For all the advancements that information technology has provided the logistics and transportation industry in recent years, it seems that shippers still aren't satisfied. It's not that suppliers haven't kept pace with shippers' demands, part of the reason lies in the emergence of increasingly complex supply chains.

"Our customers are asking for enhanced shipment visibility and improved collaboration among the various players in the supply chain," remarks Debbie Hess, marketing manager for Roadway Express. Fortunately, suppliers already have a lot of the information customers need. The challenge, explains Hess, is in making the data more easily accessible to customers as well as to other suppliers along the supply chain. "This requires all of us to make investments in our systems," she says.

Seamless Integration? Not Quite

Spending money on upgrading systems is one matter. Achieving seamless integration is another. Ron Reuben, Danzas AEI's technical advisor for import brokerage, points out that sometimes there are three or four systems within a single company.

"The customs brokerage department is using one system, but the air freight department may be using something different," he notes. The disparities are magnified when different companies try to communicate with each other across the supply chain. Although there have been remarkable advancements in standardization and in finding a common platform, a lot of work remains to be done.

"We're still trying to master our own technology," says Reuben. He believes that e-commerce is still very much in the beginning stages. "We're searching for a major plateau, but we haven't hit it yet."

While suppliers continue to look for ways to leverage the internet and provide more value to shippers, they've also recognized the importance of partnering with others.

"Merger activity is occurring throughout many industries, not just in the logistics and transportation sector," says Reuben. "Take, for instance, the mergers between Time Warner and AOL, and Disney and ABC. Both created media and entertainment conglomerates that have extensive power and control." This is not to say that mergers are either exclusively good or bad. Rather, it's become a strategy that many companies are adopting to stay competitive and attract and retain customers.

If You Can't Beat 'Em, Join 'Em

Two years ago, Deutsche Post acquired AEI, which was later integrated in Deutsche Post's logistics division, Danzas, to become Danzas AEI. According to Eric S. Vargas, vice president customer projects, Danzas AEI Intercontinental, "We are now part of a very cohesive e-strategy focused on delivering e-services in e-mail, B2C transactions, B2B transactions, and e-banking. Specifically for Danzas, whose focus is on the B2B environment, we must be e-enabled across all our roles within the supply chain. This means being technically capable on the front end, middle, and back end of transactions."

During his presentation earlier this year at Air Cargo Infotech 2001, Vargas explained that Danzas AEI has developed its e-business model dividing a typical transaction into two segments: the quote process and the fulfillment process.

The quote process includes an analysis of the transaction for regulatory compliance, analyzing the request to determine landed cost, and recommending routes and carriers.

The fulfillment process, which occurs after a bid for services is accepted, includes managing the flow of orders, transportation, customs clearance, and warehousing.

Vargas says the process draws on Danzas AEI's core competencies and it is a business imperative that his company e-enables these services so data flow can be used in a collaborative environment. "Together, the quote process and fulfillment process will work seamlessly and in real time so that data visibility for answers to key questions can happen on-line and keep pace with the rapid pace of today's e-business demands."

Meanwhile, UPS's acquisition of Fritz Companies earlier this year created yet another giant in the logistics and transportation industry. The acquisition was significant in terms of the expansive network that was consequently created. UPS is the largest express carrier and largest package-delivery company in the world, and Fritz Companies is the world's leading freight-forwarding, customs-brokerage, and logistics firm.

"This acquisition enhances UPS's strategy by providing comprehensive solutions across the supply chain at any point our customers desire, moving goods of any size, by any mode, anywhere in the world," states Joe Pyne, UPS senior vice president for corporate development. "This expands our flexibility to offer a broader portfolio of services, including air, ground, and ocean freight, to our global customer base."

While the merger and acquisition activity that has prevailed in the logistics and transportation industry in the past few years has given shippers an array of tools to better manage their supply chains, there are still some kinks in the chain. For instance, Danzas AEI's Vargas also noted during the Air Cargo Infotech 2001 trade show that a survey of large global shippers conducted by Forrester Research revealed that 54% of the respondents either had no idea of the total landed cost of their shipments, or they had no automated template and thus had to manually calculate their landed cost.

Some suppliers have developed landed-cost modules on their own, while others are partnering with software vendors to deliver this product and other features useful for managing shippers' supply chains. Again, the complexity of global supply chains is preventing logistics and transportation companies from being able to completely manage their customer's supply chains end-to-end in an on-line environment, despite their claims to the contrary.

Shippers shouldn't get too discouraged, though. It wasn't that long ago that international trade transactions were paper intensive and time consuming. Moreover, expecting suppliers to collaborate instead of compete with one other would have been almost ridiculous. "We'll know when we've arrived," says Danzas AEI's Ron Reuben, "when we turn on our PCs and out pops a talking hologram advising us our shipment has just cleared customs and will arrive on our loading dock at three this afternoon."