Shake on it

E-commerce increases need for good relationships I don't believe there's a substitute for the relationship, the handshake, says Herbert Schmidt, president of Contract Freighters Inc. (CFI). The Internet can augment and complement good business relationships, but it can't replace them. Coming in this era of e-commerce, his remark is arresting somehow sounding both old-fashioned and radical at the same

E-commerce increases need for good relationships



I don't believe there's a substitute for the relationship, the handshake,” says Herbert Schmidt, president of Contract Freighters Inc. (CFI). “The Internet can augment and complement good business relationships, but it can't replace them.” Coming in this era of e-commerce, his remark is arresting — somehow sounding both old-fashioned and radical at the same time.

If you think about it as much as Schmidt clearly has, however, it also sounds true. In order to be successful, e-business requires that companies' boundaries and identities overlap and merge, that they divulge proprietary information, talk about costs instead of negotiating price, and freely share knowledge and expertise.

Fleets, for example, may manage inventory for a manufacturer's customers, or even handle some subassembly or finishing processes. They may assume responsibility for just-in-time, line-loaded delivery of parts to a factory, or perhaps take over a shipper's invoicing as a value-added service. Truck operators today often do double-duty as customer service representatives for the shipper and the carrier, while shippers may self-dispatch their core carriers' trucks.

Any problems with these tightly integrated operations are shared problems, in every sense of the word. Companies today are literally risking their customers on the integrity of their working partners as they strive together to leverage their combined assets and abilities to improve productivity.

This gigantic level of risk demands a correspondingly high level of communication and trust; one unparalleled even in the history of an industry as relationship-oriented as trucking. While technologies like the Internet can facilitate communication by linking companies together, trust remains an entirely human endeavor. Hence, Mr. Schmidt's insightful remark.

And he is not alone in his opinion. Rick Dryburgh, vp-sales & marketing for GoFreight.com, is convinced that personal relationships will be the foundation for successful online freight exchanges, not the automation itself, or even discounts. His company has structured its service to facilitate existing relationships, not dismantle them.

“Personal relationships are still the foundation of e-commerce transactions,” he explains. “You can't take out relationships and substitute repetition and expect success. It's just plain dangerous for a shipper to let his freight go to unknown carriers all the time, for instance,” Dryburgh warns. “What happens when he needs a truly extraordinary effort to meet one of his customer's needs? Those are the times you call on carriers you trust to get the job done, and trust requires a history of working together.”

“Freight transportation is not a commodity, and all carriers are not alike,” agrees Schmidt, “and that's another reason relationships remain so critical. Fleets have different equipment. They have different on-time records and safety ratings. That's why we tell our customers, ‘Don't compare the technology in our trucks, compare our service. Look at what we do.’”

What we do over time, of course, is the real bottom line, the thing that builds trust regardless of the technologies employed along the way. As the trucking industry rushes to replace old business models with new, technology-enabled processes, it's critical to remember that good relationships underpin success. And the decision of whether or not to nurture and maintain them is a deliberate choice still entirely in human hands. You can shake on it.

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