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Logistics & Transportation:
Happy Employees Part And Parcel Of The Job

By keeping workers satisfied, companies ensure uninterrupted customer service
The transportation and logistics industry was hard hit after the attacks of Sept. 11. Once the unprecedented travel bans were removed, security got tighter, and then came the anthrax scare. Challenging doesn't begin to describe the new world that transportation and logistics companies and their employees faced. Not unexpectedly, they turned to IT.

While FedEx Corp.'s 664 aircraft sat idle for 50 hours after the attacks, the shipper used proprietary legacy software that integrates its transportation networks to shunt critical packages to road and rail modes.

After last September, shipping company Yellow Corp. wanted to make the buying experience easier for its customers, so it developed Myyellow.com, a self-service Web site that helps customers expedite their orders. The site, in turn, frees Yellow's service representatives to sell. They look at incoming orders and call customers to suggest service upgrades, says Mike Smid, an executive VP at Yellow. The call-center reps "have the visibility to upgrade shipments," he says.

Perhaps surprisingly, there's an unconscious symbiotic relationship forming between transportation-company employees and their customers. Having more-satisfied employees can result in having more customers who feel satisfied.

To that end, American Airlines, part of AMR Corp., has invested in better information sharing among its employees. In October, American launched Jetnet, an employee portal that reduces confusion by replacing several departmental intranets. Besides giving employees access to their up-to-the-minute personnel data, Jetnet shows workers daily business metrics such as load factors and on-time performance. The goal is to encourage greater team spirit among employees by showing them how the company's doing.

The consequences of a dissatisfied staff can be profound. Just the worry that there would be a strike at United Parcel Service of America Inc. earlier this year put a kink in UPS's business flow. "Brown," as the company is marketing itself nowadays, saw its average daily volume for the first six months of the year drop 2%, compared with the same period last year because of customer uncertainty.

IT can't take the uncertainty out of an unforeseeable future, but transportation and logistics companies are using technology to at least mitigate the gray areas.

INDUSTRY LEADERS
RankCompanyRevenue in millionsIncome (loss)
in millions
IT
employees
4American Airlines Inc.$18,963($1,762)260
8Yellow Corp.$3,277$15355
25Danzas AEI Intercontinental$9,153$159850
36Schneider National Inc.355
38FedEx Corp.$20,607$7105,378
56APL Ltd.$4,737($57)667
83Menlo Worldwide$2,900655
108Ryder System Inc.$5,006$19480
119Roadway Express Inc.$2,792$31148
120United Parcel Service of America Inc.$30,646$2,3995,000
142 Continental Airlines Inc. $8,969 ($95)1,100
182 ABF Freight System $1,282 $79 200
190 Union Pacific Corp. $11,973 $966 1,740
207 North American Van Lines $2,250 --136
231 Burlington Northern Santa Fe Corp. $9,208 $731 525
250 Penske Truck Leasing Inc. ----305
277 Alaska Airlines Inc. $2,141 ($40)245
287 UniGroup Inc. ----215
302 Delta Air Lines Inc. $13,879 ($1,027)2,010
313 United Airlines $16,138 ($2,145)1,465
322 Con-Way Transportation Services Inc. $1,900 --257
328 Landstar System Inc. $1,393 $43 142
377 CSX Corp. $8,110 $293 580
396 Consolidated Freightways Corp. $2,238 ($104)115
408 GATX Rail$1,489 $173 90
417 Airborne Inc. $3,211 ($20)567
436 Stolt-Nielsen Transportation Group Ltd. $2,678 $24 60
457 Watkins Associated Industries ----103
495 Alexander & Baldwin Inc. $1,190 $111 7
Financial data is from public sources and company supplied.
Revenue is for latest fiscal year.
Employee data is from InformationWeek 500 qualifying survey.

IN A NUTSHELL
INSIDE COMPANIES
Average portion of revenue spent on IT5%
Companies providing customized solutions to customers52%
Companies seeking IT patents, trademarks, or copyrights29%
HOW COMPANIES DIVIDE THEIR I.T. BUDGETS
Hardware purchases20%
Services or outsourcing18%
Research and development4%
Salaries and benefits32%
Applications17%
Everything else9%
INDUSTRY FINANCIALS
Average year-over-year revenue change2.6%
Average year-over-year net income change-98.1%
DATA: InformationWeek research
See year-over-year shifts in business-technology practices for this industry. Compare and contrast this year's data with last year's.

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Sara Peters, Editor-in-Chief, InformationWeek / Network Computing
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Salvatore Salamone, Managing Editor, Network Computing