One such customer is Hewlett-Packard, which uses Consolidated Freightways Corp. to ship products to customers. Of particular benefit is an application that lets HP customers go to the company's Web site and link back to the Consolidated site. Customers can get details on the specific time and date a Consolidated truck will arrive on site. "The other trucking companies that we use pale in comparison to what Consolidated has given us," says Don Schmickrath, general manager in HP's product processes organization.

In essence, transport and logistics companies are subordinating their individual business plans and identities and becoming an integrated part of their E-business customers' supply chains, says Don Schneider, president and CEO of Schneider National Inc., a $2.7 billion trucking and logistics company.

"We are really part of a big chain--customers, warehouses, suppliers, our equipment, drivers, rail partners--that allows all the trading partners, independent of their internal resources, efficient interaction with the supply chain," Schneider says. "This is a dramatic change, and we really are just in the infancy of understanding how we can use this very well."

The effects of E-commerce on the business-to-consumer market--and thus on delivery of goods to homes--are well known. The U.S. Postal Service and UPS, which together handle about 75% of all business-to-home deliveries in the United States--are overwhelmed with the increased volume from Web sales, ranging from major appliances to trading cards.

"The key issue in this sort of market is lowering costs," says U.S. Postmaster General William Henderson, whose agency still handles slightly more than half of that 75% figure. "If you pay $6 for a CD on the Web, you're not going to pay $7 to have it shipped to you. We have to find the lowest-cost ways of getting the goods to you."

At the same time, carriers that handle retail goods are called on to provide more data about the contents and location of the packages they ship. "We deliver about 12 million packages a day, about 7 million of which we collect information on electronically," says Dale Hayes, VP of E-commerce and technology marketing at UPS.

"Collecting the information electronically has been good both for UPS and for its customers--it ensures the accuracy of the information we receive so that we know not only where it was picked up, but what's in the package," Hayes says. "We can use that information to keep track of inventory."

Providing that sort of data is more difficult for the Postal Service, which handles 3.4 billion pieces of mail each week.

"Our goal for our customers is that they will eventually be able to know where all their mail is through the Web," Henderson says. "It's going to take time, but we will get there."

Shippers also are figuring out how to handle new regional Internet home-delivery options such as groceries, video rentals, and dry-cleaning services.

Carriers will eventually be segmented by the number and frequency of the stops they make. "FedEx does well in making deliveries from central business district to central business district, but it will be difficult for them to fit into this local delivery service market," consultant Clancy says.

continued...page 3
return to page 1