Siemens Signs Two-Year Deal With Consolidated Freightways; CF to Handle LTL and Expedited Freight Throughout North America.

Business Editors

VANCOUVER, Wash.--(BUSINESS WIRE)--July 19, 2002

Siemens Corporation, one of the world's largest electronics and electrical engineering companies, has signed a two-year agreement with trucking giant Consolidated Freightways (Nasdaq:CFWY).

The agreement runs through 2003 and involves up to $40 million of Siemens' total LTL and expedited freight shipments in the U.S., Canada and Mexico. According to Mike Brewer, Corporate Transportation Manager at Siemens Shared Services, LLC, the Consolidated Freightways (CF) partnership is linked to a Siemens mandate to reduce company-wide supply chain expenses.

Siemens will leverage CF's highly dependable over-the-road performance record to eliminate supply chain costs, with the greatest savings coming from reduced airfreight costs. Brewer says time-definite freight will run on the ground, where CF's PrimeTime service is more reliable and less expensive than airfreight, and fully guaranteed.

"We are looking to rely more heavily on PrimeTime freight bookings," asserts Brewer. "In the past, Siemens has relied on air freight, and we believe CF's expedited and time-definite services are available in more markets and have proven to be very dependable. In the end, we are confident supply chain costs will go down without service or transit time being impacted negatively."

About one-third of Siemens shipments typically involve expedited or time-definite deliveries. Siemens routinely ships freight from its more than 300 locations in North America, which means it will tap into CF's 300-terminal network in virtually every metro area in the U.S., Canada and Mexico.

"By designating PrimeTime as its primary expedited service, Siemens has high expectations in terms of both performance and guarantees," says Tom Waltz, Director of Expedited Services at CF, who points out that customers like Siemens often promote reliable service to cement market leadership positions. "In many ways, Siemens uses 'service guarantees' to market both the company and its goods."

Siemens products -- a diverse mix of life technology solutions such as power plants, medical equipment, computers and telephones, rail car and vehicle safety devices -- typically are shipped according to the real-time needs of the customer.

Speed & Claims-Free Freight

"Our products tend to involve infrastructure, which means they are often integrated within a larger scheme," adds Brewer. "Siemens clients are highly dependent on speed and claims-free freight movement to keep projects in full motion."

Brewer agrees that innovative business processes involving information technology have helped elevate the importance of logistics functions such as inventory management and transportation management throughout the company.

"Logistics and transportation functions are impacted by the integrity and availability of information," Brewer explains. "We pick up data from CF hosts so our field engineers, sales personnel and project coordinators can make decisions while freight is moving."

Indeed, the CF-Siemens partnership has been working. Siemens, with 460,000 people worldwide, is growing its North American business. By next year one in every five Siemens employees will be based in the U.S., and almost one quarter of the company's annual revenues originate on this continent.

"There is a huge opportunity to leverage our supply chains," says Brewer, "and we're looking to increase our visibility on both inbound and outbound shipments, regardless of whether freight is moving regular LTL or PrimeTime."

About Siemens Industries

Siemens Corporation is based in Munich, Germany. Siemens employs people in 190 countries, some 57,000 of whom are involved in research and development with an annual R&D budget exceeding $5 billion. Siemens worldwide sales totaled $73.8 billion last year. U.S. headquarters are in New York. U.S. sales last year were $18.9 billion. The company's stock is traded on the New York Stock Exchange using the SI symbol.

About Consolidated Freightways

With $2.2 billion in annual revenues, Consolidated Freightways operates one of the largest, less-than-truckload (LTL) transportation networks. The company's 18,000 skilled professionals specialize in freight transportation throughout North America.

CF's network of more than 300 terminals serves virtually every market in the U.S., Canada and Mexico. More information about the company is available at www.cf.com. CF's corporate stock is traded on the Nasdaq exchange using the CFWY stock symbol.