Recently, I was asked to speak at a logistics and shipping conference held in Chicago. Prior to my presentation, I asked the audience the burning question, Five years ago, how many of your companies were using the Internet or Web tools for a logistics purpose? Out of close to 100 attendees, none raised their hands. When asked about Internet use as of two years ago, only six companies showed their hands. And when I asked how many companies are currently using the Internet and Web tools for logistics purposes, nearly 100% said they were using the Internet and carrier Web sites for both tracking and sending delivery information via e-mail. Another 5% of the attendees mentioned using the Internet for more complex logistics applications.
Although that itself may not be surprising, it was surprising to see what sites and tools these companies were using. My final question was Who uses the Internet to link buyers, suppliers, carriers, their billing processes and other logistics features together? The unanimous answer was No one! However, many of them were attending this convention in Chicago to look for ideas and the best options for doing so.
In only two short years, a technological tidal wave has hit the logistics industry. Five years ago, the Internet was a less than mainstream option. Two years ago, the accessibility of the Internet was a luxury, and even some of the largest companies in America were still hesitant to take advantage of it. Almost overnight, the advances and technological changes with Web-based shipping tools have changed the way companies run their operations and distribute their products.
Think back about four or five years; how many of you were using the Internet or Web tools to run your company? Not many. When asked the same question today, nearly 100% of the companies we consult would say the Internet and new Web-based shipping tools have played an important role in their companys operation. From carrier Web sites to third-party Web portals, the Internet and all of its tools have become the catalyst for what is sure to be known as the fastest changing, single source of operation efficiencies and cost reductions in history.
Bettering the Logistics Process
With the rapid advances in shipping technology, many great ideas have sprung up to change the logistics landscape, from electronic auditing firms and application service providers (ASP) to procurement service providers and third-party shipping systems. More and more companies are coming up with Internet and Web-based ideas aimed at making the logistics process more efficient and cost effective for both users and carriers.
The only problem with all this new technology in the marketplace today is trying to figure out who has the right Web tools to solve your companys unique logistics problems. Before you engage in an electronic Internet-based auditing company, a third-party shipping solutions firm, an ASP or a Web-based procurement software solutions firm, identify internal hot buttons or the internal business practices that create the greatest inefficiencies.
The first area we recommend companies focus on is procurement. Many firms in the past have neglected to look at procurement as an area where the Internet and new Web tools can play a major role in creating efficiencies and cost reductions because it never seemed to be a problem. ProfitMarks thesupplychain.com is a good example of a dot-com company using the Web to help small- to medium-sized companies with its procurement process.
Using the Internet to link buyers, suppliers, expedited carriers, routing guides and billing systems together seems too far into the future for most companies to even consider the financial and operational benefits they may bring, but they are definitely available.
Events Leading to Change
History always remembers the events leading to change such as the invention of the automobile, the development of the internal combustion engine and the information super-highway and how they all had an impact on the world. The Cold War was an event that positively influenced technology. The spin-offs of lasers, communications technology as well as computers was enormous. Similarly, the current technology race between FedEx and UPS has spurred a revolution in shipping automation and Web technology that has spilled over to many other fields of logistics. Billions of dollars have been invested by both FedEx and UPS to develop state-of-the-art Web sites, shipping systems, EDI billing, handheld courier scanners and many other customer-carrier applications.
The winner of this carrier technology race is still to be determined. I believe the true winner in this technology supremacy race is not going to be FedEx or UPS but the shipping industry in general. Every company in America has benefited, whether it be directly or indirectly, from these carriers and their billion dollar investments in technology.
An Industry with Endless Possibilities
We live in a world where instant information is no longer a luxury it is a necessity. Dont be afraid to look into the future. Check out the technology of today and imagine the possibilities of tomorrow.
The following Web sites are some examples that are invaluable to our ever-evolving industry: www.thesupplychain.com, www.shippingrefunds.com and www.accuship.com. These are only a few of the resources literally at your fingertips.
One last note: when the arms race of the last millennium ended, the world and all her people were winners. When FedEx, UPS and Internet innovators started their own technological race for supremacy, the world won again. Thanks, FedEx and UPS. Your race to be the best is a major reason why logistics technology is where it is today! Let the race continue!
Mike Erickson is president/CEO of Air Freight Management Services, Inc. (AFMS). He founded AFMS in 1991 after spending many years with Airborne Express as a district manager. For more information, please visit www.afms.com.
