For all those who missed an exciting LogiChem 2017, here is some "food for thought" how digitalization is offering an opportunity for smarter matching of supply and demand in cargo transportation, provided it is done with the right governance and business rules which are to the benefit of both the shipper of goods and their transport service providers.

1. covestro.com
Platform
(R)evolution
The emergence of platforms
in the transport industry:
Opportunity or threat?
Frank Andreesen, VP Logistics Operations +
Transport & Distribution Safety EMEA
LogiChem, March 30th, 2017

2. Preamble
The unstoppable rise of platforms?
2 │ Platform (R)evolution LogiChem 2017
The world’s largest taxi firm, Uber, owns no cars. The world’s most popular
media company, Facebook, creates no content. The world’s most valuable
retailer, Alibaba, carries no stock. And the world’s largest accommodation
provider, Airbnb, owns no property. Something big is going on.
Source: http://www.independent.co.uk/news/business/comment/hamish-mcrae/facebook-airbnb-uber-and-the-
unstoppable-rise-of-the-content-non-generators-10227207.html

3. The starting ground
Background and purpose of this presentation
• In an increasingly digitalized world, more and more markets are being
transformed and disrupted by fast growing non-asset based platforms such
as Airbnb has re-invented the hotel industry or Alibaba has risen to become
a global trading platforms, competing head-on with eBay
• Platforms such as DriveNow and UBER are serving as examples how to
improve asset utilization in (people) transportation
• With the arrival of platforms in the freight transport industry, shippers and
carriers need to ask themselves whether and how to make best use of these
platforms
• A central question to deal with is also the potential impact of platforms on
strategic partnerships
3 │ Platform (R)evolution LogiChem 2017

4. Agenda
1 The emergence of platforms in the transport industry
2 How platforms can add value (potential opportunities)
5 Outlook – key questions to determine path forward
4 Carrier voices (food for thought)
4 │ Platform (R)evolution LogiChem 2017
3 Possible “side effects” of platforms (potential threats)

5. Soft launch of UBER Freight
UBER is entering into the B2B freight transport market
The UBER Freight marketplace will offer
shippers real-time pricing of what it will cost
to move their goods based on supply and
demand.
While a dynamic pricing model might mean a
higher or lower price than a contract freight
deal, in the long run this is likely to lead to
lower total costs to serve
UBER thinks about the future in two ways:
marketplace and automation. And that will be
applied on the consumer and on the freight
side."
Source: BUSINESS INSIDER Deutschland
5 │ Platform (R)evolution LogiChem 2017

6. UBERization of transport
Consulting companies’ views
UBER-like platforms in logistics
demonstrate that a new era in
logistics is becoming reality.
Competitive, real-time pricing and
market transparency provides the
next level of efficiency savings
through new ways to link supply
and demand.
Source: Accenture
At least a dozen companies are in the hunt to develop and promote “smart trucking”
apps: fast, automated load matching based on equipment location and algorithm-
based instant pricing. Such UBER-style apps are looking to displace closed,
fragmented and more time-consuming legacy systems. Traditional forwarders will
need to embrace “UBERization” as well – or risk being displaced entirely.
Source: Oliver Wyman
6 │ Platform (R)evolution LogiChem 2017

7. • A platform is a business based on enabling
value-creating interactions between external
producers and consumers without owning
assets
• The platform provides an open, participative
infrastructure for these interactions and sets
governance conditions for them
• A platforms purpose is to optimally match
supply and demand, facilitating the exchange
of goods or services, while enabling value
creation for all participants
Prime characteristics of platforms
Definition and purpose
7 │ Platform (R)evolution LogiChem 2017
Source: Platform Revolution, Parker,
Van Alstyne, Choudary, 2016
What does this mean for our B2B environment:
is this just a “tech-bubble” or permanent change
of business model?

8. • Platforms provide smart system interfaces to realize superior matching of
supply and demand, leading with less coordination effort to a better
economic performance
• Today’s platforms, empowered by digital technology, connect producers and
consumers real-time, faster and easier than ever before
How platforms can add value
Potential opportunities
8 │ Platform (R)evolution LogiChem 2017
Potential value for shippers:
• Better (real-time) connectivity
to carrier base
• Optimal supply and demand
matching even at volatility
• More competitive freight costs
(closer to market)
Potential value for carriers:
• Increased visibility of available
loads > opportunity to reduce
empty running
• Increased process efficiency >
lower transaction costs
• Improved network and asset
utilization > higher margins
+

9. • Platforms can disrupt conventional asset based businesses by establishing
new channels to market without owning any assets
• Platforms can potentially replace conventional freight forwarders, offering
superior easier direct access to a broader market
• Platforms can lead to too much focus on price, resulting from a carrier’s
perspective in opportunistic customer behavior and an erosion of margins
• Platforms may not have sufficient control over the quality of the goods or
services provided
• Platforms do not come for free and are only sustainable if the charges they
raise are our outweighed by the added value created.
Possible “side effects” of platforms
Potential threats
9 │ Platform (R)evolution LogiChem 2017
-

10. Carrier voices
UBERization of transport: opportunity or threat?
10 │ Platform (R)evolution LogiChem 2017
PROs CONs
• The shift towards a dynamic
transport management model can
lead to a focus merely on costs
(rates) while leaving strategic
partnerships behind. We see our
existence in this segment at stake.
• Dynamic transport operations
models reduce our “security of
demand” and are therefore
contradicting investment plans
• …
• A dynamic transport management
approach gives us the ability to
“right-size” our business
• A dynamic TM approach can
reduce our risk giving carriers the
possibility to say “no” to transport
orders, which do not fit
• A platform gives us access to loads
and lanes, we were not able to win
in a strategic tender (operational
filling of “empty capacity”)
• …
+ -

11. The path forward
Questions to be answered by shippers
11 │ Platform (R)evolution LogiChem 2017
• So is this just a tech-bubble or would such a platform add value to specific
segments of your transport network?
• How representative is your historic data based transport demand estimation
for your current future transport demand? And what are the implications for
carrier pricing?
• Is your supply and demand matching (and pricing) “static” or do you already
benefit from shorter-term “dynamic” matching opportunities
• How open or closed would you want to define your carrier portfolio,
accessed via such platform?
• Are there any additional visibility functionalities you could benefit from,
such as real-time based time slot management or operational alerting
functions?
• …

12. The path forward
Questions to be answered by carriers
12 │ Platform (R)evolution LogiChem 2017
• Under which conditions could a platform lead for you to better asset and
network utilization and improved margins?
• What would you require from your customers to still enjoy security of
demand to provide a more solid basis for your investment planning?
• Is my organization ready to take advantage of real-time based better
utilization opportunities (e.g. can transport planners take pricing decisions?)
• Is the interaction and collaboration with my customer possibly as high and
possibly even higher than in the conventional business model?
• What benefits does a platform yield for me in terms of process efficiency
improvements?
• …

13. covestro.com
Thank you
for your attention!
Please save your questions for the panel
discussion