BLEED BLUE

201 National Freight Inc Advancing the NFI Culture priority to implement the new direction, including training for the trainers themselves and working sessions to generate engagement with the new mission, vision, and values. Company newsletters communicated and highlighted the new identity and direction, while employee badges displayed the new mission. At each leadership meeting, each executive had to share a story about how someone was “living the values” in his or her professional life. A recruiting team was built up, and new HR software was purchased and implemented, a human capital management system. At all levels, NFI team members were guided on what they should stop doing, start doing, and continue doing as they had been. Employee feedback was crucial in developing all the new policies and processes. “We didn’t want to just speak the words and give them an NFI t-shirt,” Nancy says. “All of this took a lot of time and a huge cost, even taking people away from their office duties. But everyone saw we were serious. Management was on board to execute this plan, and this generated the motivation internally and from the field. The culture soon changed due to the leadership walking the talk.” The changes were felt throughout the organization, and it showed in the numbers—a key one being driver turnover, which fell dramatically from 100 percent in 2006 to just 30 percent in 2015, less than ten years later. “When I started working it was hard to get people to come to NFI,” Nancy recalls. “It had a bad reputation in some ways. Churn and burn. Now it is a top desired employer in the Philadelphia area in the logistics business. People are endeared to this company because the brothers are so passionate.”

202 Advancing the NFI Culture National Freight Inc BLEEDING BLUE Human Resources at NFI continued to grow, investing in people in all sorts of ways. A major strategy has been to match people’s skills to the most ideally-suited job—to place the right people in the right seats, from senior management on down. “We’ve also sought out people who are opportunistic, not risk averse, which is counter-culture to the trucking industry,” Jeff Brown says. “We allow people to take risk and change their career path, and people like that they have a chance to have new opportunities, a new mindset.” During the evolution of NFI’s culture, it became clear that the company needed to get more sophisticated. To govern more effectively and efficiently. And it worked. The results bear this out: YEAR REVENUE 2006 $500M 2015 $1.2B

203 National Freight Inc Advancing the NFI Culture

205 National Freight Inc Making the Eagle Soar: 2007–2010 CHAPTER 28 Making the Eagle Soar: 2007−2010 CONTRACT MANUFACTURING I n 2007, NFI purchased Quick Pak, a contract packaging and decorating company. This allowed for another key service to be offered to customers—promotional packaging design, sourcing, and custom assembly fulfillment. This was a very positive development for NFI, and all was apparently going well. 2007–2008: AN ECONOMY IN TURMOIL But only a few years after the economy seemed to have stabilized, the financial crisis of 2007–2008 occurred, which some economists consider the worst financial crisis in the US since the Great Depression of the 1930s. “The bottom fell out in 2008,” says Larry Godwin. “Four hundred trucking companies went out of business in 2008 alone. The economic bubble burst, and so did the transportation industry. With the economy shrinking, so did the pricing of our routes.” “Our competitors were failing,” Paul Nolf recalls. “But in 2008, when the economy took a nose-dive, NFI was still standing. We knew we would win more business on the upturn.” Sid remained optimistic; he told employees, “We have a very strong balance sheet that gives us the financial strength to make it through these times.” Still, the situation as a whole was grim. Many companies folded or merged with other companies. The majority of the private companies in trucking and warehousing were

206 Making the Eagle Soar: 2007–2010 National Freight Inc doesn’t work.’” On the other hand, with Dedicated Transportation, business is more predictable and more profitable; plus, drivers can spend more time at home, which means it’s easier to recruit to fill the cabs. “There is always a core group of drivers who enjoy OTR,” says Joe Roeder, former president of Dedicated Transportation, “but as the driving age increases, fewer drivers want to do this. We were one of the first to get out of OTR. This has become a trend in the industry.” The company leaders were sensitive to the historical legacy of OTR, and many felt that having an OTR division was necessary and that customers wanted a company that could do both. But they knew that with dedicated routes they were being paid for every trip and the work was reliable and profitable, day in and day out. Between OTR and dedicated, there was really no comparison. Along with the shift from the OTR legacy model to Dedicated Transportation, NFIL was now folded into NFI Logistics, and Joe Roeder took over leadership. The OTR, transactional business was moved, where possible, to Dedicated Transportation, and NFIL offered total supply chain solutions. At first, after shifting resources from OTR to Dedicated Transportation, a regional fleet was operated to support key customers. The Browns found they could not make money at that because of one-way rates without backhaul. Then, the focus was back to a dedicated fleet. NFIL remained a strong and viable component of the business. With the economic downturn, the 3PL market was hit, but not as hard as many others. “Even in down economies, food consumption doesn’t change much,” says T. J. Lynch, senior vice president of finance and marketing. “We were recession durable and resistant to downturns.” Still, 2008 in particular was a hard year for NFI, as it was for the nation at large: fuel prices quickly rising and falling, sold to larger public companies or private equity. In these rough economic waters, the leadership at NFI was forced to take a long, hard look at what was profitable and what was not. The time had come to more radically shift away from Over-the-Road and toward Dedicated Transportation. Sid had begun reducing the focus on OTR in 2006, and over the next few years it shrank by 40 percent, but in 2007 there were still 1,200 trucks in OTR. In 2008, Steve Grabell arrived as CFO, and he quickly took steps to improve efficiency: he froze pay, made minor cuts in staff where it was wholly justified, cut back on capital investment, and implemented cost cutting from a macro perspective. Although salaries were temporarily frozen, no layoffs were implemented as a cost-saving measure. Still, there was an extreme focus on costs and being careful stewards of NFI’s resources. The NFI leaders took a holistic view of the company, evaluating which elements were enhancing the business and which were a drain on those resources. OTR, as transactional business, has short lead times, seasonal work, and few opportunities for backhaul, meaning it is hard to keep all assets active, and trailers have to run empty or wait for a load. OTR drivers were difficult to hire and retain, wanting regular routes, and there was no compensation for empty miles. “Over the Road was unpredictable and had poor margins,” mentions Ike Brown. “We weren’t efficient enough to play in the space. Our competition was eating us up.” At this time, about half the business came from OTR and about half from Dedicated Transportation. The turnover for drivers in OTR was well over 100 percent, but it was only 30 percent in Dedicated Transportation. “Sid would talk about this leading up to the decision,” remembers Carl Brock. “He would say, ‘This segment of the business is changing for the entire industry. This model

207 National Freight Inc Making the Eagle Soar: 2007–2010 massive drops in home prices, the financial market collapse, companies filing bankruptcy or going out of business, and the stock market plummeting. Noting these factors, Sid stated at the time, “We have seen some or all of these events have a direct effect on our customers, our company, and ourselves. This year challenged our people and resources and made us rethink and revise many of our company practices.” While other companies suffered massive layoffs or even shut down, NFI held strong; NFI expanded its sales force and aggressively sought to spread its message in order to keep the pipeline full of opportunities and replace the reduced volume of business from customers. These sales efforts brought in major new accounts, such as Dr. Pepper Snapple Group, Hanesbrands Inc., and Lockheed Martin. “Even during this recessionary time, NFI flourished,” Ike says. “Maybe our people worked a little harder, hunkered down, saw it coming, and were able to prepare.” The Browns continued to invest in the business, which showed their commitment to employees and reflected the stability of the company’s balance sheet. The company integrated high tech systems into their clients’ systems. For instance, NFI began to offer new Supply Chain Consulting services for both new and existing clients, which utilized advanced software to provide solutions to a wide range of supply chain modeling and optimization problems. These and other tools were built into the company’s infrastructure with the goal of handling customization for customers rather than fitting them into predefined solutions. Trucking companies are going to have to fundamentally rethink their business models, and that’s going on right now.

208 Making the Eagle Soar: 2007–2010 National Freight Inc Even within a challenging financial climate, NFI’s commitment to safety and environmental responsibility remained unwavering. The company continued to refresh its fleet with the purchase of new tractors and trailers, and technology investments bolstered NFI’s safety initiatives. A driver simulator was purchased for training and it was utilized for new and remedial driver training and reviews after incidents on the road. The company also purchased a bus and outfitted it with a classroom to be used at trade shows, conventions, safety meetings, and when traveling to startup operations around the country in order to serve remote locations. The Browns continued supporting the people of NFI because they know that they are the heartbeat of the company. As Ike Brown said, “When the economy does start to pick up, we want to be on the winning side of it and be ready to take on all the business that I know will be coming our way. And it takes an entire company to make that happen.” In 2008, the first official class started at NFI University, a training center for all employees in Voorhees, New Jersey. This reflected the Brown brothers’ firm belief that the people of NFI are worth investing in, and that the future of the company would be bright, whatever the economy might be going through. “You have often heard me say ‘the whole is greater than the sum of the parts,’ and it is never more relevant than now,” Sid wrote. Going into 2009, the Browns knew they would continue to be challenged by the slow economy. Their customers were going to be pressured to decrease costs. This would have NFI searching for ways to further streamline and refine their businesses and bring efficiencies to their customers. It was also time for a new brand, along with a new sense of unity and identity. 2009: A FRESH START I n 2009, after seventy-seven years in the business, NFI put all of its divisions under its corporate brand. Over the previous few years, NFI had created new divisions to meet the evolving needs of its customers, including a Brokerage division that matched the transportation needs of distributors with available carriers nationwide, NFI Global to address the international needs of its customers, and NFI Consulting, which provided expertise to a variety of clients. The other divisions joining these three under the corporate brand in 2009 were NFI Logistics, NFI Warehousing and Distribution, NFI Transportation, NFI Intermodal, NFI Real Estate, NFI Contract Packaging, NFI Canada, and the brand-new NFI Solar. Rather than being a House of Brands—a collection of various entities collaborating with each other—NFI would be a Branded House, a diverse but cohesive company unified under one banner. This change would help solidify a united identity for the company, even as multiple significant businesses would continue to drive the singular NFI brand. The new brand and positioning was publicly launched via an advertising, web, and public relations campaign throughout 2009. The roll-out of the new logo and brand campaign was carefully timed in celebration of and coordination with National Transportation Month, which takes place annually in May. “Our new brand identity is intended to address the fact that our history and success as a trucking company often obscures the full range and diversity of NFI’s services,” said Ike Brown. “The excellence we bring to our transportation division extends across all aspects of the supply chain: distribution, warehousing, packaging, logistics, intermodal, and real estate. NFI is a one-stop resource for integrated supply chain solutions, and our new brand exemplifies that fact.” For many years, the company leaders had used “NFI” to refer to the company and its various parts within internal

209 National Freight Inc Making the Eagle Soar: 2007–2010 communications and during discussions with various clients and partners, so when the time came to unite the company under a single brand and a single name, using “NFI” was a natural fit and a smooth transition for everyone. NFI’s new brand was featured in trade publication advertisements and on its tractors, trailers, and distribution and terminal facilities. The company also launched a newly enhanced website to coincide with the new brand roll-out, and this site saw 124,000 visitors in the first five months alone. “We started to view the company as a single company,” recalls Larry Godwin, former VP Sales, Southeast. “So we positioned a vertically integrated company to customers. We combined services, so the sales teams could reach out to other customers they didn’t have relationships with to cross sell.” “We continue to invest in the business,” Sid said in 2009. “It shows our commitment to our employees and reflects the stability of our balance sheet. We are in the midst of purchasing approximately 300 new tractors and 750 new trailers—and all of them will carry our new logo. We can take pride in the fact that we run one of the most environmentally friendly and fuel efficient fleets in the nation. It’s still a tough economic environment out there, but NFI is surviving and it’s a true testament to everyone in this company. By tightening our belts and working harder and smarter, we have managed to replace lost business with large wins and keep existing customers through excellent customer service.” The revitalization of the company was also spurred on by new innovations. In 2009, Jordan Brown, a fourth generation Brown family member, led the creation of NFI Solar, a business devoted to generating clean, renewable solar energy and making warehouses sustainable. Its first project was to develop a solar roof on the NFI Cherry Hill Headquarters that generated enough energy to power the entire building, and other properties would soon follow. As the only logistics company to own a solar business, NFI created quite a buzz in the industry. That same year, NFI hired its five thousandth employee. The company was going strong.

210 Making the Eagle Soar: 2007–2010 National Freight Inc 2010: ROUNDING OUT THE DECADE I n 2010, the Browns decided the time had come to merge NFIL and NFI Dedicated into NFI Transportation. Now these two groups had to begin working together. At first everyone got realigned, and the restructuring caused a number of problems due to cross-functional hierarchies being misaligned, but eventually the structure was sorted out—and it soon became clear that the decision was a sound one. At last, there was no more competition between these groups for business, which had been a thorn in both groups’ sides for years. “Everyone had been selling the same thing,” recalls Bill Mahoney, senior vice president of sales. “You would have two NFI salespeople calling on the same customers, which created a lot of confusion in the marketplace. A customer would see John on Monday, Carl on Tuesday, and now you on Wednesday. From a business perspective, it was fatal.” Along with the move to combine these two dedicated transport groups, the Browns decided it was also time to eliminate OTR. “OTR was a feast and famine business,” says Rob Barron. “It was struggling, declining, and losing money. It was bleeding red. Dedicated was making money and growing.” When OTR was shut down, the assets were redistributed, and the OTR drivers became part of Dedicated. Joe Roeder recalls, “The sales team was told, ‘These are now your assets, and we want you to get customers with backhaul in regions to find work for these drivers.’” Everyone’s efforts paid off; after going all dedicated, they saw rapid, 15-20 percent growth during this period. “Every year after 2008 the business continued to do better, year over year,” says Steve Grabell, CFO. Adaptability and superior performance can be found across NFI, but these qualities are aptly demonstrated by NFI Tractor 151110, a tough, well-made 2005 Freightliner that reached the million mile mark on its odometer in 2010—and was still running strong. The Browns extended thanks to all the drivers and mechanics who kept the tractor running and in prime condition for one million miles, a true accomplishment. Mike Norris, the driver first assigned to Tractor 151110, reflected: “So much has happened throughout the years at NFI, including the opportunity to work with amazing people and do a job I love. And now, another special event is taking place. As the first driver of 151110, I am thrilled to be a part of the NFI celebration for our first tractor surpassing the million mile mark! Who would have guessed I would be part of such a special time in the company’s history? But then again... NFI has always been full of wonderful surprises for me. I did not think I would love my company and my job as much as I do. So here’s to the next million miles, NFI, and thank you for allowing me to be part of such a wonderful team!” Also in 2010, the senior management team began focus on making every customer service department in NFI exceptional in meeting the needs of internal and external customers. “We want our customers and our employees to have a positive experience with NFI in every way possible,” Jeff Brown said. “What if we had the power to tailor each experience to positively influence a customer’s perception of us? To assure each driver that they are going to get first class service when they call in? A positive experience can result in company loyalty, increased profitability, and repeat business.” Leadership recognized that excellent customer service experiences don’t just happen; they are designed, implemented, and carefully measured and monitored in order to deliver a positive experience every time. “We want the NFI Customer Experience to be the best possible one in the industry for both customers and drivers,” Sid said. The former director of marketing and corporate communications developed a plan that started with the senior management team and cascaded down. It involved identifying what NFI needed to be successful, customer service training,

211 National Freight Inc Making the Eagle Soar: 2007–2010 measuring and analyzing the results, and implementing what they learned so that the NFI Customer Experience could become the best in the industry, and NFI could be one step closer to fulfilling what its customers wanted in an ideal supply chain partner. The plan saw rapid results. One of the first departments to be targeted was Breakdown, which handled calls from drivers who were experiencing a breakdown or accident. At the beginning of the year, drivers who called in might be on hold for quite some time—the average time to answer the call was well over two minutes, and many drivers hung up in frustration. A new system was put in place that distinguished critical calls from those that were less urgent, and additional people were trained and assigned to work the breakdown desk during peak hours. Within a month, the average response time had dropped to twenty-two seconds—an amazing improvement, and a perfect example of the level of excellence held up as a standard for all. This commitment to excellence proved highly worthwhile. By 2010, revenues had surpassed $900 million, three times what they were at the turn of the millennium. Of course, keen, business acumen and a shrewd acquisition strategy were also key factors in keeping the company moving forward throughout the first decade of the twenty-first century.

212 Making the Eagle Soar: 2007–2010 National Freight Inc • 2009: NDC - Network Logistic Solutions, a warehousing company, adding 516 employees and an additional three million square feet to the warehouse and distribution space. This acquisition also expanded port opportunities in Jacksonville, Florida, and Savannah, Georgia, and opened a new presence in Muskogee, Oklahoma. • 2010: NFI - IPD Global, Inc., an international company based in Canada with annual revenue totaling approximately $50 million, acquired by NFI to brokerage services in perishable transport across North America. Through these acquisitions and other growth, such as that generated by the expansion of the company’s trans-border services with truck and rail, NFI positioned itself to continue its explosive growth into another decade. The brothers continued to look for fresh opportunities to evolve and adapt as the market was changing. ACQUISITIONS NFI completed numerous beneficial acquisitions in the ten years from 2000 to 2010, including: • 2000: NDC - Burnham’s Manufacturing Support and Dedicated Warehouse Division, a third-party logistics provider in Atlanta, adding seven facilities. • 2002: National Freight - Core Carriers, a southeastern U.S. OTR truckload carrier with 350 tractors and 900 trailers. • 2004: National Freight - Campos Express, an OTR carrier in Tunkhannock, Pennsylvania, adding 115 tractors and 450 trailers and a core service area of 14 states within the Northeast and Mid-Atlantic Regions. • 2005: NDC - The New Concord, Ohio, operations of General Warehouse and Transportation. That acquisition added 945,000 square feet of warehouse space to NDC’s asset-based logistics solutions. • 2006: NDC and National Freight - Crum & Crum Enterprises, with its one million square feet in managed warehouse space, and Hunsaker Truck Lease, which added one thousand pieces of additional equipment. • 2007: NDC - Quick Pak, a contract packaging and decorating company located in Cincinnati, OH, which added a new service for NDC customers. This acquisition incorporated services such as promotional packaging design, custom assembly fulfillment, display design, and many other packaging specialties that provided more comprehensive packing services to warehouse customers. A growing company never stops changing, and we will continue to make positive changes. −− Ike Brown

213 National Freight Inc Making the Eagle Soar: 2007–2010

215 National Freight Inc The Fourth Generation Browns Join In With a family-owned business such as NFI, one that has withstood the rigors of time in part through the strength of its founder and two succeeding generations, it might seem a foregone conclusion that the fourth generation would follow in the same footsteps—that they would automatically join the ranks, soon thereafter be handed a leadership position, and contribute to the company’s legacy. With the Brown family, this is not at all the case. In fact, the fourth generation is not only encouraged to consider other options and find the one best suited to them, but they are required to work elsewhere before joining NFI. Ike, Sid, and Jeff urged their children to seek employment in other industries first to gain general business experience. Most importantly, their children were encouraged to follow their interests wherever that would lead them. “When I interviewed to be the senior vice president of transportation back in 2015, one of my primary concerns was this: could the Brown family develop the fourth generation to adequately strengthen the company to continue progressing forward?” recalls Todd Holt, President NFI Transportation. Sid told Todd, “We have made sure to expose our children to our foundational principles, and the fact that you have to work for what you get. Nothing is given to them. Only their performance will ensure their progress.” CHAPTER 29 The Fourth Generation Browns Join In Todd was satisfied with that answer, and he has continued to be impressed with how the Brown family leaders have brought the next generation into various executive leadership meetings to learn the business, build relationships with the senior leadership personnel, and engage in special projects. “The family has engaged in thoughtful, long-term family planning and development,” Todd says. “The premise is to find out if the next generation is interested in pursuing a career in the family enterprise.” We didn’t want to over-expose them to the business and wanted them to pursue their passions wherever that may lead them. −− Sid Brown

216 The Fourth Generation Browns Join In National Freight Inc The third generation (Ike, Sid, and Jeff) also instituted a structure for the fourth generation whereby their children will first work at some other company for a minimum of four years. After that, they may be eligible to begin a career at NFI if they have a desire to work for the family business. Jeff, Sid, and Ike each have three children, although Jeff’s children are too young to have joined the workforce, so it remains to be seen whether Nicole, Josh, and Steven Brown Tracy, Jeff, Steven, Josh, and Nicole Brown Sid, Eric, Courtney, Jacob, and Sandy Brown will one day join NFI. Meanwhile, one of Sid’s sons, Jacob, is currently employed by Prologis, while his other son, Eric, is working at Campus Apartments in Philadelphia. Sid also has a daughter, while Ike has three sons. These four—Courtney, Jordan, Aaron, and Zachary—are representing the fourth generation of the Brown family through active involvement with NFI.

217 National Freight Inc The Fourth Generation Browns Join In JORDAN BROWN “ The culture of NFI was fostered and embedded in us children—a sense of deep responsibility to carry on the legacy, the family name, and its success,” Jordan says. Jordan graduated from the University of Delaware in 2003 with a degree in business administration, and then he had the freedom to apply himself anywhere he liked—anywhere, that is, except NFI. Approximately four years had to elapse before it would be an option. Jordan began working at Cushman and Wakefield, in Dallas, as a junior broker in the industrial market segment. He has said that he always perceived this part of his career as “a stepping stone” before joining the family business. Jordan got involved with NFI in truck leasing, distribution sales, and calling on customers for their warehouse needs, What I would impress upon the next generation is that the one thing that will continue the company’s success is trust. We all must trust each other. −− Jordan Brown Zach, Jordan, Candy, Ike, Marcus, Amanda, Nolan, and Aaron Brown then he moved into other areas to gain experience. In 2009, Jordan and a friend from the University of Delaware pitched a business plan on harnessing solar energy. NFI Solar developed this plan from 2009 to 2013. The plan provided power at a cheaper rate by using solar panels, all while making the company more “green” and socially responsible. With these solar panels, a return on investment was achieved in four years. Today, three of the company’s New Jersey warehouses have installed NFI Solar panels, and all new buildings are examined in consideration for solar installation. Next, Jordan spent time in transportation and distribution before he came to Cherry Hill, New Jersey, as operations manager for an account, and since 2015 he has been the general manager at the Cherry Hill warehouse. In the fall of 2016, he was promoted to Director of NFI Distribution to oversee warehouses on the east coast. In 2018, he moved to California to oversee a warehouse startup for Amazon.

218 The Fourth Generation Browns Join In National Freight Inc AARON BROWN Aaron has many memories connected to the family business. He recalls working with his brother Zach when he was twelve, and they were driving trucks around the terminal yard and moving them for the maintenance workers. “We didn’t do this because someone told us to, we did it because we wanted to help out.” Aaron graduated from Dartmouth in 2005 with degrees in government and psychology, and afterward he worked in the State of Texas legislature, supporting the State Senate. Following this, he worked at NFI in 2006 in intermodal and freight sales for a year. Aaron then attended Vanderbilt from 2007 to 2009 to earn his MBA before working at Morgan Stanley in Houston, and later at Oliver Wyman, a New York City–based international management consulting firm. He came back to NFI in 2012, starting in Vineland, and he worked for T.J. Lynch in finance, handling diligence on acquisitions and process improvements. “I love the business, its history, and I felt a sense of pride and responsibility,” Aaron says. “My father said, ‘You always have a job at the company if you want it. You have to pay your dues. You have to work for it.’ And that is my plan.” Aaron and his wife moved to California, where he worked for the family business in a warehouse in Chino, became a supervisor of accounts and products for the warehouse, and later became director of multiple warehouses. Today, Aaron’s next step is to learn more about the transportation side. Hence, he is starting at the bottom in the Waxahachie terminal, where he plans to rotate through different operations for several years. Our opportunity and responsibility is to manage the future directly so that the success is sustained for the next generation. And my goal is to help the next generation progress so our company can keep growing to achieve new milestones. −− Aaron Brown I take nothing for granted. I work extremely hard because of our company’s legacy and my desire to continue that legacy. I take a lot of pride in our company history,” Aaron adds, “and I look at what my grandfather and uncles and dad have built, and my goal is that the next generation of the family can progress the company and keep growing our success.” And now he has the fifth generation teed up—his sons: Nolan is four and Marcus is two.

219 National Freight Inc The Fourth Generation Browns Join In ZACHARY BROWN L ike his brother Aaron, Zach grew up helping out in the family business. As a youth, he spent his summers working in the maintenance shop and in driver recruiting, where he was treated no better or worse than any of his colleagues. His father, Ike, likewise did not cut him any special slack. “I was fired one summer by my dad because I was late on my first day,” Zach says. “Today I consider myself a pretty punctual person—wonder why?” Zach graduated from college in 2010 and moved to Hong Kong to begin his career in Asia as a Trade Lane Executive with Ontime Express, where he managed air and sea freight operations and customer services teams across thirty-seven Asian offices. Zach also founded eChina56 to service foreign companies in managing their China e-commerce distribution needs and built the non-asset based logistics company from scratch to revenues of $50,000 per month.   His experience as a trade-lane manager provided Zach with valuable knowledge of the global transportation business. He started at NFI in 2017, and as managing director for Asia operations, continues to live in Hong Kong and is responsible for all activities in this important region for NFI Global. Zach sees his work as helping to pave the road to new opportunities for NFI outside of its traditional core of domestic transportation and distribution.  “I have business cards with English and Mandarin on them,” Zach says. “It’s fun to see family members get excited about small things like an NFI card in a different language, but it excites me too, and it does mean something.”   Those business cards represent the expansion of NFI around the globe, along with the investment of the Brown family in continuing to spread the values, commitment, and personal touch that have driven the company from the start— which means quite a lot. I love knowing that what was started in small Vineland, New Jersey has grown into a company with international recognition, and I am proud when I get to see it firsthand. I’m also filled with determination and a sense of responsibility to continue to grow the good name and value that NFI offers. −− Zachary Brown

220 The Fourth Generation Browns Join In National Freight Inc COURTNEY BROWN “ I always knew that working for NFI was a high priority for me,” Courtney says. “I think being a family member is challenging, though, because everything that comes to you has been filtered in some way. The important thing is to become a good coach, drive change, innovate, and perform at the highest level very day.” Courtney, Sid Brown’s daughter, first started working for NFI during high school, when she spent time in the finance department reviewing truck contracts and regulatory matters at the Cherry Hill headquarters. Then in college she had two internships with the company, one in human resources handling unemployment claims and the other in the warehousing group working on various projects. After the summer of her college sophomore year she worked in a transportation engineering group, optimizing customer trucking, and during another college summer break she worked in a specialty warehouse handling operations for Dole. “I really enjoyed all those experiences and knew that working for NFI would be my career path,” Courtney says. “Watching the company grow, and the talent they were bringing in, was very exciting. I knew I wanted to be part of our family business.” After graduating from the University of Michigan with a degree in industrial engineering, Courtney worked for Cap Gemini, a consulting group, in their strategy and supply chain management group for four years. She decided to continue her education and earned an MBA at MIT, after which she worked at Anheuser-Busch in their global supply chain group in New York City. “My father kept wondering, ‘Will she ever make the jump to NFI?’” Courtney says. “He knew I would. And I did.” She remembers his advice to her: “You should do what you love, and if that is working for NFI, that’s great. But if that is somewhere else, that’s fine too. You have to get up every day and love what you do.” She likewise recalls something her grandfather, Bernard Brown, told her: “In order to have a sharp mind throughout your life, you must stay involved and enjoy your work.” Courtney’s first full-time job with NFI was in the Paris, California, location as an inventory manager at NFI’s warehouse for Whirlpool for six months. Currently she is working as the operations manager in NFI’s Chino warehouse, which is managed for Amazon. “Our fourth generation of Browns takes our family enterprise very seriously,” Courtney says. “It’s more than just a family business. We are all focused on not only doing what is right for the customer, but what’s right for our employees. We are very people-focused and always try to do right for all parties. That’s the only way to ensure a high-growth business model.” My goals at NFI are to keep learning, keep excelling, and always be challenged to improve the business and develop opportunities for our employees. −− Courtney Brown

221 National Freight Inc The Fourth Generation Browns Join In Recently, all of the fourth-generation cousins held a planning and discussion session together. They realized that all nine of them were interested in the family business, although this was the first time they had all discussed this. “We went around the room and each cousin talked about how they viewed the company, and their potential roles in the company. What interests us? What path should each pursue? How do we coordinate nine individuals acting together, We all understand the challenges and look forward to supporting each other as we continue these dynamic and fruitful discussions. acting like one? It’s relatively easy for only three to act as one,” Aaron says, referring to Ike, Sid, and Jeff. “We realized we needed to have a coordinated effort, to be in lock step, and to let trust guide us. It was very revealing, enjoyable, and inspiring to us all.” “During our family planning sessions we are all very close and aligned in our objectives,” Courtney adds. “We all understand the challenges and look forward to supporting each other as we continue these dynamic and fruitful discussions.”

223 National Freight Inc 80th Year Anniversary CHAPTER 30 80th Year Anniversary When individuals turn eighty, they might take a look back at their lives, their accomplishments, the ups and downs, and what they might have done differently. They might take stock in where they have come from and what has brought them to where they are. Yet when NFI turned eighty, the Brown family marked the occasion not by sustained reflection on the past but by looking forward to continuing their growth, developing their portfolio, and making their environment exciting and challenging for all their people. This is exactly the drive that has afforded NFI four generations, more than eight decades in business, and over a billion dollars in revenue. To celebrate the milestone of the company’s eightieth anniversary, NFI held a ceremonial event to anticipate the future of the business while still honoring the past. As Jeff stated, “We want our employees to see this celebration as a significant milestone in our history.” Sid shared, “I only remember two-thirds of NFI’s life, and during that time what stands out is transformation. We went from a small, East Coast, regulated trucking company to an industry-recognized brand that spans Canada and the United States, providing a whole host of services.” Sid admitted that this achievement did not come easily. He attested that the keys to their continued success have been luck, hard work, and the entrepreneurial spirit that the Brown family shares. To those on the outside, seeing only its success, it might seem that NFI is a natural survivor, seamlessly floating over economic struggles without any major impact to NFI’s people and bottom line. But on this special anniversary night Sid recalled numerous ups and downs, times when it was a challenge to move the company forward. “We were on the balls of our feet,” he said, remembering times he worked six days per week, not able to rely on the large family of employees the company later had. “I’ll never forget that day, in the late 1980s, when I sent out a special business letter,” Ike said at the celebration, “the first announcing that NFI had hit the seminal mark of $100 million in revenue. I wanted everyone to appreciate and celebrate achieving such a historic company milestone.” Sid shared with those attending the importance of giving every customer first-class service, from the company’s small, mom and pop customers to its Fortune 100 customers. He also acknowledged that while customer service is at the forefront of NFI’s strategy, the heart of the company lies in its people. “One of our greatest strengths has consistently been the family and people behind NFI,” Sid said. “They have helped the company respond with commitment and creativity to diverse market forces over the decades. These included shifting economies, wars, and natural disasters. Each time, NFI has emerged stronger than before. This ingenuity and

224 80th Year Anniversary National Freight Inc dedication to success has propelled the company’s growth since our inception and will continue to sustain us as we approach our one hundredth anniversary.” Sid noted that, as of 2012, 7,000 employees depended on NFI to make the right decisions to support them, and that part of the reason NFI’s continued growth is of such importance is the resulting career expansion for its people. Sid added, “The Browns have been very fortunate over the years to be surrounded by many people who have bled blue.” “That’s why we are still around after eighty years,” interjected Ike. “And my brothers and I have been fortunate to be able to work together to build this business beyond what any of my grandfather’s, Dad’s, and our dreams envisioned. We have had as many dark days as sunshine days, but we are still here...still here with more to do.” During their comments that night, the brothers discussed expanding NFI’s global reach into South America, Europe, and Asia, along with plans to reduce the company’s carbon footprint by removing dependency on fossil fuels and continuing to look for ways to improve environmentally. They noted that a good portion of NFI’s fleets might convert to a natural gas solution and that the addition of Jordan Brown and the NFI Solar business solution was just the beginning of the transition to the fourth generation of this family-owned business. As pointed out at the anniversary event, studies show that only about 30 percent of all family-owned businesses survive into the second generation, which drops to 12 percent in the third generation, and only 3 percent through the fourth generation and beyond. Yet, as Ike, Sid, and Jeff shared, “We are certain that the Brown family entrepreneurial spirit will continue to conquer the odds in the future.” Below is a transcription of the 80th Anniversary video tape delivered to customers and employees: “The Browns have been very fortunate over the years to be surrounded by many people who have ‘Bled Blue.’ That is why we are still around after 80 years. And my brothers and I have been fortunate, and yes lucky, to be able to work together to build this business beyond what any of my Grandfather’s, Dad’s and our dreams thought could be done. We want our employees to see this celebration as a significant milestone in our history. We look forward to tomorrow and the coming years, and we have our employees to thank for this achievement.” — Sidney Brown We want our employees to see this celebration as a significant milestone in our history. We look forward to tomorrow and the coming years, and we have our employees to thank for this achievement. −− Sidney Brown

225 National Freight Inc 80th Year Anniversary

227 National Freight Inc A Day in the Life of an NFI Driver Truck drivers are the unsung heroes of the transportation industry. They battle daily and bravely against the many challenges, both expected and unpredictable, that arise on the road. Trucking is not for the faint of heart, and it demands skill, specialized knowledge, and courage. A novice driver must already command some of these characteristics before taking the wheel and refining them through the school of experience. It takes capability and commitment, and no one does it better than the skilled drivers employed by NFI. A perfect example is Willie Stewart, an NFI driver out of Waxahachie, Texas. CHAPTER 31 A Day in the Life of an NFI Driver A DAY IN THE LIFE OF WILLIE STEWART — NFI DRIVER, WAXAHACHIE Willie began driving trucks at sixteen years old and has now been doing it for forty-two years. He came to work for NFI in 1994 because, as he put it, “They had more to offer me. They were focused on a dedicated trucking philosophy, meaning I could be home more regularly, versus competitors that wanted me over the road, which may have required up to eighteen days away from home at a time.” Arrive NFI Terminal Waxahachie, Texas On a normal day of the workweek, Willie arrives at the NFI Waxahachie Terminal anywhere between 1 and 5 a.m. to begin his day. Upon arrival, he will log on to his truck’s Omnitrac mobile device from Qualcomm. Then he will visit the NFI dispatch facility in Waxahachie to handle the paperwork. Prior to departing the NFI terminal, Willie has a mandatory checklist to complete for his truck. Modern trucks are complicated pieces of equipment, and Willie knows that even the best of equipment needs regular examination and maintenance. “I check it all carefully, every day,” Willie explains. “If you don’t treat your truck well, it won’t treat you well.” On this day (February 1, 2016), Willie is driving with an empty trailer to Fort Worth, Texas, to the Colgate Palmolive distribution center, to secure a load of consumer goods. These goods will be pre-loaded onto a 53-foot trailer in preparation. 03:00

228 A Day in the Life of an NFI Driver National Freight Inc Depart NFI Terminal Waxahachie, Texas As with most of NFI’s dedicated drivers, Willie is riding in a cab that he is familiar with. Often a driver will drive the same cab for 500,000 miles or for five years, whichever milestone comes first. Willie liked his old 2007 Freightliner so much that convinced NFI management to allow him to continue driving that same Day-Cab (no sleeper)—one he fondly nicknamed “Ol’ Betsy”—to 700,000 miles. Finally, the management told Willie, “Ol’ Betsy just has to go.” Today Willie is driving his new 2016 Freightliner with a Mercedes engine and only 5,431 miles. Being the latest and greatest, it is configured with all the newest technology. Although Willie’s new truck is impressive, he still sometimes misses Ol’ Betsy, which he calls “the second love of my life.” Willie is one of more than fifty drivers at NFI’s Waxahachie terminal, including thirty-five NFI drivers and fifteen owner operator drivers. When NFI decided in 2010 to shift its core business away from “over the road” transport to “dedicated transport” instead, drivers were able to be placed on a customer account on a long-term basis. Following NFI’s strategy shift toward dedicated truck routes in 2010, Willie began hauling loads on a permanent basis for the Colgate Palmolive Distribution Center in Fort Worth. He hauls their consumer goods (wipes, Armor All, soups, paper towels, dishwashing liquid, etc.) mostly to Wal-Mart Distribution Centers in Texas and Oklahoma, to drop and then pick up an empty trailer to return to Colgate Palmolive. Today, though, the drop-off will be to Dollar Tree and the customer will unload. Willie will then return to Colgate Palmolive with the same trailer, now empty. 07:15

229 National Freight Inc A Day in the Life of an NFI Driver Arrive Colgate Palmolive Distribution Center Fort Worth, Texas This Colgate Palmolive warehouse is actually an NFI Distribution Center, owned and operated by NFI. It was built by NFI in 2011 specifically for Colgate Palmolive. Willie stops at the Colgate Palmolive security gate to check in, and the facility dock personnel provide Willie the bill of lading with today’s load specifics. The normal drop (the current empty trailer) and hook (a pre-loaded trailer) will take twenty minutes. However, depending on the number of other drivers with their daily shipments, this could take up to an hour. Warehouse Clerk Jackie Zelaya checks Willie in and supplies him with his paperwork. Now with 41,450 additional pounds on the NFI Great Dane 53’ trailer, Willie is pulling a total weight just shy of 80,000 pounds, which is the maximum limit of weight he can transport. Depart NFI Warehouse NDC Colgate Palmolive Willie heads north to Marietta, Oklahoma. 08:43 09:36

230 A Day in the Life of an NFI Driver National Freight Inc Depart Dollar Tree Marietta, Oklahoma Willie spends twenty minutes eating lunch at The Burger Barn outside of Gainesville, Texas, then heads back to the NFI distribution center for Colgate Palmolive in Fort Worth to drop off the trailer, arriving at 2:40 p.m. Arrive NFI Warehouse NDC Colgate Palmolive Willie drops off the trailer at the Colgate Palmolive warehouse. Arrive Dollar Tree Marietta, Oklahoma At Dollar Tree’s distribution warehouse, slot 88 is assigned to his load. After backing in between two trucks, an extremely tight fit that he manages without any problem, a red light is activated, meaning the Dollar Tree warehouse staff is unloading his trailer. After thirty minutes, the light switches from red to green, signaling the trailer is now completely unloaded and ready for Willie to pull out. First, Willie pulls out ten feet from the dock and climbs into the trailer to sweep it out. 11:17 12:30 14:40

231 National Freight Inc A Day in the Life of an NFI Driver Arrive NFI Terminal Waxahachie, Texas Next he returns to NFI’s Waxahachie terminal by 4:00 p.m., and the day is almost done—there is still some final paperwork for Willie to complete, and he needs to receive tomorrow’s assignment. He is then ready to head home after a full day’s work. Arrive Home, Sweet Home Willie arrives home at 6 p.m. and heads straight to bed to catch seven hours of sleep, for he knows he has an early start tomorrow. He will awake at 1:00 a.m. in order to arrive at NFI Waxahachie terminal by 2:00 a.m. for his trip to Duncan, Oklahoma, via the Colgate Palmolive NFI Distribution Center, to drop off goods for Dollar General. Another day completed, without accident and on time, and once again his customers are pleased. Customer satisfaction and safety are two hallmarks of his work, as they are for NFI as a whole. Of his three-year safety award, Willie says modestly, “I’ve always been safety-conscious—both on the job and off. It’s the right thing to do for the company, yourself, and your family.” “Willie exemplifies the high standards of a professional driver,” concludes Bill Vennell, longtime NFI terminal and operations manager at the Waxahachie terminal. “Willie is consistently on time, cooperative, and prompt about his paperwork. He can be counted on to do his job, and he rarely complains. We’re glad he’s one of ours.” 18:00 16:00 Ike Brown sums up Willie’s work ethic and dedication like this: “Willie is a model driver any way you measure it—mileage, safety, attitude, all-round performance, and friendliness to customers. He’s top shelf and exemplifies the standards NFI has established for all its drivers.”

233 National Freight Inc A Day in a NFI Distribution Center Distribution is a key piece of the transportation and logistics puzzle, and warehousing (or distribution centers) is critical to serving customers. It is also a significant part of NFI’s business model, which now encompasses over 31.5 million square feet of space under NFI management. A distribution center for a set of products is a warehouse or other specialized building that is stocked with products (goods) to be redistributed to retailers, to wholesalers, or directly to consumers. A typical retail distribution network operates with centers set up throughout a commercial market, with each center serving a number of stores. Suppliers ship truckloads of products to the distribution center, which stores the product until needed by the retail location and ships the proper quantity. Since a large retailer might sell tens of thousands of products from thousands of vendors, it would be highly inefficient to ship each product directly from each vendor to each store. Many retailers own and run their own distribution networks, while others outsource this function to dedicated logistics firms that coordinate the distribution of products for a number of companies. This is where NFI comes in. CHAPTER 32 A Day in a NFI Distribution Center At NFI’s distribution operations, the facilities themselves are impressive, and the equipment and processes in place are a major part of their successful operation. Yet it is the people who make things run smoothly, adapting to changing circumstances and overcoming obstacles. Just ask Paula Webb, manager of customer service and administrative support at a new one million square foot NFI distribution center in Kutztown, Pennsylvania, which opened in 2014. She has been with NFI for ten years. “I love my job—I have the opportunity to use my critical thinking skills to solve problems and add value,” Paula says. Truck terminal in Allentown, Pennsylvania

234 A Day in a NFI Distribution Center National Freight Inc “On an average day, we ship between two hundred and two thousand Rent-A-Center products,” Tara says. “The fluctuations of business can be challenging, but I like the opportunities to interact with both our associates and with the customer. As well, we are making a difference in helping Rent-A-Center serve its customers more efficiently.” For NFI, this efficiency is a key driver at the distribution centers, as with all aspects of the company, but the company’s other core values never take a back seat. Let’s take an inside look at another one of NFI’s distribution centers, this one located in Lancaster, Texas—a Lowe’s Appliance Distribution Center (ADC). NFI previously operated a Lowe’s distribution center in Arlington, Texas, but after the business expanded in 2015 the operation moved to Lancaster and a newly-built 400,000 square foot facility. As large as this is, it is soon to expand to one million square feet later in 2017. Lowe’s is now the largest retailer of appliances, so the facility’s forty daily truckloads are strictly appliances. The This distribution center sees 75 truck loads inbound daily and 100 truck loads outbound daily for customers such as Ocean Spray, Colgate Palmolive, Eastwood (antique car parts), Amcor (plastic bottles), and Worldwide Material Handling (shelving). Employees at this and other distribution centers fill a variety of roles: general manager, operations manager, supervisors, inventory team, customer service, office lead, safety and training personnel, a staff of traffic coordinators, work queue coordinators, forklift operators, and Ready to Display personnel who produce specialized packaging. Paula adds, “NFI allows you to expand your skills and grow into any area of the company you wish.” As another example, there’s NFI’s distribution center in Atlanta, Georgia, where Tara Bryan is the general manager. This location is 156,000 square feet and is dedicated solely to Rent-A-Center, servicing over five hundred regional stores covering seven states in the southeast as well as Puerto Rico. Typically, NFI can ship an order to the relevant Rent-A-Center store within two hours. What I really like about NFI is the amount and quality of support I receive from my coworkers and my bosses. Everyone cares and everyone is here to support you and help you in any way. −− Raul Costilla NDC, Lancaster, Texas

235 National Freight Inc A Day in a NFI Distribution Center Bolingbrook, Illinois facility

236 A Day in a NFI Distribution Center National Freight Inc Ontario, California

237 National Freight Inc A Day in a NFI Distribution Center three shifts are ten hours each, with seventy-five employees working four days per week. Raul Costilla, who has been with NFI for two years, works as a Shift Supervisor at the Lancaster NDC. His duties include supervising inventory for store express orders, out of inventory, as well as customized orders. “My normal day, I arrive at 6 a.m.,” Raul says. “I oversee our customer service representatives who work with the Lowe’s personnel to ensure we are shipping the correct product out with one hundred percent accuracy. After I review all of this material, we go to the warehouse and check with all our forklift operations––three per shift––to make sure that day’s activity is running smoothly. After that, I discuss with my inventory clerk the day’s activities for the inventory counts for the bulk of our business to ensure accuracy. I keep repeating these steps of activity throughout the day.” Another NFI employee contributing to the Lancaster NDC is Greg Yanko, an Operations Manager, also known as a ‘sharp shooter.’ He travels to different facilities to handle start-up (new customer engagements), inventories, and customer troubleshooting. In a typical month he might go to two NFI or customer facilities to handle new procedures to be implemented. “This was an important position as the company was really counting on me to fix many issues in the field,” Greg says. “I get to engage and collaborate with my internal and external customers, which is terrific.” The General Manager at the Lancaster facility sees a real difference in how NFI operates. “The leadership team has a remarkable pulse on the business. They are involved and are passionate about the company. They make you feel welcome, and their work ethic and intelligence is motivating. You want to work harder for NFI because the leaders are working diligently for you.” Because turnover is generally very high in the transportation and distribution field, this manager was surprised and impressed to find out the high proportion of NFI employees with many years of tenure. He discovered part of the reason why—a commitment to communication. “My counterparts are so willing to share information and experiences; everyone is transparent and an open book,” he says. “In previous logistics companies I worked for, my counterparts were unwilling to share information. It’s a breath of fresh air and so helpful to me and everyone. This shows again that the values of the company are truly believed and taken to heart by everyone.” As part of their support for these values, NFI leadership recognizes that employees need help to achieve high expectations and sometimes even have competing interests. “Everyone talks about the ‘family culture’ at NFI,” the General Manager continues. “But it’s really true. One day I mentioned to my manager, Pat Byrnes, that I felt bad missing my son’s football game due to a huge shipment for Lowe’s that was urgent. He told me, ‘Don’t miss that game. Leave!’ In fact, he has often told me, ‘There is nothing you can screw up here that I can’t fix. But I can’t fix your family.’” At NFI distribution centers, the passion and commitment that have driven the company forward are on full display, and the company’s values are lived out in practical, real-world applications, even from an employee’s very first days of training on the job—spent in an environment of support and collaboration. Lancaster’s General Manager puts it this way: “Other companies throw you in the fire and say, ‘Good luck.’ But NFI cares and wants you to be the best you can be for the company and the customer.”

239 National Freight Inc The Spirit of Giving and Community Service CHAPTER 33 The Spirit of Giving and Community Service F or many years now, NFI has worked hard to become not only an authority in transportation and logistics, but also a leader in supporting its communities. NFI employees know that volunteerism makes this world a better place in which to live and work; when you give of yourself you can improve the community you serve and the industry to which you belong. In fact, social responsibility is one of the six values at NFI, and the company participates in and donates funds and services to many charitable events and several foundations each year. These partnerships are active at a variety of levels— company-wide, specific offices, and individual employees who choose to get involved. As an example, consider the NFI Cherry Hill office in 2009. At the American Heart Association’s Fall HeartWalk that year, the Cherry Hill office was the #1 team for fundraising out of all the companies participating, NFI was #3 in overall fundraising, and an NFI employee (Jessica Sawyer, Cherry Hill HR) was #1 for individual walkers in fundraising. That same year, the Cherry Hill office’s Brian (Hollywood) Dillmore, Vice President of Network Services, entered the “Philadelphia Celebrity Boxing 14,” his first official boxing match, and raised $1,500 for the Make-A-Wish Foundation and its mission to grant wishes to children with life-threatening medical conditions. And Cherry Hill employee Daniel Deitch took part in Philadelphia’s Insurance Triathlon-Olympic Race in 2009, completing the triathlon in memory of his mother, who was a victim of leukemia many years ago. Daniel raised $3,300 for the Leukemia & Lymphoma Society, with many NFI friends and colleagues cheering him on. Individual employees and offices contribute to a wide variety of organizations that work to make the world a better place, and the company, as a whole, likewise focuses on particular causes. Here are three examples that stand out in recent years.

240 The Spirit of Giving and Community Service National Freight Inc NATIONAL MULTIPLE SCLEROSIS SOCIETY While NFI supports a number of organizations, its largest area of giving is in support of the National MS Society. NFI’s involvement with the MS Society began when a friend of the Brown family developed MS. The Brown family realized the need for logistics support for the MS Society’s events, and NFI has been a strong and consistent supporter ever since. Since 2009, NFI has been the official logistics sponsor of the MS150 City to Shore Bike Event in New Jersey, the East Coast’s largest overnight cycling event. NFI supplies warehousing, supplies to the cyclists, rest stop personnel, personal items for the riders, and transportation for all food, water, and material related to the event. In addition, employees, family, and friends join Team NFI each year to ride 150 miles and raise funds for the study and treatment of multiple sclerosis. Jeff Brody, previously with the MS Society, recalls his impressions at one of the City to Shore bike events: “What amazed me about NFI is that everyone is happy, friendly, and so willing to help. They treat everyone like family. I am so impressed with NFI’s professionalism and caring nature.” MEDISEND INTERNATIONAL F or the past seventeen years, NFI has likewise been privileged to partner with non-profit organization MediSend International to deliver medical aid to developing nations. Founded in 1990, MediSend’s programs strengthen healthcare worldwide through the professional training, certification, and equipping of biomedical equipment technicians and hospitals in developing countries, and also through emergency aid and relief campaigns. Over the years, NFI has shipped supplies to benefit hospitals in numerous countries on behalf of MediSend, such as Equatorial Guinea, Angola, Chad, and Bangladesh. NFI has also provided crucial transportation services to support MediSend’s global humanitarian efforts, including emergency aid following natural disasters and initiatives to combat the spread of Ebola. MediSend also offers medical technology education to military veterans, and NFI has

241 National Freight Inc The Spirit of Giving and Community Service provided shipments of materials needed at the veteran training center in Dallas. “Since the beginning of our partnership with NFI, they have been the backbone of our transportation requirements, whether by land, air, or sea,” says Nick Hallack, president and CEO of MediSend International. “They have always been there for us, and we can’t imagine our organization’s effectiveness without the generous support of NFI.” “It is a privilege to be able to utilize NFI’s expertise in the swift, efficient transport of essential goods and services to support the efforts of MediSend,” says Ike Brown. “When time is of the essence, NFI gets the job done, and, in this case, plays a part in saving lives. It’s an honor to contribute our knowledge to MediSend’s noble cause.” ARMY PaYS PROGRAM NFI has partnered with the United States Army Recruiting Command, which developed the Partnership for Youth Success (PaYS), a program to appeal to young people interested in obtaining a civilian job after their service in the Army. The PaYS program encourages America’s industry to work with the Army to help fill positions with highly qualified applicants. If soldiers choose to enroll in the PaYS program, their credentials will be entered into a database that matches the needs of participating companies with the skillset of the soldier. Six months prior to separation, participants begin transitioning to a civilian life and new employment, which includes applications, interviews, and pre-employment visitations. Once the individual leaves the Army, he or she can choose to accept employment if it is offered. With this program, NFI benefits by acquiring developed professionals who have been qualified to the highest of standards, while also supporting the Army’s mission and its veterans. Whether at the individual, office, or company-wide level, NFI will continue to be a proud supporter of worthy causes designed to make a real difference in the world. Just as the company’s business operations have expanded across the globe, the positive consequences of this support will grow and spread, touching an untold number of lives. As NFI employees continue taking the time to care, give, and get involved, their impact will be felt for a very long time to come.

243 National Freight Inc A Foundation for the Future: 2010 and Beyond CHAPTER 34 A Foundation for the Future: 2010 and Beyond The first decade of the twenty-first century had seen remarkable change and growth at NFI, and the second looked poised to do the same. The year 2010 saw the merging of NFIL and NFI Dedicated into National Freight Transportation, the elimination of OTR, and record revenues of $900 million. And before the year was out, other ventures would be put into motion—such as a substantial expansion into Canada. The next few years would also see substantial growth in the Brokerage division, strengthening NFI’s non-asset based offerings… a major thrust for the company. A HYBRID MODEL These non-asset based offerings provide a means to augment the company’s 3PL strategy without the capital expenditure of hard assets, while simultaneously offering a more diverse and flexible array of options to clients. This approach had been ramping up since about 2003, growing more developed each year, and today the range and cross-functionality of asset based and non-asset based offerings helps distinguish NFI as a full-service 3PL provider. In the past, the 3PL sector was essentially divided into those companies that owned assets and those did not, but NFI has developed a hybrid model that is able to offer the best of both worlds to its customers—key benefits such as minimized capital investment, managed risk, top-tier IT infrastructure, speed to market, process innovation, managed complexity, and superior customization. “A hybrid 3PL can blend the right assets and services to create the appropriate solution for a customer,” says Sid Brown. This blend can be tailored to each individual client’s needs, rather than forcing a one-size-fits-all approach on a wildly diverse industry. Owned assets and solutions can be employed where appropriate, supplemented by outside assets and services where beneficial and delivered by trusted partners. NFI establishes and maintains these relationships, carefully monitors their performance, and manages the optimized delivery of services to the end customer. Speed and efficiency are two hallmarks of NFI’s hybrid model, as the company’s flexible approach can deploy solutions quickly and adapt when the market or situation changes. “‘NFI has created Rapid Deployment Teams staffed by pros who coordinate NFI nationwide resources to address challenges,” Sid Brown says. “These teams operate like highlytrained S.WA.T. teams, optimizing velocity everywhere they touch.” Support services likewise play a major role and follow through on their name—supporting and serving both legacy operations and new offerings, built for scale and optimal performance. In 2010, the Fleet Services Department was established, and Shared Services of HR and Finance continued to evolve to support the range of ongoing asset based and non-asset based operations. Yes, the start of the decade was an exciting time across NFI’s divisions. Moving into the coming years, the plan was to grow organically and through strategic acquisitions. Savvy real estate purchases provided both a source of revenue and a way to support growing number of distribution centers; meanwhile, the Brokerage division coordinated a broad spectrum of transportation needs, and the Global team extended the company’s reach worldwide.

244 A Foundation for the Future: 2010 and Beyond National Freight Inc CANADA Prior to 2010, NFI had a small presence in Canada, with warehousing in Toronto and Edmonton for a single customer. When the opportunity presented itself to expand in this neighbor to the north, NFI seized the moment and acquired IPD Global, Inc., non-asset global transportation and logistics services provider based in Mississauga, Canada. At a 3PL summit in Atlanta that June, Sid Brown provided an overview of the various factors that led to this acquisition: “We have a small footprint in Canada, and we had secured some pretty nice sized contracts that were getting us to a larger footprint [there] from a warehousing standpoint,” he said. “We felt we needed to add to our capabilities from a transport standpoint, so this was a good entry point for us in terms of being able to have the capabilities to handle shipments in and out of Canada and within Canada in a much broader capacity than we had previously.” IPD’s core focus was in perishable-based air and ocean transport, intermodal, and truck brokerage services. One of its benefits was its large presence in the handling of produce in and out of Canada for a few of the largest grocery chains doing business in the country, with shipments moving into and out of Canada to South America, Europe, the United States, and Mexico. Perishable transport requires a complex way of moving shipments, which itself necessitates a lot of attention to detail. With IPD providing large grocery chains with an end-to-end solution, NFI’s acquisition of the company allowed it to leverage some of IPD’s strengths that were applicable for NFI’s U.S.-based grocery partners, which constitute roughly 20-to-25 percent of NFI’s customers. This acquisition provided a larger footprint in Canada, and NFI was quick to build upon it. IPD was a non-asset provider, so NFI complemented their existing operations by placing assets in Canada along with some dedicated fleet operations. This arrangement allowed for a broadening of services in Canada while taking some of what IPD did well and bringing it to the United States. IPD’s non-asset based transport services, specializing in inbound and cross-border routes, offered a perfect counterpoint to NFI, with its strengths in outbound transport and dedicated fleets, and its widespread distribution and warehousing network. NFI Canada has offices in St. Stephens, Vancouver, Mississauga, and Montreal, and in a separate acquisition NFI gained additional warehouses in Toronto. NFI now provides supply chain expertise in Canada, in seven locations, with a total warehousing square footage of 2 million and revenue of $105.5 million. 2015 revenue breakout

245 National Freight Inc A Foundation for the Future: 2010 and Beyond FLEET SERVICES Before 2010, the group of people responsible for the fleet was simply Maintenance, and it was a considerably smaller group than it is today. Just ask Bill Bliem. “Keep in mind that prior to six years ago, the Fleet Services Department did not exist,” says Bliem, Senior Vice President of Fleet Services. “It all evolved around the new Asset and Maintenance Software we implemented in 2010.” Bliem recalls his interview when NFI called him in to be considered for a job in fleet maintenance. “Actually, it wasn’t an interview… it was a talk. This was so unique. The first question was, ‘What did your dad do for a living?’ Second question, ‘What sports did you play in high school?’ They were looking for my character qualities.” “I thought to myself, ‘This team is very collaborative, very intertwined with each other.’” Bliem started as Vice President of Maintenance. At that time, there were 18 people at corporate and 90 maintenance technicians in the field. Now, Fleet Services has 50 people at corporate and 130 technicians in the field, while the number of trucks serviced has grown from 1,600 to 2,000. There are now 18 maintenance shops, with the largest one in the Lehigh Valley, Pennsylvania. As the fleet continues to grow, so do the responsibilities for Fleet Services. As the fleet grew more and more new trucks were added annually. The department also started a new business in 2010—NFI Trailer Leasing, which leases storage trailers, often on a seasonal basis. These trailers have reached the end of their life cycle in the NFI fleet, which lasts about twelve years, after which they are normally sold or scrapped. With this new business in place, these trailers are instead refurbished and leased out to other companies. Two hundred trailers were leased the first year, but by 2016 that number rose to 1,100 trailers, providing $2 million in revenue. Other responsibilities handled by Fleet Services include Corporate Purchasing (manpower in warehousing, forklifts, A Dive into the NFI Tagline WE’LL TAKE IT FROM HERE “WE”speaks to the collective NFI community and various lines of business. It is a team approach that unites all NFI associates. We do not sell individual commodities, but rather a full solution. We believe NFI is at its strongest when multiple or lines of business communicate and collaborate to produce solutions that are valuable to customers. “HERE”represents global reach as well as the multiple points on customers’ supply chains where NFI can provide solutions. By fully understanding our customers business, NFI becomes an indispensable resource to satisfy some, or all, of their supply chain needs. The tagline represents forward motion and expresses the commitment of NFI to a culture of continuous improvement focusing on reducing waste. It also emphasizes the key philosophy of NFI to engineer solutions that provide customers ease of doing business. Customers are enabled to focus on their core competencies while NFI focuses on the supply chain.

246 A Foundation for the Future: 2010 and Beyond National Freight Inc office supplies, etc.), Tolls Management, Licenses and Permits, Fuel, and the Asset Group (trucks, trailers, life cycle of equipment, asset review, etc.). Fleet Services is also doing its part to lower emissions and increase sustainability. “About five years ago, Ike Brown wanted natural gas trucks,” Bliem remembers. “The engines were first generation and couldn’t haul enough weight.” Still, Ike remained determined and insisted that they pursue this possibility, which presents many benefits. Potential benefits include the domestic abundance of natural gas, a renewable resource; reduced dependence on foreign oil; reduced emissions impact on the environment; federal and state incentives; cutting edge technology; and potential fuel savings. So NFI obtained grant money and set up an operation with five trucks leased from Ryder, a four-year deal. At $2.75 per gallon, diesel is break even, so the cost savings compared to diesel depend on the cost of the fuel. Over time, Ike knew that with additional engine advancements and gas tank upgrades, the savings from natural gas would build, and as more of these trucks were added to the fleet, further savings would come from scale. At present, until a competitive natural gas refueling infrastructure evolves, this alternative fuel is problematic for long haul, irregular route, trucking operations; still, it may be a viable alternative for some centrally-fueled, regional and local trucking applications, depending upon their power

247 National Freight Inc A Foundation for the Future: 2010 and Beyond requirements and their sensitivity to weight. For example, Lowe’s teamed with NFI to launch a dedicated fleet of natural gas trucks in Texas, and that fleet is among the first serving a major retail distribution center in North America to run solely on natural gas. Today, there are thirty natural gas trucks in the fleet, and many people at NFI are passionate about the advantages they offer. NFI is also pursuing the possibility of other alternatives to standard engines and fuel. Many in the transportation and automotive industries believe that electric vehicles are the wave of the future—that they will become increasingly widespread, cost-effective, and efficient. Therefore, NFI is exploring various relationships in order to position the company to take advantage of the benefits that electric vehicles provide.

OUR GOAL IS TO DIVERSIFY THE BUSINESS SO THAT EACH CAN STAND ON ITS OWN TO WEATHER ECONOMIC DOWN-CYCLES AND, MOST IMPORTANTLY, TO ADD VALUE TO OUR CUSTOMERS. —— David Broering, President, North America Non-Assets

249 National Freight Inc Brokerage CHAPTER 35 Brokerage I n 2010, NFI established a Transportation Brokerage division that matched the transportation needs of shippers with available carriers nationwide. The goal was to build a brokerage business inside NFI that represented the best things about NFI—dedication and commitment to customer service and execution. The goal was also to build a scalable brokerage department that could work alongside the rest of the service offerings and still provide world-class customer service and execution. This is just what they did. The non-asset based group they created includes Brokerage, Drayage, and Transportation Management. Building on its launch and successful implementation, NFI has experienced exponential growth. The success of the division has helped to further diversify and mature NFI as a full-service supply-chain solutions company. By increasing the number of employees, truck loads moved, and new customers, the Brokerage department has continued to thrive. NFI Brokerage provides worry-free supply chain solutions,

250 Brokerage National Freight Inc ensuring that the customers’ freight is delivered on time and safely. Customers work with a dedicated individual specially assigned to that client and its business. These logistics professionals know the operation inside and out and are available to the customers 24/7/365. David Broering, Senior Vice President of Brokerage, explains the need for this division: “Some customers are looking for a full service 3PL. Now NFI can help customers move freight that NFI otherwise couldn’t or wouldn’t want to. Non-asset based entities can move very quickly, and this speed and efficiency ingratiates NFI to its customers. Relationships become more meaningful.” NFI Brokerage delivers seamless supply chain integration, whether the customer needs Less Than Truckload Shipping (LTL), Full Truckload Transportation, Intermodal, etc. NFI Brokerage actively manages each carrier partnership on a daily basis, ensuring regulatory and service compliance, network capacity, and supply chain flexibility. There are over twenty-five thousand carriers under contract. North American Brokerage employee numbers have increased year over year. By April of 2012, Brokerage still had only five employees working out of a single location, but that number has risen to 180 employees working out of nine different offices. “The energy that you’ll see from each of the nine brokerage offices is similar,” says Broering. “They’re loud and animated; they’re very energetic and engaged while talking with customers and carriers. And they bring that energy every single day. It’s fun to stand on the sidelines and watch everything happening.” The Brokerage division took advantage of a need in the industry created in part by an economic recession. As the market collapsed between 2008 and 2010, management at other companies squeezed their staffs to do more. Once the market came back, these people couldn’t handle the additional workload, so they began outsourcing business to brokers and 3PL providers at a greater pace. NFI Brokerage was only too happy to help. In 2012, Brokerage was able to move a total of 20,000 loads, and that number has increased every year. By 2016, it had risen dramatically to 170,000 shipments for the North American offices. All signs point to an even greater number of loads moved each year as the division continues to grow. For example, in 2016 NFI completed the acquisition of United Express, which expanded NFI’s brokerage offerings in the mid-Atlantic and southeast regions, strengthening NFI’s position in the marketplace and creating value for a whole new group of customers. As usual, NFI sought a purchase that would be an excellent fit for the company’s culture and values, and it found a match in United Express. As United Express owner Brian Reich put it, “Our family owned business, with a long history of a customer centric culture, is excited to join NFI. NFI’s culture aligns with that of United Express and we feel this will be a seamless transition for our employees.” The sentiment was shared at NFI, and the acquisition proved to be a solid fit and a benefit to both the company and its customers. As David Broering said at the time, “We feel the United Express acquisition will benefit and expand NFI’s growing brokerage business. We look forward to continuing to grow with United’s current customer base and providing the same level of superior service into the future.” NFI has continued to look for strategic acquisitions that develop its service offerings, serve new customers through seamless supply chain solutions, and expand the company’s footprint. The Brokerage division is now accounts for 20% of NFI’s overall revenue and has been growing at 40% CAGR from 2012 to 2017.