TRB – SHRP2 SYMPOSIUM Innovations in Freight Demand Modeling and Data Improvement

1. October 21-22, 2013 TRB – SHRP2 SYMPOSIUMInnovations in Freight Demand Modeling and Data Improvement

2. Hyster-Yale Snapshot • Hyster-Yale Materials Handling, Inc. (NYSE:HY) • NACCO Materials Handling Group, Inc. is an operating unit of HY • Leading global designer, manufacturer and marketer of lift trucks and provider of aftermarket parts and support • Build to order OEM • Headquartered in Cleveland, Ohio • Over 5,300 employees in 13 countries • FY 2012 Revenue – $2.5 billion • FY 2012 Net Income - $98.0 million

3. Hyster-Yale Overview • Leading global lift truck brands in terms of units sold • #3 globally in 2011 (2012 data not yet available) • Large installed base that drives parts sales • Over 798,000 units worldwide • Sales of more than 76,900 units in 2012 • Sales of more than 3,800 units at SN JV in Japan in 2012 • Diverse customer and application base • Global independent dealer network • Comprehensive, updated global product line • Globally integrated operations with economies of scale • Experienced management team Key Highlights Global Footprint Mission Statement: Be a leading globally integrated designer, manufacturer and marketer of a complete range of high quality, application-tailored lift trucks, offering the lowest cost of ownership, outstanding parts and service support and the best overall value.

4. Comprehensive Product Line

5. Challenges to Today’s Manufacturing Logistics Network • Globalization • Suppliers and Customers • Carriers and Service Providers • Planning for an Extended Supply Chain • Security • Regulation • Driver Hours of Service Reductions • Importer Security Filing (ISF, aka “10 + 2”) • Hazardous Material • Inventory Reduction • Vendor Managed Inventory • Forward Stocking • Replace Inventory with Information! • Customer Service • Increase in Competitive Pressures • Right Product/Right Time/Right Place/ • Right Condition/Right Price • Customers Demand More

6. Inbound Transportation Modeling – Current State • Utilize historical data sets • Freight bill payment files • Carrier shipment level detail reports • Identify trends within a rolling 6-month period of time • Origin & destination combinations • Shipment frequency • Weights, volumes, piece counts • Work with carriers & suppliers to validate feasibility • Does the supplier have room to hold material? • Can the carrier meet the required service expectation? • Primary goal is to move from small, expensive shipments that are unplanned to cost effective shipments that are scheduled for delivery.

7. Inbound Transportation Modeling – Current State Benefits & Limitations • Benefits: • Regular shipping schedule for suppliers. Same day of the week, same carrier, in some cases… even the same driver. • Stability within planning system. Parts will arrive same time every week. • Leveling of workload at manufacturing receiving docks. We can adjust delivery plans to fit slower activity times. • Transportation cost reduction. • Limitations: • Slow to recognize changes. Working with historical data requires 3 months worth of transactions in order to determine trend vs. anomaly. • Decisions are not shipment specific, instead they are based on the overall activity level during a period of time. • No consideration of future changes to SC network. In a sense, it is looking in the review mirror to see where you are going.

8. Inbound Transportation Modeling – Current State Example Historical Data Analysis Opportunity Identification Shipment #1 = 5,000 lbs., 3 pallets, Monday Shipment #2 = 7,000 lbs., 2 pallets, Wednesday Shipment #3 = 4,000 lbs., 4 pallets, Thursday Shipment Consolidation Single shipment of 16,000 lbs. Picked up from supplier every Wednesday. Delivered to manufacturer every Thursday. Supplier & Carrier Collaboration Determine if carrier has capacity. Confirm supplier has space to hold freight. Select the optimal loading day and time. Set service expectations.

9. Inbound Transportation Modeling – Future State • Utilize open PO file • Work with future requirements vs. historical performance. • Planning resources have ability to see the shipment detail prior to carrier pick-up. • Identify optimization opportunities based on real-time data feeds • Primary goal is “optimization” • Shipment Method = Need • No longer saving transportation cost at the expense of inventory. • No longer reducing inventory at the expense of transportation cost. • Right parts delivered at the right time at the right cost.

10. Inbound Transportation Modeling – Future State Benefits & Limitations • Benefits: • Improved visibility throughout supply chain • Stability within planning system • Leveling of workload at manufacturing receiving docks • Appropriate levels of inventory • Transportation cost reduction • Avoidance of premium modes of transport (air, team drivers) • Limitations: • IT investment • Communication channels must be efficient • Requires implementation of software solutions

11. Outbound Transportation Modeling • Multi-Stop Truckload • Must Meet Customer Need • Efficient Route Design • Minimize stops in order to reduce chance for delays. • Avoid congested metropolitan areas for first delivery. • Group deliveries by region. • Limit “out-of-route” miles. Design should be as close to Point A to Point B as possible (even if there are Points C & D) • Operationally Practical • Total load weight should range between 38,000 and 44,000 lbs. • Majority of load weight should deliver to final destination. • Proper product mix in the trailer.

12. Measuring Outbound Load Efficiency • “Perfect” Load Score (In-Route Mileage %) X (Total Weight %) X (Final Stop % of Total Weight) = Load Efficiency Actual Miles: 2,609 Direct Miles: 2,598 Out of Route: 11 (.4%) In-Route Mileage % 99.6% Total Weight: 40,238 lbs. Avail. Weight: 44,000 lbs. Under Utilization: 3,762 (8.5%) Total Weight % 91.5% Final Stop Weight: 38,958 lbs. Total Weight: 40,238 lbs. Under Utilization: 1,280 (3.2%) Final Stop Weight % 96.8% X X = 88.2%

13. Transportation Modeling – Key Considerations • Is it cost effective? • Does it meet desired service requirement? • How do we mitigate risk? • Are there implementation costs? • Can it be managed? • How will it be measured? • Are there intangible benefits?

14. Transportation Modeling – Assumptions • Road & Highway Infrastructure • Support 500 miles per day • Minimize delays when operating outside of interstate system • Port Facilities and Access • Quick vessel turnarounds • Containers off port within 24 – 48 hours • Effective rail interfaces

15. Transportation Modeling – Future • What can be done to mitigate the impact of regulatory limitations on drivers’ hours of service? • How do we make the use of intermodal services a more viable option? • How will larger container vessels calling US east coast ports impact current infrastructure? • Is it possible to offset energy costs with more efficient transportation networks? • Continued move away from Point A to Point B shipments.

16. Transportation Modeling – Questions? Thank You! Andy Street, MS, CSCP Order Fulfillment & Logistics Manager NACCO Materials Handling Group, Inc. andy.street@nmhg.com (252) 412-3110