Cool new approach to cut freight costs

While the industry is littered with the carcases of dot.coms that have bitten the dust, those that have proved they are more than a bunch of opportunists trying to make a fast buck out of the net have managed to buck the trend.

Fledgling online freight exchange Coolload is on course to double its business this year, while larger rival Freight Traders handled more than euro one bn of business in 2004.

Coolload, which has won several e-commerce awards since its inception two years ago, saves shippers time and money by putting them in touch with carriers to find the most efficient way to get goods from A to B, says operations director Andrew O'Sullivan.

"Unlike some other freight exchanges, we charge carriers to use the service, while shippers can post their requirements on the site for free," he says.

"They simply post their freight loads on the website load board, and within minutes, details are sent via email to hundreds of refrigerated hauliers in the UK and Europe."

At the moment, much of the trade conducted on the site is ad hoc, whereby shippers needing to shift an extra truck-load from one end of the country to another region -- due to a big promotion, or because they find themselves let down by a regular haulier -- can post short-term loads to carriers, he says.

However, it is also possible to set up long term tenders for regular business.

Some companies are using the service both as carriers and shippers, says Graham Eardley, md of haulage firm Eardley International. "As a load provider, we know that the loads we post on the site are broadcast industry-wide and will generate a speedy response. As a transporter with an empty vehicle, we are likely to find a load much more quickly and easily on the Coolload site rather than wasting valuable man hours on the phone."

Gloucester-based haulier Whites Transport has been using the site since last July, says proprietor Ray White. "We have experienced a number of commercial benefits. A delivery scheduled for midweek will normally guarantee a return load from Coolload by Monday."

However, it is still some way behind market leader Freight Traders, which is on course to handle more than euro 1.2bn of freight this year, just five years after its launch.

Former Mars logistics boss Garry Mansell, who set up Freight Traders in mid-2000, claims customers using the service such as Kellogg and Coca-Cola have shaved 5-10% off their freight bills.

Freight Traders now has 250 paying shippers and 2,400 hauliers/carriers, which can register for free. The vast majority of Freight Traders' business is long-term tendering.

Logistics managers are quite capable of picking up the phone and ringing hauliers direct, he acknowledges. "However, manually setting up a euro 50-80m tender covering thousands of routes can take six months. We can do it in 12 weeks."

Using fewer, large hauliers is not always the cheapest solution, he adds, as large third-party logistics providers often subcontract to smaller players anyway, and take a margin. "If you are setting up a tender in unfamiliar territory, we may have carriers you have never heard of that can offer more competitive rates."

The company, which has Unilever, Masterfoods and Coca-Cola on its books, is both "cash positive and profitable", says Mansell.