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September 27, 1999

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(InformationWeek) Optimized Delivery Routes

Speedy delivery of status reports depends on strong networks and complex Web tie-ins

By Candee Wilde

nformation is second only to petroleum when it comes to keeping fleets of planes and trucks and loads of people and packages on the move. One airline executive sums it up well: The transportation industry has an insatiable appetite for technological innovation.

The transportation companies in the InformationWeek 500 rely on technology in virtually every aspect of their operations. But several specific IT trends are common among these industry leaders: the use of Web sites to increase sales and improve customer service; the development of innovative loading and scheduling systems that maximize the use of planes, trucks, and personnel; and the emergence of centralized, automated communications networks using advanced wireless and wireline technologies to link employees, customers, and suppliers.

Taking the last trend first, FDX Corp., the Memphis, Tenn., parent of Federal Express Corp., recently finished linking its high-speed core asynchronous transfer mode network with about 3,200 routers that carry IP data to 1,100 locations around the world. The result? FedEx has integrated 17 discrete networks into a single WAN that carries voice, data, and video four times as quickly as before.

In addition, FedEx is upgrading its mobile data network to provide voice and data services to more than 35,000 couriers nationwide, and it's expanding the wireless networks in its six hub locations. It even runs its own digital television network to provide videoconferencing and training services to employees' desktops.

"In the transportation world, it's all about information about the shipment," says Robert Carter, corporate VP and chief technology officer at FDX. "The most important thing we're doing is building out our networks to facilitate the movement of information." Too often, Carter says, transportation companies underestimate the strategic importance of the network-they invest in IT to collect information, but fail to build networks powerful enough to deliver that data throughout the company and to its customers and suppliers.

During the past year, UniGroup Inc., the Fenton, Mo., parent of United Van Lines and Mayflower Transit, built a network that provides Internet, intranet, extranet, and satellite communications to 13,000 internal users, 140 agencies, and hundreds of thousands of customers. UniGroup CIO John Hamilton says the network cuts the cost of distributing information, compared with voice or fax communications.

A highly reliable network also decreases the chances of shipping errors by keeping key parties linked. For example, a household move from New York to Los Angeles could involve as many as five United or Mayflower agents in different locations. "This technology links these participants, plus headquarters, plus the ultimate customer," Hamilton says.

Bar-coding technology lets movers tag each item, use a laser scanner to record it into a handheld computer before loading it on the truck, then print out a precise inventory of the goods. This same process, in reverse, ensures that each item is accounted for as it is unloaded at its destination. UniGroup is tying this system to its private satellite network, so customers can use the Internet to locate the truck carrying their goods while it's en route, or locate an item on a truck or in a warehouse.

Many transportation companies are investing heavily in multifunctional Web sites that combine commerce and customer-service capabilities. FedEx, for example, is developing Web application programming interfaces so business customers can place customized tracking and shipping information on their own internal networks.

"The Web API allows customers to connect with the rating and shipping engines that run Fedex.com," Carter says. "Instead of forcing a customer to come to Fedex.com to use the Internet pages we provide for them, they can have their own Web pages on their intranet."

Roadway Express Inc. in Akron, Ohio, operates a Web site that lets customers initiate freight pickup requests and send electronic data interchange transmissions. It also gives customers access to its tracking systems to locate shipments and is linked to an imaging system, letting customers make copies of a bill of lading or a shipping contract.

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