February 2001 | Commentary | Carriers Corner

e-Commerce Change Is in the Air

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In 1995, a major financial services firm said, "our customers will never go on-line to trade." Five years later, the landscape of that sector has changed significantly with a whole new way of doing business and with a cadre of new companies that are formidable competitors.

To some degree, the transportation sector, and specifically air cargo, is in a similar situation today to that of the financial services industry in 1995. Air cargo is a sector where business is done around the clock and around the globe through relationships, much like financial services were in the days before online trading. Today information is often transmitted via the phone, fax or e-mail. This more dated form of communication isn't necessarily bad, but it does present us with a great opportunity to move our sector forward and bring our industry into today's e-commerce world.

All around us, e-commerce is driving fundamental changes in the way we do business in every industry. Internet usage continues to double every 100 days. Business-to-business e-commerce is expected to grow to nearly $6 trillion in online transactions by 2005, according to AMR Research.

Considering that shipping and distribution accounts for approximately 10 percent of transaction costs, this drives a staggering potential for online transactions in the transportation sector.

The answer, however, is not to just "electrify" our processes and relationships through the web; rather, it is to leverage the Internet in targeted ways to improve our relationships and build our businesses.

E-Customer Relationship Management (E-CRM) can be a powerful tool for all of us. "E-CRM is all about the customer managing their relationship with us," says the Yankee Group.

Enhancing relationships, and ultimately building customer loyalty for our most valued customers, can significantly strengthen our companies. According to Cambridge Technology Partners, the average business loses half its customers during a five-year period, and companies typically spend five times more to acquire customers than they do to retain current clients.

Reducing defections only five percent can increase profits from 25 to 85 percent, and providing the e-commerce business solutions that customers need and want can greatly enhance customer loyalty and client retention, Cambridge claims.

It Starts with the Basics

Leveraging e-commerce to build customer relationships and deliver consistent, quality service across customer touchpoints starts with the basics. It is imperative that processes such as these are relevant and streamlined. Core automation systems must support the operation, pricing, inventory management and accounting processes. Customer data must be accessible and consistent across all communication vehicles, including sales, call centers and the web. Employees must be trained and motivated to ensure they service customers as they would like to be served themselves.

Once these items are in place, then e-commerce can be applied in ameaningful way. Just as it was for financial services, the opportunities to expand e-commerce in the air cargo industry are endless and very exciting.

A 24-hour, seven-day-a-week ability to transact and have access to information is powerful in any industry. An example of this transaction ability is unitedcargo.com. United Cargo recently redesigned this web site in response to customer demand to offer a cleaner look, improved navigation and optimum functionality. It also provides a personalized "My Cargo" section, a simplified registration process, and a Virtual Assistance Team to answer questions 24 hours a day, seven days a week, via e-mail or phone.

The age of wireless enables information at our fingertips wherever and whenever we want it. We need to take our abilities beyond domestic borders with the ability to fully utilize the Internet to transact in multiple languages and cultures, bringing new meaning to the term "global trade."

Change is difficult and intimidating for all of us. Our challenge is to understand and then leverage new technologies in ways to make our businesses stronger, while not forgetting how they were built in the first place—with people—our customers and our employees.

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