l e a d i n g   e d g e   t r u c k i n g

BATTLE OF THE SUPER SITES

      First there was load matching. Then came freight auctions. Now comes the transportation community super sites, monster convoys of trucking services on the Internet.
      Among the players about to fight it out in cyberspace are CarrierPoint (www.carrierpoint.com), Logistics.com (www.logistics.com), Transportation.com (www.transportation.com) and Transplace.com (www.transplace.com). They may not be the only competitors in this newly evolving business category, but they are among the most visible at the moment.
      There are serious differences among them, but they do share certain characteristics: All provide online markets for trucking services. All offer an array of services designed to attract both carriers and shippers. And all are determined to be the dominant site of their kind.
      These super sites should not be confused with other entities popping up on the net like spring flowers, such as load-finding services (there are more than 60 now), sites that offer logistics services and straight buying cooperatives such as Truckers Co-op.com. The super sites offer these services and then some.
      It’s unlikely all the super sites will survive, but right now they all talk tough, each declaring its own invincibility and discounting the competitive power of the others. None are fully operational at the moment and most will begin with only a few of the services they promise down the line. But the breadth of those services is vast.
      Take Transportation.com opening shop in Overland Park, KS, also home of LTL giant Yellow Freight. That’s no coincidence according to Jim Ritchie, Transportation.com’s president and CEO. Transportation.com arose from Yellow computer projects in general and e-commerce in particular, he explained. Ritchie himself came from Ryder Integrated Logistics in Miami, FL, where he had been vice president.
      Backed by Yellow, two investment companies and lots of venture capital, Transportation.com will build its service around a real-time online market for carrier services, what some might call a freight auction. Ritchie admits some carriers are “suspicious” of such markets.
      “Typically, if you look under the covers, the shippers readily come to load matching sites and sign up,” said Ritchie. “It’s the carriers that feel somewhat threatened that they’re getting in a spot market and a spot buying environment. By having a content-rich site we think carriers are going to want to participate and ultimately shippers are going to benefit from that.”
      What will Transportation.com offer participating carriers?
      The site will offer news and information services, financing, credit reports, loans, tax counseling, insurance and various kinds of business advice. Participants will be able to buy, sell and trade used equipment online as well as locate hard-to-find parts. Ritchie said there will also be a buyers cooperative for virtually everything carriers use on a regular basis.
      Transportation.com will help control expenses, enhance efficiency and make carriers more competitive, said Ritchie.
      Depending on their level of participation, carriers will be provided with mobile communications equipment so shippers can track shipments through the site. Carriers will also be able to access sophisticated software Transportation.com will offer as a Application Service Provider. Small carriers will need no more than computer terminals with browser software and Internet connections.
      On the shipper side, Transportation.com will offer a genuine, flesh-and-blood logistics service to companies that would like to unload the entire transportation function.
      According to Ritchie, Transportation.com will aim squarely at small-to-medium-sized companies. “The big third-party logistics companies are looking for the big-ticket players, the Fortune-500 companies,” he said.
      Transportation.com is well funded and determined to succeed, said Ritchie, but it will be up against well-positioned contenders like Logistics.com of Burlington, MA, headed by Dr. Yossi Sheffi, director of the Center for Transportation Studies at the Massachusetts Institute of Technology.
      Sheffi founded a company called PTCG in 1988 to adapt research techniques to real business. Sabre, Inc., the airline reservations company, bought PTCG in 1996 to form the Sabre Logistics Group. Sheffi in turn bought Sabre Logistics last year and the company’s well-established optimization software will form the core of Logistics.com.
      Sheffi recently hired John P. Lanigan Jr., former chief operating officer of Schneider National Inc. to run the company. In a press conference Lanigan referred to Logistics.com as “a 13-year-old startup,” underlining the long-term relationships the company has with big shippers and carriers. Those relationships and the proven technology they’re based on gives Logistics.com a serious boost in the coming competition, he said.
      Logistics.com will provide a marketplace for both spot and long-term trucking deals. Lanigan explained the site will provide more than price comparisons, that carriers will be rated in various ways depending on a shippers needs.
      There are no plans for a buying cooperative or any other trucker-friendly add-ons. Logistics.com seeks to lure carriers with the opportunity to bid for business with the largest shippers in the country. Smaller carriers will also have access over the Internet to sophisticated operations software many big shippers require.
      Perhaps the biggest splash in the super site pool came in a March 14 press conference announcing the creation of Transplace.com, an Internet-centered logistics company created by six major truckload carriers, Covenant Transport Inc., Chattanooga, TN; J.B. Hunt Transport Services Inc., Lowell, AR; M.S. Carriers Inc., Memphis, TN; Swift Transportation Co. Inc., Phoenix, AZ; U.S. Xpress Enterprises Inc., Chattanooga, TN; and Werner Enterprises Inc., Omaha, NE.
      Transplace.com, is headquartered in Dallas, with Dr. Jun-Sheng Li as president and CEO. Li formerly led J.B. Hunt Logistics, where he developed sophisticated optimization and e-commerce systems. The new company combines and replaces the six separate carrier logistics operations which billed a total of $650 million in 1999. But the impact of the six-carrier venture might be better represented by some other numbers.
      Transplace partners operate a total of 38,264 tractors, 91,531 trailers and 22,152 intermodal containers. They employ 47,981 drivers. Combined 1998 revenue for the six carriers topped $5.6 billion. The figure would rank it behind UPS and Fedex as the third largest trucking entity in the U.S.
      Transplace.com will eventually involve many other carriers and provide cooperative buying and other member benefits. Carriers will have to qualify for membership, but there will be no size requirement. Presumably even owner-operators could join if they meet other criteria.
      The exact nature and extent of cooperation among the six founding fleets is unclear. However, the unusual combination could draw the attention of antitrust watchdogs. Meanwhile, it is likely to draw considerable shipper interest. That in turn could attract the many small carriers Transplace.com claims it will eventually serve with a variety of online offerings.
      The differences among these super site contenders may be enough to permit all to survive, at least for a while. On the other hand, the Internet has smiled on players that first create a market then dominate it by sheer scale. The popular auction site eBay is one example.
      As of now, the super site contenders all intend to be the survivor and the market of choice. As Logistics.com’s Dr. Sheffi said, perhaps only partly in jest: “Just like everybody else, we feel that we will rule the universe. It’s only a question of when.”