Sept. 11, 2000

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On The Move And In Touch

Transportation companies are adding customer-service and E-business services

By Tischelle George

More on transportation and logistics:

Industry Charts:Logistics & Transportation (PDF file) sidebar: Avis Avoids Mishaps On Acquisition Spree Electronic Buyers News National hands off logistics task (8/28/00) EETimes Global logistics a puzzle for distributors (8/21/00) Computer Reseller News First, Get Smart, Then, Get By (8/21/00)

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he business of packing and shipping goods has taken on a new dimension with the growth of E-commerce. Transportation and logistics companies are adding customer-service management and E-business services to their host of fulfillment offerings.

It starts with the big guys. United Parcel Service of America Inc. and FedEx Corp. help to launch E-businesses by offering hosted supply-chain management and E-commerce tools. Last month, UPS E-Logistics partnered with EXE Technologies, Oracle, and PricewaterhouseCoopers to manage warehousing, order fulfillment, inbound and outbound transportation, returns, and customer service.

Through the partnerships, UPS provides services for startups and midsize business-to-business and business-to-consumer companies. EXE Technologies will supply data-warehouse management and its Exceed electronic fulfillment system. Pricewaterhouse Coopers will offer systems-integration consulting and project management, and Oracle will bring its enterprise resource planning and order-management software. "We partner because we can't build everything on our own and be just-in-time for our customers," says Ken Lacey, senior VP and CIO at UPS. "We partner to get the capabilities that our customers need."

FedEx provides E-business services through its E-Commerce Builder program, which offers Web design and hosting, order management, real-time financial settlement, and fulfillment to small and midsize companies. It provides these services for free, with the hopes that startups will use FedEx as their primary packing and shipping provider.

Transport company USFreightways Corp. has also partnered with companies to provide E-business services, including Web order entry and transportation management, using technology from i2 Technologies Inc. "We can be the back-end transportation and logistics provider for Web companies," says Tim Harvie, CIO of USFreightways. The company also provides total fulfillment for E-businesses from assembly and shipping to home delivery, and it's building and selling E-commerce applications such as payment authorization, online inventory management, and order allocation to retail stores.

Increasingly, more companies are promoting self-help among their customers by making internal information available to customers via the Internet. USFreightways lets its customers view reports and documents online using document imaging. Customers can also receive rate quotes and track the status and location of shipments online.

Roadway Express Inc., a transportation company that deals primarily with less-than-truckload shipments, or shipments of less than 500 pounds, serves 10,000 customers through its extranet, My.roadway.com. Roadway Express has been able to reach smaller customers with its extranet, which is important to customers because traditional technologies such as electronic data interchange are too costly for small companies to implement, says Dave Pavlich, director of E-commerce technologies at Roadway Express. Customers can use My.roadway .com to check invoices and payment history, access shipping rates, and obtain proof of delivery and other shipping documents.

All this innovation isn't relegated to the roads. Continental Airlines Inc., for instance, is helping its customers help themselves by installing electronic ticket machines at various airports. Travel customers can forgo the ticket agent and purchase tickets without having to wait in long lines. "Our goal is: If you don't want to talk to anyone, you don't have to," says

Janet Wejman, senior VP and CIO of Continental. "But if you need customer service, we have the technology to care for our customers' needs."

The airline also wants to establish a holistic view of its customers. "We're trying to know everything about the customer," Wejman says. The Customer First system, now in testing, will store information such as how often a customer flies with the airline, whether a customer's flight had been delayed or canceled, and whether the customer received an upgrade on his or her last flight. Continental's objective is to educate its reservation and gate agents about customers' experiences with the airline so the agents can respond proactively.

Several shippers and carriers use wireless technology to help their employees communicate better and to provide real-time information to their customers. J.B. Hunt Co. stays in contact with its drivers while they're on the road through on-board computers from Qualcomm Inc. The satellite system, which is integrated into J.B. Hunt's systems, lets drivers access payroll information, check E-mail, and report the status of their shipments and locations.

Having the ability to communicate while on the road is important to the drivers, says George Brooks, VP of research and development at J.B. Hunt. "Our drivers can communicate with friends and family from the cab, which is nice for them and their families."

Avis Group Holdings Inc., parent company of Avis Rental Car, has equipped its fleet of company-use-only cars with Internet access. Sales representatives can access information while on the road, and customers can rent a vehicle or report mileage to Avis through a wireless device, says Larry Kinder, CIO of Avis Group Holdings (see story, p. 306). As Avis expands its wireless access and connectivity, Kinder says the goal is to have a customer turn on a cell phone after departing from a flight, and, through global positioning, Avis will have a rental car ready and waiting for the customer.

USFreightways is using radio-frequency technology in its warehouses to maintain real-time inventory, and has 4,000 Nextel mobile phones deployed around the country, CIO Harvie says. Having a connection to its drivers adds value to what USFreightways can deliver to its customers, Harvie says, because "the information that we get from our drivers improves operational efficiency and allows us to give more accurate information to our customers."

Having wireless devices on trucks is important to supply-chain management, says AMR Research analyst Larry Lapide. Real-time information will let transportation managers re-route trucks when necessary and keep customers informed about the status of their deliveries.

Wireless technology can also help drivers when their trailers or containers are lost or stolen. "We can potentially lower our inventory of trailers and cut down on cost if we know at all times where they are and whether they're loaded or unloaded," says Brooks of J.B. Hunt.

J.B. Hunt is testing the use of wireless trailer tracking. Devices mounted on J.B. Hunt trucks use a global-positioning system to report daily on the location and capacity status of trailers. "When a trailer is taken to a retail warehouse and is unloaded, it becomes an available resource for us," Brooks says. Because there's no incentive for a customer to report back to J.B. Hunt that the trailer is empty, keeping track of capacity status through wireless applications is important to the transportation company, he adds.

Making the supply chain more visible by integrating with its customers' systems is the tactic that air-freight forwarder Danzas AEI Intercontinental uses to communicate with its customers. "We'll provide info to our customers about other suppliers, even though it involves competitors," says Eric Vargas, VP of customer projects at Danzas AEI. It's worth it to customers to be able to manage the data in their own supply chains efficiently by having Danzas AEI create a customized look into all the suppliers they use, Vargas says.

Managing multiple partnerships becomes even more complex for transportation companies as more begin to form and participate in electronic marketplaces. J.B. Hunt spun off its third-party logistics division into Transplace.com, an exchange that offers shippers and carriers the opportunity to combine their purchasing power to lower costs of items such as fuel, equipment, and repair parts.

Transplace.com is made up of six major transportation companies, including J.B. Hunt's competitors, but VP of application development Tracy Black says the exchange is actually helping the company attract new customers. "We're attracting large customers that were uneasy in the past about giving all of their business to one carrier because of large volume surges," Black says. Large customers didn't think J.B. Hunt had the resources to handle large shipments, but as a result of its participation in the exchange, "customers feel better about us being able to back each other up," Black says.

USFreightways participates in transportation exchanges as a provider, but CIO Harvie is skeptical about the profitability of exchanges. "Exchanges will become price-choppers as they sell the best carrier at the lowest price," he says, adding that the quality of service will be compromised as exchanges offer services at competitive rates to customers. "Our customers won't sacrifice service for a few dollars."

The next mile for transportation and logistics companies is to take the complexity out of global shipping. International shipping can be an arduous, paper-intensive process, Danzas AEI's Vargas says. That's why the company recently agreed to participate in the ClearCross Network, which connects customers with the information, shipping, and application sources needed to conduct business across U.S. borders. Using the ClearCross Network, Danzas AEI will provide companies with information on international shipping rates, routes, and transportation options.

Danzas AEI's online Global Resource Guide notifies customers of international regulations and document requirements in advance of a shipment to speed up the clearance process. "Shipments are dependent on the delivery of information," Vargas says. By providing proactive shipping management, Danzas AEI seeks to ensure customers that a "shipment never waits or is delayed because of insufficient or wrong data," he says.

Whatever approach transportation and logistics companies take to E-commerce, one thing is clear: Internet technologies have opened up a new world of services that these companies can offer. In the end, it's the customers who win.

Illustration by Jeffrey Fisher
Photograph by Timm Pott

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