If books, records, or groceries sell on the Internet, why not trucks, repair parts, or trucking services, so says the reasoning behind a spate of new Internet firms. In recent months, a wide assortment of dot.com companies has emerged to serve motor carriers. The earliest, which were freight auction sites, are giving way to enterprises that seek to pool the purchasing power of small and medium carriers, giving them collectively the economies of scale already in place at their much larger competitors.
A few of the web sites dedicated to serving motor carriers are already running. Others have test sites operating, and others are still seeking financing and are under development. Rather than tour the sites, which are probably best evaluated by actual use, we decided to give executives with three of these startup companies an opportunity to describe their operations. The three sites selected are TruckersB2B.com (www.truckersb2b.com), a buying cooperative for fuel, tires, trailers, and other equipment formed in February 2000; Transportal Network, found at www.transportalnetwork.com, a collaborative network of carriers, shippers, and vendors designed to optimize freight handling, logistics, and purchasing; and TruckBay, a site dedicated to purchasing parts and service for fleets. TruckBay can be visited at www.truckbay.com.
www.truckersb2b.com TruckersB2B.com is a membership site representing more than 5,300 companies that operate more than 206,000 vehicles. The purpose of the site is to provide the buying power of the truly large fleets to smaller trucking companies and private fleets, says Dan Frieden, vice-president, vendor relations for TruckersB2B. This buying power comes from leveraging the number of vehicles represented by company membership against prenegotiated savings for fuel, tires, trailers, and other fleet supplies.
Although TruckersB2B is a membership company, it currently charges no fees for membership and says that if fees become necessary, the imposition will be announced well in advance of the effective date. Members benefit in two ways, Frieden says. The first saving comes with point-of-sale discounts on many products and services. The second saving takes the form of rebates. For instance, TruckersB2B tracks member fuel purchases and issues a monthly rebate.
Taking advantage of technology can't hurt, but if it doesn't make money or if it doesn't save money, customers will not use it, Frieden says. At TruckersB2B, membership has no initiation fee or monthly dues. Company revenue comes from participating in the savings available to members. By some estimates, the site can save members $200 per truck per year, he says. Vendors find the program attractive, because it allows them to expand market share among smaller fleets, which are the most difficult to reach with traditional sales and marketing strategies, he says.
www.transportalnetwork.com When anybody in the transportation industry besides a carrier talks about driving costs out of the system, that statement actually translates to a desire to reduce freight rates, says Lana Batts, executive vice-president and chief development officer for Transportal Network. The company was formed in November 1999 as an effort between AmeriCold Logistics and Mercer Management to find additional ways to move freight for AmeriCold. It has evolved to a network of companies intent on improving the operating ratio for motor carriers, reducing the price of fuel, increasing loaded miles and driver productivity, optimizing fleet utilization, and providing discounts on tractors, insurance, and other equipment and services.
Refrigerated trucking is a highly fragmented industry that results in excess miles for smaller carriers. The issue is not filling empty miles, Batts says. It is finding ways to avoid empty miles. Transportal Network will begin providing this solution early in 2001. It is based on the fact that motor carriers broker off an average of 15% of their freight. If these brokered loads can be matched with carriers that regularly serve the lanes in question, both the brokering carrier and the carrier that actually hauls the load will improve their operations.
Transportal Network is focused on truckload carriers, specifically in the refrigerated, flatbed, and dry van categories, Batts says. The only way to maintain this focus is refusal for a company like Transportal Network to compete with its members. That means the company cannot own trucks, and it cannot come between the shipper and the carrier by operating a site that is little more than a freight auction, she says.
Batts describes Transportal Network as a company that provides vertical support services to all members by offering pooled purchasing for tractors, trailers, tires, fuel, lubrication products, batteries, and insurance. It also will arrange lumping, contract receiving, local cartage, and warehouse spotting services. Coopera-tive purchasing began in August 2000. As a horizontal support network among members, the company will reduce empty miles by circulating capacity and load information between carriers, help carriers increase driver miles and reduce waiting time, and optimize fuel purchasing by recommending the lowest cost fuel stops. Optimization services are due to begin early in 2001.
www.truckbay.com The dot.com companies seeking to serve trucking are just as diverse as the trucking industry, says Marilyn Marks, chairman and CEO of TruckBay. It is an electronic marketplace that seeks to provide a single location where the highly fragmented trucking industry and the almost equally fragmented supplier groups can buy and sell the good, services, and information necessary for them to run. The function of TruckBay is to bypass the multiple layers of distribution for trucking goods and services, and remove the associated carrying costs from the purchase price.
TruckBay offers a single location to shop for all service parts. With an online parts catalog, TruckBay can provide a cross reference between various parts vendors as well as information about alternative "will-fit" parts from aftermarket suppliers. As the company gets started, it is concentrating on procurement of parts, acting as a virtual parts distributor for all vendors who wish to participate, Marks says.
Reducing the price of heavy truck parts to purchasers offers the potential for huge savings. On any given day, the total national inventory of parts is worth an average of $6 billion, Marks says. That is inventory subject to carrying costs actually sitting on shelves. Reducing that inventory by moving it to sale rapidly has the potential for great savings without considering the markup applied to those parts as they move through the distribution chain. Marks says that the average manufacturer margin is 15%, and distributors and dealers each add another 15%.
TruckBay can save its users 8% to 30% on parts and 10% to 20% on supplies, Marks says. The combined purchasing power of small trucking operations buying through a single source counts, she says, because business does not recognize level playing fields.
QRS eLink Enables Business QRS Corp offers its new QRS eLink, an Internet messaging service that enables business partners to conduct e-commerce over the Internet. This service combines the power, ease, and access of the Internet with speed, security, and reliability usually associated with traditional value-added networks (VANs).
A fully managed Internet messaging service, eLink offers data transformation, transport, and security. Data transformation supports any-to-any mapping including traditional EDI standards, XML, and proprietary formats. It can also be used to connect to other VANs. This service enables companies of any size and IT structure to use the Internet to exchange business data.
Connectivity to eLink is enabled by QRS EasyAccess software, which supports any network and protocol format. With web-based software deployment and account set-up, a trading partner can be enabled within two to three days.
Prophesy Unveils Multi-Post Prophesy Transportation Software announces the launch of Prophesy Multi-Post, a free service that allows users to enter available truck or load information once, at the mile.com site, and with a mouse click send the information to many load-matching sites such as DAT, GetLoaded.com, and Internet Truckstop. Prophesy Multi-Post eliminates the need to locate each load-posting site, and repost the same information repeatedly for each service.
New partner sites will be added to maximize the convenience and scope of this service. This network of sites is designed to enable users to transmit and edit posts of available trucks or loads from a single site. While Prophesy Multi-Post is free, users must register with the load-matching sites on which they plan to post for the service to be effective.
Truck Tire B2B Site Launched TrucktireXchange.com has launched a business-to-business site it says will help an estimated 4,500 independent tire dealers and more than 75 distributors in the United States and Canada streamline locating, purchasing, and selling new and retread truck tires.
Besides housing available inventory data and existing inventory requests, TrucktireXchange.com provides market reports on topics such as pricing, market forecasting, product movement, and unfilled inventory. Members of the site can access available inventory, post their own available inventory, post tires wanted, track the market, and oversee their own purchases via the Internet.
Purchases are made via a straight sale or auction. Membership to TrucktireXchange.com is free and can be obtained by logging onto the site to fill out profile information. The seller pays a 3% fee per transaction.
