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Shipping and Shipment Tracking

SHIPPING AND SHIPMENT TRACKING

Since the earliest days of commerce, manufacturers and retailers have relied on shipping companiesincluding parcel/express shippers like FedEx and United Parcel Service;less-than-truckload shippers (LTLs); and railway shippersto move goods throughout the nation. Traditionally, the process of shipping goods was relatively straightforward. Wholesale and retail orders were taken manually via mail, fax, phone, or in person, and a shipment hopefully followed within a reasonable period of time. Until technology allowed for the tracking of shipments, the shipping process often was characterized by a certain amount of mystery. As Logistics Management & Distribution Report explained: "Within memory of many logistics managers, transportation was often described as a 'black hole.' Freight went into the system, and managers hoped it would emerge at the other end intact and something close to on time."

In the mid-to-late 1990s, e-commerce changed the nature of shipping. Information about individual shipments became almost as important as the shipments themselves. Knowing everything from the whereabouts of a shipment in transit to details about its temperature became increasingly important. Companies also gained the ability to reroute shipments in transit as needed, depending on fluctuations in inventory or other factors. The importance of information changed the relationships between companies and shippers, and shippers quickly discovered that being technologically enabled for e-commerce was a requirement for doing business.

Besides an increased emphasis on information, e-commerce also changed the kinds of shipments made by companies. Rather than making fewer larger shipments, companies began making smaller, more frequent ones. As reported in Transportation & Distribution, in Morgan Stanley Dean Witter's Freight Transportation and Logistics Industry Report, 65 percent of respondents indicated they would increase their use of parcel/express carriers because of e-commerce. Fifty-seven percent planned on using more national or regional LTLs, and 53 percent expected to rely more on local couriers or trucking operations. These indications were good news for parcel shippers, LTLs, and others specializing in smaller shipments.

Along with greater utilization, parcel/express carriers like United Parcel Service, FedEx, and DHL Worldwide Express began to become more involved with the e-commerce efforts of their customers. Going beyond the delivery of packages, each company established business units focusing on the fulfillment aspect of e-commerce. UPS created a subsidiary called e-Ventures to identify, test, and launch new e-commerce-related businesses within the company. The first such business to emerge from e-Ventures was UPS e-Logistics, a business unit that offered clients "turnkey supply chain management solutions" by taking advantage of its transportation and warehouse networks. The services it offered included inventory management, shipping and delivery, warehousing, order fulfillment (pick, pack and ship), management reporting, customer care and telephone support, and returns management. UPS previously offered similar services to large corporate customers like Nike.com.

In March 2001, Mail Boxes Etc. announced that it would be acquired by, and become a subsidiary of, UPS. Among other strategic advantages, the acquisition would enable the two companies to better serve businesses and consumers engaging in e-commerce. UPS and MBE already had been working together for more than 20 years in various endeavors, including the shipment and return of goods sold over the Internet.

In May 2000, FedEx Logistics announced that its FedEx Supply Chain Services, a third party provider of supply chain solutions, had created FedEx eLogisticsa new division focusing on providing e-commerce logistics solutions to businesses. According to Doug Witt, then vice president and general manager of the new division, FedEx Supply Chain Services helped customers to decrease cycle times, improve the management of returns, and lower fulfillment costs.

Like UPS and FedEx, DHL Worldwide Express had a logistics unit offering product handling and distribution services (inventory management, storage, repair and return, and pick and pack) in the early 2000s. However, the company also had several other offerings related to e-commerce. DHL International operated a special Web site devoted exclusively to e-commerce called DHL Masterclass. The site was designed to help both small and medium-sized companies expand traditional operations to the Internet. It included tips and information on logistics and fulfillment, customer relationship management, supply chain management, selling chain management, e-business strategy, and more.

DHL Worldwide Express also offered Web Shipping, an Internet-based service especially for those with international needs. Customers were able to schedule pickups, complete export documentation, prepare and print airbills, estimate shipping charges, track shipments, and determine which shipments were dutiable, all from one Web site address. Additionally, with the exception of duty and taxes, DHL's Worldwide Priority Express service allowed customers to obtain shipping quotes that contained all charges involved, including pickup, air transit, clearance through international customs, and delivery.

In the early 2000s, DHL Airways Inc., the U.S. division of DHL Worldwide Express, also had plans to create a new service that would remove much of this frustration and mystery by allowing shippers to determine charges made by foreign customs authorities before shipments are made. While taking international orders online is relatively simple, shipping and delivery can be another story because of taxes, tariffs, government-imposed duties, and other fees that, historically, couldn't be determined until shipments were already delivered.

Like parcel/express carriers, LTLs also were playing more involved roles in the affairs of their customers. Roadway, one of North America's largest LTLs, created a special program to help companies manage returned goods during the holiday season and following special promotions. It also allows customers to access a wide variety of real-time information and services on a special, password-protected section of its Web site. In mid-2000, Roadway began offering electronic bill presentment and payment on the site, including real-time access to invoices and payment history information. Other features on the site included quick access to pricing and tariff information, the creation of special reports, calculation of transit times, problem resolution, and more.

TRACKING & TRACING

Of the many different aspects of the shipping process, shipment tracking was of the greatest concern to consumers and companies alike in the early 2000s. The Morgan Stanley Dean Witter report revealed that the section of a transportation company's Web site devoted to real-time tracking and tracing were the most important to companies (9.4 on a scale of one to 10).

In the early 2000s, parcel/express carriers allowed customers to track shipments through the Internet in a variety of ways. One approach involved the use of e-mail, whereby customers entered anywhere from one to 25 different tracking numbers into the body of an e-mail message, sent it to the shipping company at a specific address, and received responses within minutes regarding the whereabouts of each one. In addition to this approach, UPS also allowed customers to import tracking numbers from spreadsheet programs and receive results via e-mail messages or saved to a data file. DHL Worldwide Express allowed customers to track packages using the text messaging capabilities of their mobile phones. After entering an airway bill number, DHL responded with information about shipment status in as little as 60 seconds. Customers with wireless Internet access also could access a DHL Web site to track packages.

LTLs like Roadway also offered customers the ability to track packages via e-mail as they moved through different stages of the delivery process. Some offerings were more sophisticated than others. Roadway offered customers a remote control feature that allowed real-time freight information to be displayed in a Web browser window on a customer's desktop computer. Consolidated Freightways (CF) enabled shippers to embed CF shipment tracking capabilities on their own Web sites. ABF Freight System Inc. had a predictive tracking system that notified shippers if a shipment appeared to be falling behind schedule so alternate arrangements, like re-routing, could be made if necessary.

To actually keep track of millions of individual packages, shippers relied on a variety of different technologies. In late 2000, FedEx equipped package handlers at its distribution hubs and its drivers with wearable computers and handheld scanners that were connected to a national wireless computer system. These devices were able to perform a variety of functions, including the ability to record digital signatures from customers who accepted shipments, notifying workers if they attempted to place packages onto the wrong vehicle, and updating FedEx's location database regarding the whereabouts of individuals packages. At the time, packages were scanned at different stages of the delivery process, known as routing events. InfoWorld indicated that the number of scans FedEx made to individual packagesthen about six times eachwould double with the new technology it introduced, making more information available in the company's location database.

LTLs used similar handheld scanning technologies and wireless computer networks so drivers and dock workers could track shipments as they moved from point to point. Additionally, both semi cabs and trailers were sometimes outfitted with devices that allowed them to be pinpointed via satellite. In addition to showing the whereabouts of cabs and trailers, sensors on trucks also could reveal when doors are opened; when trailers are empty, full, or hooked to different cabs; the temperature of perishable shipments like fruits or vegetables; and more.

The rail industry also was making it easier for customers to track shipments online. Individual railroads had similar means of tracking shipments for customers, including the ability to track individual railcars with Wireless Application Protocol (WAP)-enabled cellular phones. However, according to Morgan Stanley Dean Witter's Freight Transportation and Logistics Industry Report, 21 percent of respondents planned on scaling back their use of railroads as a shipping method. In response to customer complaints about the difficulty of tracking information on multiple railroad sites, the rail industry came together in a unified effort to develop Steelroads, a Web site that provides one interface for setting up shipments involving more than one railroad. In addition to allowing customers to access information about routes and payment, customers could track and trace shipments by entering car initials and numbers. The site expected to offer easier means of shipment tracking as it evolved.

Finally, one company was making it simpler for shippers to handle all modes of transportation from one Web site, including rail, marine, air, and ground transport. Arzoon allowed customers to inquire about rates, place orders, track shipments, and obtain information reports, with the ultimate goal of reducing cost, increasing efficiency, and customer service.

FURTHER READING:

DHL Worldwide Express. "DHL Launches E-commerce Web Site to Help Companies Develop E-business Presence." DHL Worldwide Express, May 24, 2000. Available from www.dhlusa.com.

"FedEx and VisualWorks Deliver On-Time!" Planet IT, March 12, 2001. Available from www.eoenabled.com.

"Full Speed Ahead on the Electronic Highway." Logistics Management & Distribution Report, April 2000.

Hickey, Kathleen. "Road Trip." Trafic World, January 29, 2001.

"Internet Use Will Change Freight Patterns." Transportation & Distribution, January 2001.

King, Julia. "Shipping Firms Exploit IT to Deliver E-commerce Goods." Computerworld, August 2, 1999.

Luczak, Marybeth. "Moving Goods, Not Paperwork." Railway Age, November 2000.

Milligan, Brian. "High-tech Tools: Boon for Shippers & Carriers." Purchasing, August 12, 1999.

Neel, Dan. "Wireless Tracking of Shipments Readied." InfoWorld.com, September 2, 2000. Available from www2.infoworld.com.

SEE ALSO: Channel Conflict/Harmony; Fulfillment Problems; Order Fulfillment; Supply Chain Management

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