HDT asked two carriers to explain what the Internet means to their operations in late 2004.
JUST IN TIME
Express Carriers of San Antonio, Texas, serves automobile manufacturers carrying assembly line parts through the U.S., Canada and Mexico. The company's customers are the big three auto makers - GM, Ford and DaimlerChrysler - and their suppliers. The owner-operator fleet of 250 units must meet the intense pickup and delivery demands of a just-in-time industry.
"We cannot shut a plant down. Our goal in life is to keep everything rolling," said Jerry Meunier (pronounced moon-yay), Express Carriers' management information systems director.
"We do a lot of standard EDI (Electronic Data Interchange) and we depend on our web site for the plants to be able to track and see things coming in," he said.
Express Carriers units are equipped with Qualcomm's OmniTRACS satellite mobilecom systems that provide driver-dispatch messaging and hourly GPS position reports. Those reports are captured by Express Carriers' enterprise software system. Express Carriers has been using Tom McLeod Software of Birmingham, Ala., since 1999. One of the modules they use is McLeod's Internet application.
"It was a customer that demanded we have this capability, and it was a fairly large customer at the time," Meunier said. "They said they wanted to be able to track loads. It was a hefty investment on our part, but it paid off."
Express Carrier customers track their inbound or outbound loads using the Internet; they no longer have to call dispatchers.
"McLeod has done all of our web development; they actually host our web site in Birmingham," Meunier said.
"We've got an Internet link, a pipeline to that server. When a person logs into our web site they're actually logging into the Birmingham server, and when they request data it actually gets pulled from our data here in San Antonio."
Customers can also access essential documents on the site.
"They need delivery receipts and other paperwork. We have an imaging product. We scan bills of lading and the customer can pull up the image on the web."
Meunier said the company is looking into third-party truckstop scanning.
Approximately 75% of Express Carriers' customers use their site for tracking only; about 25% also use it to access paperwork.
According to Meunier, the web site has become a sales tool. "All our outside salesmen - we have three in Mexico - are able to show customers that, yes, you can do tracking; you don't have to call dispatch."
Mexican suppliers in particular use the site heavily. Meunier said the site gets 46,000 hits a month, many of them from south of the border.
"Our web site is www.fjkllc.com. That stands for Forrest J. Kaupert Limited Liability Corp. doing business as Express Carriers."
The family-owned company was founded in 1995 by Forrest J. Kaupert Sr. Three generations of Kauperts hold executive positions in the company.
KEEPING IT SIMPLE
According to Meunier, Express Carriers' web site is deliberately simple and text-based to provide quick downloads.
"It was brought to our attention during the development stage that we've got customers in Mexico and they don't have DSL. They have dialup. When I set a new customer up, I ask what kind of connection they have. I have the option to turn their site access to text only," he explained.
"Another part of the web site that has just come on board is driver management, which allows applications to be submitted by drivers. We just got that online in August," Meunier said.
That's a lot of Express Carrier data on the Internet, but it's just part of the picture.
"We also do traditional EDI over the Internet through Kleinschmidt," Meunier said. Kleinschmidt is a VAN, or value added network, that processes EDI communications among shippers, consignees and carriers.
"T-Check is our fuel card provider. We've got real-time data coming in. When a driver swipes a card, within two minutes, it's already in our McLeod system."
Express Carriers also relies on the Internet for internal communications. The main office in San Antonio, a terminal 30 miles south and a terminal in Laredo are all connected.
"They all funnel through here and go out to the Internet through this main office firewall and T-1 line, so I have control," Meunier said.
A terminal in Toledo is another matter.
"Everything is done over the Internet for Toledo. It's a one-man shop and we have a yard there. That's our Canadian link. A Canadian carrier comes in grabs our trailer and takes it across the border to the Canadian plants," Meunier said.
The Toledo terminal is connected to the Internet with a DSL, or digital subscriber line, from the local phone company.
"We even have IP (Internet Protocol) phones that we run over the Internet. They're in the owner's house and in our Toledo office. We use an Inter-Tel phone system here. It's just like an intercom."
Express Carriers also relies on more common Internet services. Virtually everyone in the offices has an Internet connection and all use e-mail.
"It's started out primarily with the owners using e-mail, but then it became customer driven. Spam is our biggest problem," said Meunier.
To help deal with it, Meunier abandoned the company's own e-mail server.
"We farmed that out to a local company here in San Antonio. I get unlimited e-mail boxes for under $100 a month, and they've got a spam filter," he said.
It has taken only four years for Express Carriers to become more or less Internet-dependent.
"We cannot do business without the Internet," Meunier said. "When I came here in 2000 we only had dialup. In this time frame we went from dialup to a DSL circuit and now we're on a full T-1 on the Internet."
ALTERNATIVE CHANNEL
The Internet is vital for Schneider.
According to George Grossardt that means both Schneider Logistics and Schneider National, the nation's largest truckload fleet. Grossardt is VP, alliance services for Schneider Logistics. He is responsible for procuring outside carrier and warehousing services for the Green Bay, Wis., logistics and truckload giant.
"It's an alternative channel for communication, an effective, low-cost alternative. It's embedded in our processes. It's part of the way we do business and there are certain parts of our business that simply wouldn't operate without it," he said.
For example, much of Schneider's business is carried on by e-mail, "If I just look at volume, e-mail is far and away much more significant than phone," said Grossardt.
Track and trace capability has become an entry-level product for carriers, according to Grossardt. Schneider customers use the Internet to access Schneider's system, search for and find their loads in transit. Exception-based reporting enables Schneider to alert customers over the Internet of problems - delays or shortages, for example - with alerts through the track and trace program or by e-mail.
Schneider customers without EDI capabilities can send a common Microsoft Excel file that is read by the Schneider system as an EDI order. That makes things easier for the customer and for Schneider, since no one has to key data into the system.
Invoice transmittal and status can be checked on the Internet, something that's helpful to carriers contracted to Schneider.
Schneider runs its own Internet load board as well as posting loads on commercial load boards. The company's brokerage arm posts available freight along with special requirements and other essential information.
"We use the Internet for report distribution to our customers and we take it one step further than static report generation. We layer the Cognos tool on top of it," Grossardt said.
Cognos is a technology company that provides software to retrieve information from various databases and create reports on multiple levels.
"Via the Internet, you can slice and dice, dissect data down to a very granular level or keep it up high and visualize it using 3D graphics. So it allows a person to quickly find problem areas or highlight areas."
The Internet as a means of communication is integral to a number of Schneider business processes.
"We use a tool we've developed called SUMIT CVA," Grossardt said.
"CVA stands for combined value auction. It's a method to buy large volumes of transportation in a contract environment, not a spot environment.
The system was introduced in 2002 and has been a success for Schneider.
"Clients are looking for contracted carriers with commitments. We look at a client's freight; we build a database around the freight, the volume, the specific lanes and then we send that to the carriers with an electronic workbook transmitted via the Internet.
"(A carrier) can bid at a lane level on each one of the lanes at whatever price points they want to, and they can also create bundles."
What's a bundle?
"A carrier might say, I can give you a buck a lane for items A, B or C. But I'm willing to go to 98 cents if I get all three. That's a bundle," Grossardt explained.
The process allows carriers to place conditions on a bid.
"For example, a carrier might say I'll take lane A or B or C, but I can't do all three. So here's your price for A, here's your price for B, here's your price for C. You determine what the best match is, but I can't take all three.
"The carrier submits the workbook once it's filled out and we put it through a rating engine, an algorithm that looks at all the possible combinations and options. We then provide the carrier community with the leading price. We also tell the carriers if it was part of a bundle or not.
"Then they have a decision: Do they want to modify their price or not? They don't have to. We go through a series of rounds to come up with a solution; that solution is what we execute."
The Internet facilitates the exchange of information required by the process. Shippers that have used Schneider's SUMMIT CVA include Caterpillar, CNH Corp., Ford Customer Service Division, General Motors, Ocean Spray Cranberries, Pasadena Paper, SCA Tissue and World Kitchen, among others.
COLLABORATIVE VISIBILITY
A more recent Schneider tool that makes extensive use of the Internet is SUMIT CVN, introduced last year. CVN stands for collaborative visibility network. The application places Schneider squarely into the relationship between purchaser and supplier.
"We connect the supply base, the carrier base and the manufacturing base all over the Internet," Grossardt said.
"It ties the procurement organization to the organization supplying the material as well as to the third-party logistics provider and the carrier. It allows those parties to look at what the original request was from the manufacturer and how the supplier is performing. It allows changes via the Internet so the securing organization knows if they're going to hit the requirement. Then it gets into the transportation management process that we take care of.
"For example, GM cuts an invoice to a supplier that says, look, I need 100 of these widgets and 300 of these widgets and 500 of those widgets and I want you to ship those next Wednesday for delivery at my processing center on Friday. That happens in advance. We intercept that message, we create an Internet transaction. The supplier now has to go into and confirm receipt of that request. They also have the ability to modify that request," Grossardt said.
"Let's say they don't have enough of the widgets or don't anticipate having enough. They can put a modification in that notifies not only us, but also the procuring organization, that there is an exception to the request. Maybe it's interesting to them, maybe it isn't. But it alerts them there's a deviation.
"Now it's actually date of shipment. Maybe I couldn't manufacture enough of those widgets. I then put in another deviation. Again, the procurement organization and the manufacturer know about it. It means visibility much earlier than they've historically had, they have been able to reduce their working capital, their inventory as a result."
Isn't that what EDI is supposed to do?
"Everybody talks through EDI," Grossardt explained. "But historically - though everybody has the best intentions - the receiving organization doesn't find out that there's been a change until the truck shows up at the receiving dock. So they roll up the doors and say, now what?"
According to Grossardt, there are a couple of thousand suppliers already connected through SUMIT CVN.
"We're pretty pleased with it and we're making investments in the technology," he said.
Schneider uses an intranet for internal communications. Intranet is simply a private network on the Internet accessible by log-on and password.
"All of our forms are online via the intranet, all manuals are online via the intranet. We have migrated away from paper," Grossardt said. "The Internet is here to stay," he concluded. "It's part of the way we do business."
IT Solutions continued
