E-commerce & trucking

For trucking, the real impact of the Internet has little to do with shipment tracking.Most of us spend far more time thinking about how we're doing our jobs than thinking about what we're doing. We become so focused on the daily process that we develop a severe case of shortsightedness when it comes to identifying changes in the big picture. If you want a perfect example of this kind of planning myopia,

For trucking, the real impact of the Internet has little to do with shipment tracking.

Most of us spend far more time thinking about how we're doing our jobs than thinking about what we're doing. We become so focused on the daily process that we develop a severe case of shortsightedness when it comes to identifying changes in the big picture. If you want a perfect example of this kind of planning myopia, consider trucking's relationship with the Internet.

Most fleets that look at the Internet see it as a tool to improve customer service. Shipment tracking is, by far, the most common Internet concern among for-hire and even private fleets, followed by load matching, rate quotation, and driver recruitment. If you've implemented any of these Internet services, you probably consider your fleet to be at the forefront of Internet exploitation, and rightly so. But have you taken the time to consider the real implications of this technology on your fleet's continued success?

Here are some numbers that may help you develop a new perspective.

Dell, the company that sells custom-spec'd computers, is bringing in $10 million a day in sales revenues at its Web site. That's triple its on-line sales of a year ago and gives the company projected Internet revenues of $3.6 billion a year.

Analysts predict that this year's on-line Christmas sales will be double 1997's, and will include an unbelievable array of seasonal goods ranging from venison sausage to Christmas trees and their decorations.

The National Retail Federation says this year's sales over the Internet will approach $10 billion. Within the next three years, however, the group expects annual consumer sales to top $60 billion, while business-to-business Internet sales could reach $300 billion before the end of 1999.

So what does the rapid growth of Internet sales have to do with your fleet? The short answer is obvious -- the Internet is radically altering distribution patterns, displacing the familiar manufacturer-wholesaler-retailer-consumer chain with a sales channel that cuts out one or more of those links.

While it's clear that our distribution network will change, it's the details of the change that are still up in the air. And that should concern anyone responsible for the business health of a truck fleet.

For example, if consumers begin buying directly over the Internet, individual shipment numbers will climb dramatically, while density per shipment will plunge. In today's trucking environment, it's tough to make a profit on low density freight no matter how high the volume.

If you're in the for-hire side of the industry, are you willing to cede this new volume to UPS and the other package delivery operations, or is there someway you can change your operations to profit from this shift?

If you're responsible for a private fleet, the change has serious implications for your role in the supply chain as well as your place in your company's current wholesale and retail distribution functions.

The Internet is clearly changing the way goods are distributed. It's still up in the air how that change will transform trucking, but it will. Given the amount of money involved, someone in the industry is going to figure out a way to benefit from that change. But it won't be easy, and it won't come without a good dose of creative thinking.

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