Opinion: Finding the True Value of the Internet

By Joe Agliozzo

hief Executive Officer of Cyntric Inc.

It seems that transportation today is constantly bombarded with the same three words — Internet, Internet, Internet. While the advantages of the latest logistics-enabling Dot.com are extolled throughout the press, shippers have yet to discover the real advantage in making a commitment to the Internet space.

While not the last non-Internet bastion, the industry is still searching for the real value of the Internet. The attitude seems to be, if it isn’t broke, why fix it? Demand will drive supply, right? As a business steeped in tradition, trucking seems to be built on a network of relationships that defy automation.

But the Internet does not change existing relationships or methods that work. What the Internet does do is improve overall efficiency and extend business models. The adoption of the Internet within a trucking operation depends on the close participation of related vertical industries. Of course, the Internet offers load-matching, spot markets and even a few aggregating co-ops for buying tires, fuel and the like. But this is not where the intrinsic value of the Internet is found. The practical application of the Internet should be expanded to improve the communication process as well as the reliability and availability of information.

The Internet obviously provides an efficient means of communication. But the value of the Internet should reach beyond simply facilitating the process. In the transportation industry, carriers have equipment availability in certain markets and at certain times. When access to the carriers’ equipment is needed, transportation coordinators have to manually call or fax their way through an extensive customer list or database to fill the load. Alternatively, they use fax posting, such as DAT’s satellite terminals, which provide load posting and matching through that company’s proprietary terminals. But even this 30-year-old tradition, tied as it is to its truck stop terminals, is branching into the Internet.

Many shippers today make use of load-matching services, some of which are already on the Internet. So far, however, the Internet has simply taken traditional load-posting services off the fax and loaded them onto the Internet, adding little information and no qualification process. The actual load matching is still taken offline to be completed manually.

The value potential of improved communication and collaboration with trading partners — the ability to be part of an Internet platform that will remain at the forefront of technology evolution without having to create that platform internally at a prohibitively high cost — is huge.

Through the Internet, information reliability increases exponentially. Although initial information is only as reliable as the data entered, when information, or a database, is subject to a wider audience the static content improves over time. An additional benefit to Internet use is the improved reliability of transactional information. This improvement takes place because the data are less subject to human error through increased process automation.

The Internet also enables the efficient, integrated transfer of information. Today, hundreds of thousands of individuals are entering similar or identical information from the telephone or fax into their own company’s proprietary database. The industry needs to break down the barrier of fear of competition and realize the huge value of entering information only once. Transferring industry-pertinent information into a shared legacy system and Internet database implies enormous cost and time savings. In comparable industries, the proliferation of supply chain management has opened up systems, removed barriers and closed networks, allowing businesses to collaborate more effectively as a result.

The Internet holds the key to immediate availability of data retained in a centralized fashion instead of constantly reinventing the wheel. Shared information means shared overhead. Instead of six data entry or shipping clerks in each of hundreds of trucking companies nationwide performing credit checks on the same customers, comprehensive existing information would be available immediately, and reliably, through the Internet.

An Internet strategy for the transportation and logistics industry would ideally level the playing field for small and mid-sized businesses, thereby increasing competition in the marketplace. It would create new markets with no boundaries while enhancing overall efficiency and supply chain management. A California shipper looks at his warehouse inventory and sees that his salesperson has just made a sale to a customer in Georgia. The shipper communicates the order to a carrier and secures a commitment. The only difference from current practice is that the Internet should provide the means to automate the communications step through a linked customer management logistical system. In this scenario, the Internet can be viewed as a collaborative tool, co-managing the shipper’s inventory.

An Internet logistics service that complements the current transportation workflow, enhances communications channels, and improves the flow of information to qualify carriers and customers and shippers is sorely needed. Such a service would have the ability to retain critical information as a basis to form lasting partnerships over the Internet and create new opportunities industry-wide. In the end, all of these enhancing elements converge at the end of the rainbow to help the trucking industry reap the advantages of everything the Internet really has to offer.

Mr. Agliozzo is chief executive officer of Cyntric Inc., which develops automated Internet applications, located in San Mateo, Calif.