Heavy investments in EDI keep carriers from Web-enabled tech

A new U.S. study offers insight into the e-business practices of trucking companies and offers a contrast with the e-commerce practices of Canadian carriers.

“This is a business where profit margins are tiny, and milk-run reliability is everything,” says Pari Sabety, Director of the Technology Policy Group of the Ohio Supercomputer Centre, which conducted the survey. “It is an industry segment that adopted Electronic Data Interchange (EDI) technology widely during the past decade, and Web-enabled applications haven’t caught fire.”

A total of 600 trucking and logistics firms in Ohio were surveyed as part of TPG’s Ecom-Ohio project.

Highlights of findings in the TPG study of trucking and logistics firms include the following:

EDI is a dominant technology in this industry segment. Of 77 companies who said they exchange data electronically with customers, 42% said they use EDI; 28% use a Virtual Point-to-Point Network (VPN); and 14% use some other web-enabled technology.

About a third of companies surveyed are using the Internet; primary applications are tracking shipments (18%) and sales (17%). There were a number of noticeable differences between companies that identified themselves as carriers and those that said they were third-party logistics providers; in general, carriers were more likely to experience or pursue operational advantages, and third parties were more likely to experience or pursue marketing advantages from Internet applications.

About half of Internet users perceive productivity improvements from adoption of the technology; 38% report perceived improvements in revenue. “No change” was a common perception in both productivity (45%) and revenue improvements (62 %). In parallel surveys, overall improvements in revenues were reported by 40% of financial services firms, and 34% of automotive suppliers. Perceived improvements in productivity were reported by 77% of financial services firms, and 55% of automotive suppliers.

Only about a third of trucking and logistics companies with Web sites link data directly to back office business systems. Thirty-five percent of transportation firms with Web sites link data from their sites directly into their business systems.

In comparison, a study of Canadian carriers commissioned in 2001found only a small percentage of trucking firms had a Web site and most of them use it for advertising and providing company information. The frequency of e-commerce usage is low. Canadian trucking firms use e-commerce less than 20% of the time for most day-to-day business functions. “The most likely cause of the slow adoption of e-commerce in the Canadian trucking industry, however, may be a lack of customer readiness in utilizing these technologies, regardless of availability,” Transport Canada commented in its annual report.

Terion reorganizes operations, receives financial boost

Terion, Inc., the financially troubled provider of trailer monitoring systems, has reorganized its operations and received an additional $10.8 million from its investor group.

The company, which had a brief presence in the Canadian market before running into financial difficulties, has restructured its business to focus on the FleetView product.

Its restructuring efforts included funding from existing and new investors.

Peregrine Systems divests transportation asset management

Motor carrier fleet management software provider Peregrine Systems has sold its transportation asset management business to Maximus Inc. and its FacilityCenter product line to Tririga Inc.

The move is designed to help the company, maker of the Transportation 5.0 and Fleet Management software suites, reduce its debt and expenses.

Peregrine received $12.5 million from the sales. Since announcing in early May it may have overstated revenue by as much as $100 million and would restate its earnings for the previous 11 quarters, Peregrine has sold three of its businesses.