Transportstion: Information Is Part Of The Package

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By Stephanie Stahl
Issue date: Sept. 9, 1996

ot long ago, Frank Erbrick, CIO at United Parcel Service, walked into his boss' office and suggested changing the company's name to United Information Service. He was only half-joking. More than ever, UPS is moving beyond the package shipping business and into the information business. At the heart of this transformation is inform ation technology.

"Customers are demanding more, and we are learning how to do it with technology," says Erbrick, who heads an impressive technology organization with 4,000 employees nationwide and a budget of more than $1.5 billion. "We used to think the whole business was about picking up packages and delivering them fast. We're way past that now. A package without information has no value."

Indeed, transportation companies have become big spenders in technology as they change the way they do business. The industry spent an estimated $16.3 billion on IT in 1995, according to G2 Research Inc. in Mountain View, Calif., to bring information closer to the customer, reduce transit time, find competitive differentiators, cut expenses, and so much more.

Package delivery companies such as UPS, airlines such as USAir, and trucking companies such as Caliber Systems Inc., formerly Roadway Services, are using innovative technologies to provide more information to customers and to bolster customer service. For these and other transportation companies, online services and the Internet are fast becoming strategic weapons.

UPS soon hopes to provide some form of electronic service capability to all of its 1.3 million customers. The Atlanta company already offers a variety of online access mechanisms. Customers can install a Windows application that gives them dial-up access to the UPS system. The UPS OnLine system offers package tracking, customs documentation, and daily shipping summaries. In the future, it also will include E-mail and advanced shipment notification capabilities.

Customers can also access such information through CompuServe, Prodigy, or the Internet. UPS's World Wide Web site receives hundreds of thousands of hits per day from customers looking for package tracking information or seeking to schedule a pickup. "We want to give customers the opportunity to use the Internet as a device to communicate with us," Erbric k says. "We want them to be able to have their pickup books reside on the Internet."

UPS is investigating ways to use the Internet to provide logistics management and other services. "We are trying to keep our hand on the pulse," Erbrick says. "We are making sure we are moving with the wave, but we also want to stay a little ahead."

UPS competitor Federal Express also is taking advantage of the Net's pervasive infrastructure to offer tracking and shipping capabilities via its Web site in addition to its package tracking software for PCs. Several hundred thousand users track packages through FedEx's World Wide Web site instead of calling a customer service center.

"The Internet is turning out to be a general-usage medium to provide value-added services," says Ron Stewart, a partner with Andersen Consulting's transportation and travel service. The key, he says, is to provide a range of services to attract everyone from high- ly sophisticated customers who want to communicate via electronic data inte rchange down to mom-and-pop shops.

UPS is helping companies integrate shipping information into their core applications by providing direct links between customers' computer systems and UPS' host-based systems. It is establishing relationships with large companies to provide direct interfaces between customers' ordering systems and UPS' mainframe shipping system. Employees at a retail store, for example, will be able to log onto the UPS system to schedule product shipments. "It is a seamless interface to their order entry system," Erbrick says. "They don't even know they are using UPS computers. Customers just want their business events taken care of."

"There is an opportunity through value-added services to increase intimacy with customers," says Andersen's Stewart. "Customers are asking for ways to link order entry, transportation management, and financial systems" to avoid duplication of effort, he adds.

Empowerment
Cutting out unnecessary steps and putting more power into the hands of customer service representatives and users are key to improving customer service at USAir, one of the airline industry's top users of IT. US Air is in the midst of deploying several innovative programs designed to make more data available internally and externally.

For an airline that has more than 17 million members in its frequent travelers program, keeping up with customer inquiries and requests is no small feat. Indeed, with frequent flier accounting information in one place, flight information in another, and tens of thousands of letters stuffing USAir's mailbox, it can take weeks to resolve a customer issue. But USAir in Arlington, Va., is in the final stages of implementing a new image-based system--code-named Astro--that will make collecting and tracking frequent traveler account information and correspondence more efficient.

"The [frequent travelers] program has been getting so big that we have gotten as much as 20,000 pieces of mail a day," says Dan Bock, VP of marketing services at USA ir. "We simply couldn't handle it. So we are using technology to improve productivity and enhance customer service." The goal: single-call resolution. The customer, Bock says, should never have to call more than once.

Utilizing a Wang OpenImage workflow and imaging system, all frequent traveler information and correspondence will be scanned, indexed, and made available instantly to customer service representatives across a LAN. "Customers will know where their correspondence is at any point," Bock says. The customer service reps use Pentium workstations running OS/2 with 20-inch, high-resolution monitors for accessing distributed data and viewing images. The imaging system runs on two IBM RS/6000 workstations.

USAir is also incorporating ISDN and computer telephony into its customer service center so that customers' data can be transferred along with their phone calls. "We can have fewer employees but handle a greater number of transactions than ever before," Bock says.

The airline is putting more information in customers' hands. "We are always trying to find better ways to communicate and relate to the end consumer," says Thomas Lagow, executive VP of marketing. "Our priority is to use [technology] as a vehicle to create a more intense relationship with the consumer."

That means giving the customer more control. USAir provides online software to its frequent travelers to let them check fares, make reservations, purchase tickets, select seats, and make sure their frequent flier accounts are updated.

The software, Priority Travelworks, has already been requested by nearly 60,000 customers, and about half of the users are purchasing electronic tickets with it. "All they have to do is show up at the airport with a photo ID," says Rita Cuddihy, VP of marketing and distribution planning. "This is not technology for technology's sake. Technology is the enabler."

USAir is working on a version of the software that will let corporate travel departments manage travel reservations and expenses. The s oftware, which is being tested by several large companies, runs on a Windows NT server and provides links to internal accounting systems and external Web sites, such as ground transportation companies, says David Grossman, the airline's senior director of electronic distribution.

USAir also is opening up the lines of communication with potential customers through its Web site . By year's end, the airline will let passengers book reservations via the Internet. It now makes a select number of discounted fares available on the Net.

More Than Tracking
Like UPS and USAir, transportation giant Caliber System also is using technology to make more information available to customers. The Akron, Ohio, company is building a customer service system that will give customers a single point of contact for all services and provide more than just tracking information. The system will make account information, claim information, rates, routing data, and other information a vailable to customers.

"In the past, they would have to make contact with customer service representatives for each service," says Gerry Long, CIO and president of Caliber Technology, the IT arm of the company. "Now, through effective information warehousing and call management, we can populate a customer service representative's screen with information, no matter where it is located."

The key to making this possible is an open, distributed database infrastructure. "We want to make sure the information used for running the business is the same information available to customer service representatives," Long says. "Having a distributed model gives us a good opportunity to make data available in a reasonable time frame."

The company is standardizing its database technology on Oracle relational database management systems. It's also building a nationwide frame relay network and will standardize on TCP/IP for its networking protocol.

Helping drive Caliber toward improving information access for cu stomers is a new business model that treats companies such as Viking and Robert's Express as operating units. Previously, Caliber/Roadway was a holding company, and each of the individual companies was run autonomously.

This new business model is helping the units share technology more than ever. "Now that we are a family of operating units, we are looking to leverage technology as much as possible across units," Long says. Together, the units have an IT budget of $130 million.

The new model also is turning co-workers into business partners. The company spun off its Roadway Express unit into a separate company, and Caliber now provides IT services to Roadway Express under an outsourcing contract. "They used to be our colleagues," says Long. "Now, they are our customers."

But regardless of who the customer is--a Roadway company or a corporate customer who uses Roadway's services--providing information quickly and efficiently is what will continue to drive the company.

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