InformationWeek

April 12, 1999

Logistics Via The Web

Three major transportation companies add to their Internet offerings

By Clinton Wilder

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Web-Organized

Well E-quipped?

hree major transportation firms expanded their Internet offerings last week, further establishing the Web as the key to their transition from delivery companies to providers of logistics-management services.

FDX Corp. unveiled a multimillion-dollar alliance with Netscape to integrate access to its Federal Express and RPS delivery services with Netscape's 13-million-member Netcenter portal. Meanwhile, UPS Corp. and overseas shipper APL added functions to their Web sites to enhance customers' self-service logistics capabilities.

"Ideally, we'd like our customers to be able to conduct all their business with us on the Web," says Mark Miner, director of information exchange at APL, in Oakland, Calif. APL launched a service called HomePort, which lets business users customize APL's Web site for easier access to the logistics functions they need, including shipment status, detailed bills of lading, and exception reporting.

APL hopes the service can help transform its Web site from a shipment-tracking tool to a more sophisticated information source for logistics management. By customizing the data they receive, customers will be better able to pinpoint bottlenecks in the supply chain, such as when a shipment has arrived at a port but hasn't been unloaded.

FDX, especially its FedEx unit, has been trying to remake itself as an Internet-based service company for some time. In the alliance with Netscape, FDX will place its Internet-based shipping, tracking, and information functions within the Net- center site; users won't need to follow a link to FDX's home page. FDX will also license Netscape's Custom Netcenter service to build what it calls "the first delivery portal" on the Internet, named Delivery Center.

"They're in a mad dash to get customers by making it as easy as possible to do business with them," says John Fontanella, an analyst at AMR Research. Last month, FDX made an equity investment in Vastera, a fast-growing developer of enterprise software that manages international trade logistics. FDX executive VP and CIO Dennis Jones was named to Vastera's board.

Integration Is The Core
"Integration of Internet services with our transportation offerings is not an addition to our core business, it is our core business," says Jones.FDX drove that point home last week in a day-long meeting with Wall Street transportation industry analysts at its Memphis headquarters.

The Netscape deal is focused on extending FedEx and RPS logistics- management capabilities to small and midsize businesses. The Delivery Center, expected to launch in about two months, will include access to the FedEx interNetShip service that lets companies initiate shipments from the Web. It will also feature current worldwide shipping rates, drop-off points, and shipment tracking. "Our goal is to help customers use information to replace inventory," says Laurie Tucker, senior VP of E-commerce and customer service at FedEx.

FedEx archrival UPS rolled out UPS OnLine Tools, a set of seven programming interfaces aimed mainly at E-commerce providers and system integrators. The tools let commerce sites build online shipping and logistics applications for customers. UPS already has a similar package called UPS Internet Tools, which about 15,000 customers use to integrate basic package tracking and cost calculation into their sites. The new offering adds more sophisticated functions such as package tracking by purchase-order number, the ability to customize rate tables, and the ability to upload shipment manifest information to UPS's mainframe.

But the transition from a delivery to logistics company isn't always smooth. Ryder System Inc. warned last week that its first-quarter earnings will be below analysts' expectations--in part because of lower-than-expected profits in its logistics and international businesses.

--With additional reporting by Bruce Caldwell