carrier Management Information System). Thedata is then formulated by the FMCSA into the CSAmethodology for scoring in each BASIC.

FMCSA has three categories for motor carriers:passenger carriers, hazardous material carriers andother carriers. Each category of motor carrier hasintervention thresholds. Exceeding the threshold canresult in intervention from the FMCSA, which can rangefrom warning letters, targeted roadside inspections,on-site investigations, cooperative safety plans andnotices of violations/fines.

FedEx Custom Critical is categorized as a hazardousmaterials carrier. The BASIC thresholds associated witha hazardous materials carrier are as follows:

• Unsafe Driving, Hours of Service and Crash Indicator = 60%

• Driver Fitness, Controlled Substance & Alcohol and Vehicle Maintenance = 75%

• Hazardous Materials = 80%

Each BASIC includes a list of violations which areassigned severity weights that range from one to 10points. The severity weight of the violation is thentime-weighted by multiplying it by three, two or one.New violations will receive the heaviest time weighting,multiplying the severity weight by three and as timepasses, the weighting decreases.

For example, a driver receives a roadside inspectionwith a violation for an improper lane change (violation,citation or warning are all viewed the same by CSA andreceive the same severity weight). The CSA programhas assigned a severity weight of five for an improperlane change violation. Time weighting is applied to theseverity weight. Time weighting, in association with age of the inspection, is noted below:

Violation age:

• 0-6 months—time weighted by 3=15 points

• 7-12 months—time weighted by 2=10 points

• 13-24 months—time weight by 1 = 5 points

CSA scores are updated monthly by the FMCSA, based upon the MCMIS download. The CSAmethodology will formulate a new monthly score byadding new violations, removing violations exceeding24 months and using existing data to create thepercentile ranking for viewing.

Motor carriers are able to challenge CSA data that iserroneously documented under their DOT numberthrough the FMCSA program DATAQs. Submitting aDATAQs challenge entails having the motor carrierresearch the violation or crash, formulate an appeal and provide supporting documentation based uponFMCSA regulations. Once the DATAQs challenge issubmitted, a designated officer from the state ofissuance will review and decide if the challenge will be accepted or denied. FedEx Custom Critical’s Safety department is very diligent in the review process of its CSA data to ensure only those violations or DOT-reportable crashes applicable to FedExCustom Critical are reflected under our DOT numberand are used to formulate the CSA scores.

President’s Club Winners

The President’s Club is a revenue-earning competitionamongst regional sales managers. The idea for the clubis a way to provide a little friendly competition and anincentive for high-achieving sales contractors.

To be in the President’s Club, you have to reach morethan 100 points by the end of the fiscal year, whichmeans you have exceeded your revenue plan for the year.

Winners are awarded with a plaque, business cardswith 2014 President’s Club winner distinction on themand a cash prize, the amount depending on the rank.The top five winners additionally receive a recognitionbanquet and President’s Club pins.

Congratulations to the following people, as they are the winners of the 2014 President’s Club:

• Lindsie Tighe Nashville 129.19• Chris Luneburg Allentown/Trenton 125.43• Tammy Robertson-Orr Southern California 124.51• Rich Granger Miami 116.82• Joe Marazza Cleveland 115.34• Mike Stucke Cincinnati/Dayton 112.59• Randy Bryant Indianapolis 112.27• Bruce Bowman Raleigh/Greensboro 110.93• Mike Ray Memphis 109.73• Susan Schreier Detroit 109.48• Tom Nehrkorn St. Louis 108.30• Veronica Meyer Charlotte 107.90• Ed Albrent Milwaukee/Green Bay 107.44• Charlie Moss Atlanta 105.96• Joe D’Ambrosio Newark 104.62• Fred Bloomingdale Syracuse 104.14• Jerry Bovard Chicago-West 102.89• Carol Digby Greenville/Columbia 102.21• Neil Peirson Boston 102.20• Patty Finn Chicago 100.22

A Soaring STEP Event

Regional Sales Manager Eric Huber had customerssoaring at a Strategically Targeted Entertainment Planevent in north Seattle in mid-July. He hosted sevencustomers and their spouses for a ride in the sky in10-person, de Havilland Otter floatplanes at SeattleSeaplanes tours. A seafood luncheon at McCormick &Schmick’s on Lake Union followed the flights. Rob Kingand Mike Moore attended from Custom Critical.

The customers in attendance included current andpotential high-revenue customers, and this event was a way to cultivate deeper relationships and customer loyalty.

“This was a unique and memorable event foreveryone who attended,” Huber said. “Everycustomer expressed their appreciation andthanks for the invitation.”

With the new Sales structure, STEP events willcontinue until January 1, 2015. If there are anyquestions regarding STEP events after January 1 or thenew structure in general, send an email tofccsales@corp.ds.fedex.com.

Page 6: The Sales Connection

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n

Legal CornerCandice Carlyon, Legal

The Enterprise Master: Captain Kirk’s Aliasor a Contracting Shortcut?Actually, neither (apologies to the Trekkies

among us). The Legal team is regularly asked whetherFedEx Custom Critical can “just use the Services Agree-ment” instead of going through its own contract reviewprocess. While FCC must review any contract that it signs,in some cases we do have the option to contract with oursister companies through an Enterprise Master Agreement (“Enterprise Master”).

Boldly Go Where No Contract Has Gone BeforeNot every agreement done by Services is an EnterpriseMaster. In my experience, many are not. The EnterpriseMaster is a special agreement used when a customerwants all of the FedEx opcos to contract in a single agreement. It is made up of a base agreement, which contains most of the business and general terms, andStatements of Work (SOWs) specific to each opco, whichdescribe the opco’s services and rates. It is important forthe Legal team to review the Services agreement to besure it is an Enterprise Master before committing to thecustomer that we will add on to an existing agreement.

Set Phasers to StunOnce we have identified that a customer does in fact have an Enterprise Master, we begin a two-step plan of attack: Review the base agreement and create an FCCSOW. If the base agreement is the standard version, significant editing is unlikely because the standard basewas created to reflect terms that all of the opcos canabide. Similarly, FCC has a standard SOW that can easilybe added to the standard base agreement. Of course, here on Earth that is rarely the case. Many base agreements are highly negotiated (especially those oflarger, marquee customers) and can be quite long (40-50pages before the SOW). We must review a negotiatedbase agreement to be sure FCC can comply with all of its terms. Any departures are reflected in the FCC SOW,

which is provided to the customer. The customer then will review and comment on the SOW, and on go the negotiations.

Resistance is FutileI can almost hear you saying “that sounds like even MORE of a process than with a regular FCC agreement.”Generally, it is. However, large customers rightfully insiston all opcos joining an Enterprise Master if they have one.What is much more difficult than adding FCC to an Enterprise Master is adding FCC to an existing Freightagreement. This is a common suggestion, but is not a practical solution—nor is it a smooth solution for the customer. Freight’s agreements are not written for the addition of another operating company and contain performance, liability and other terms meant for LTL, not expedited truckload. Further, any addition to a Freight contract would require the signature of a Freight or Services vice president, in addition to signatures by an FCC ELT member and the customer.

In summary:

• The Enterprise Master agreement was created specifically for multi-opco contracting

• Each Enterprise Master has two parts: base agreement and SOW

• FCC must review the base agreement and create its own SOW when it joins an Enterprise Master

• All Services agreements are NOT Enterprise Masters – Express/Ground and Freight also have separate agreements that are specific to their respective offerings

As always, please contact me or any member of the Legalteam if you have questions or want to talk through the bestway to contract with a customer. Until next time … LiveLong and Prosper!

Sales: Get to Know Me Darin Ayers, National Account Manager

Darin has worked at FedEx Custom Critical for nine yearsand in the transportation industry for a total of 18 years.Over his career, he has held positions at other companiessuch as senior account executive and sales manager, andhe is now a national account manager here at FCC. Let’sget to know Darin a little more.

Daily duties in Sales: Meeting with assigned nationalaccounts, selling our portfolio services, providing solutions to customer opportunities, traveling, monitoringaccount activity/profitability and engaging with sisteroperating companies.

Hometown: I grew up in Mardela Springs, Maryland, aone-stoplight town ... literally. I now live in Philadelphia.

Family: I am engaged to be married August 31. We hope to have a child andpossibly adopt later.

Favorite CustomCritical memory:ThePresident’s ClubMediterranean cruise.I really enjoyedvacationing andhanging out withVirginia, Forrest, BobRocchio, Bill Davies and CharlieMoss. Also, my dateturned out to be my fiancée!

Favorite pet: AGerman shepherdrescue dog named Sandy.

Favorite traveldestination: TheMediterranean.

Interesting piece oftrivia about yourself: As an early teenager, I lovedskateboarding and actually had a 10-foot-high, 12-foot-widehalf-pipe ramp in my backyard. When I was 15 I got to skatewith a very young Tony Hawk. Recently, I got back to myroots by discovering longboard skateboarding, which is a lotof fun and great exercise.

Favorite thing about your hometown: Maryland Blue Crabs.

Least favorite thing about your hometown:Working on a chicken farm.

Hobbies: For four years, I served as the vice president and now I currently sit on the board of the Salute MilitaryGolf Association, an organization that provides golfopportunities to post-9/11 wounded war veterans throughlessons, golf trips and custom TaylorMade equipment. I alsoenjoy off-roading in my Wrangler, playing third base in asoftball league, golfing, auto club track racing, shooting and duck hunting.

A job you held as a teenager: I had a job in sales at a localsurf/skate shop. At age 14 I sold hundreds of skateboards!

The superpower you would want: I would love to be ableto read the minds of animals. I love animals, and I think theirthoughts would be fascinating.

Favorite Halloween costume: Indiana Jones.

Favorite sports team: Washington Redskins andWashington Nationals.

Funniest Custom Critical memory: Making sales callswith Forrest in Kansas during a major snow storm. It’s funnynow, but at the time I thought we were going to die. I haveto say Forrest is very talented at driving in bad weather.

A chore you absolutely hate doing: Opening the mail—it’salways bills or junk. I wish everything was paperless!

Favorite food and drink: Southern California fish tacos and Sprite.

Favorite aspect of FCC: I love the atmosphere ofcomraderie and the “esprit de corps” here. It feels like anextended family. The team atmosphere is amazing. And,FCC leadership truly cares about their employees.

Favorite thing to do on the weekend: I like to spend timewith my fiancée, exercise, go out to eat and watch Apple TV.

Favorite movies: The Big Lebowski, Step Brothers, Saving Private Ryan.

Favorite restaurant: Shere-E-Punjab, an Indian restaurantin Philadelphia.

When I grow up I want to be a … : Formula One Driver.

Thank YouThanks to the following people who contributed to this edition of The Sales Connection: Kellie Toth, Rhonda Close, Lisa DeMali, Katherine Taylor, Candice Carlyon and Darin Ayers.

The Sales Connection is published bimonthly for the field sales organization of FedEx Custom Critical. Please send suggestions to Ryan Henary or Dave Hill in Marketing. WhiteGlove Services, Air Expedite, Temp-Assure and Customer Link are registered trademarks of FedEx Custom Critical, Inc. FedEx Custom Critical is proud to be an equal opportunityemployer.

©2014 FedEx Custom Critical, Inc. No portion of this newsletter may be copied, distributed or reproduced without written permission of FedEx Custom Critical, Inc.