The e-Enabling of Hub Group

The advantages of collaborative partnerships in the emerging world of e-business logistics are numerous. As portals, application service providers, and other services burst forth into this arena, it is important to understand that no enterprise is large enough to do it all alone.

Hub Group Inc., Lombard, Ill., a non-asset-based transportation management company specializing in intermodal, LTL, truckload and international transportation, has recently inaugurated an e-business called the Vendor Interface. Through a partnership with Cysive Inc., Reston, Va., an e-business architecture company, the Vendor Interface is designed to manage the drayage function of intermodal shipments.

Cysive specializes in building Internet and e-commerce systems consisting of financial and workflow, customer care, data, forecasting and supply chain management. Cysive uses XML, Java, C++, Internet application servers, distributed objects, and relational and object database management systems. In addition, it uses software engineering tools, as well as multi-tier architectures and frameworks.

The Cysive-built system allows Hub Group to identify selected carriers for a shipment by analyzing cost, location, dates, and type of cargo. Hub Group can set terms and authorize deliveries with carriers online.

“Our goal is to provide optimal efficiency, lower costs, and a competitive edge for our customers and partners,” says David P. Yeager, vice chairman and CEO of Hub Group. “The web-based system allows this, and enhances our asset management capabilities.”

Until recently, managing intermodal freight shipments has been complex and time consuming. The Cysive system, according to Hub, automates what was once a manual process, and increases efficiency.

“We started our online presence in 1995, with a standard web site offering general information and brochures,” says Michael J. Arendes, director of marketing at Hub Group. “By 1997 the site migrated to a functional service that provided track and trace capability, allowing customers and vendors to view their shipments in our system online.

“Now we provide the Vendor Interface as a tool to communicate with our quality drayage companies,” he adds. “One of our operating companies sponsors about 200 drayage companies, which are checked for insurance certificates, and a satisfactory or better safety rating from the Department of Transportation. These 200 are out of a total of more than 5,500 carriers that we do business with.”

Part of Hub’s e-business strategy has been to not roll out everything at once, according to Arendes. Hub has been looking at its business processes and actively transforming them to work on the Internet.

“Our traditional competitors are still the ones we monitor, but they don’t worry us as much as the companies we don’t know anything about,” says Arendes.

The e-enabling of Hub started with its concentration on quality drayage partners. The company believes that starting with vendors, rather than customers, has been a critical part of its strategy, according to Arendes. Another part of its e-business strategy is an emphasis on relationships—in some cases with customers, and other times with vendors, who can be competitors one day and allies the next.

“The relationship we have with our customers and vendors—railroads, motor carriers, draymen, and steamship lines—is key to the back-end execution of any e-commerce or e-business transaction. As we get a program up and running online, we take advantage of it,” Arendes says. “This means establishing the connections and making sure everything works properly. This allows us to extend our business-to-transportation portals to other business-to-business sites, such as

“We conduct quarterly customer satisfaction surveys. Throughout the year, we survey about 600 customers and evaluate what we are doing right and wrong,” he says. “These surveys have shown that our customers appreciate the abilities of our staff—their responsiveness, initiative, and ability to solve problems. These relationships are the glue that holds the company together.”