If you want to understand trucking's Internet frenzy, just add up the numbers.
I have to confess that I'm not a numbers person. When I have to listen to a presentation or plow through an article that relies on numbers to make its point, I often don't get the point. Sometimes, though, the numbers are so overwhelming that even I find myself getting excited about them.
Take the hot topic of e-commerce over the Internet - numbers may be the only way to get a realistic appreciation of just how rapidly and how fundamentally this new technology is transforming the business of trucking. In 1997, the value of all U.S. business transactions over the Internet for freight and logistics service was $0; last year it was $60 million, and this year it will hit $630 million, according to the research firm Keenan Vision Inc. That's zero to 630 million in three years.
The numbers get even more astounding when you look at Keenan's near-term projections. By 2004, the research company sees freight and logistics transactions over the Internet surpassing $115 billion. Out of the 38 business-to-business and business-to-consumer categories it identifies, freight service transactions are predicted to be number three in Internet e-commerce, surpassed only by purchases of industrial supplies and computer equipment.
As for the transforming power of the Internet, the numbers are just as astounding. According to the same report, by 2004 $46 billion of those freight transactions will take place through market exchanges.
If Keenan's numbers prove to be even close to right, that represents one of the most significant changes ever in the way businesses purchase transportation services.
While any number expressed in the billions is bound to be impressive, there are some two- and three-digit Internet numbers that should also grab the attention of anyone involved in running or managing a truck fleet.
E-gistics, a new report on e-commerce and the supply chain released last month by the investment house Bear Stearns & Co., identifies by name some 250 companies already providing Internet-based freight and logistics services. Of those, 54 are freight exchanges or auctions with the lion's share (or, since we're talking numbers here, more precisely 33) offering truck transportation services.
If you're beginning to reel from all these numbers, you're not alone. The level of activity they represent is truly overwhelming, especially since they also bring with them a wholesale shift in the way the freight business is conducted.
But don't despair. As intimidating as this wave of new technology may seem, Bear Stearns offers a common sense conclusion that could easily be overlooked in the flood of numbers. Technology in this emerging marketplace will prove to be a commodity, they point out, while freight expertise will prove to be an invaluable resource. And no matter how you measure it, most fleets already have more than enough of that expertise.