Beyond the Potholes, a Road of Tremendous Opportunity Awaits Web-Enabled Transportation Service Providers, IDC Says

FRAMINGHAM, MA – MAY 7, 2001 – Tremendous opportunities await Web-enabled transportation management service providers. So, too, do challenges. According to IDC, the fragmented and manually driven transportation industry lends itself well to Web enablement, but players vying for revenue share will first have to safely negotiate several potholes.

 

"The tightening venture capital climate, increasing investor scrutinization, and the cautiousness of end users to embrace Web-enabled transportation management services have created a market shakeout," said Romala Ravi, senior analyst for IDC’s eLogistics program. "As service providers navigate the learning curve, those that evolve their offerings and latch on to the right business model will prosper; those that don’t will perish."

IDC believes the major challenges facing service providers include lack of a track record, end-user (shipper) reluctance to jeopardize existing carrier/3PL relationships or do away with existing IT systems, lack of end-user awareness of the value proposition of these new service providers, and difficulties that end users have in sifting through the market hype and confusion when evaluating service providers. "End users are generally cautious about committing their transportation functions over to new service providers whose execution capabilities and performance have yet to be proven," Ravi said. "However, they are also aware that the Internet presents many unprecedented opportunities to improve their logistics and transportation management processes, and many are re-evaluating their internal processes looking for new and improved ways to manage their transportation needs. This bodes very well for service providers."

IDC believes service providers who work with shippers’ existing relationships and IT systems, develop a balanced value proposition for shippers and carriers, leverage partnerships to build end-to-end capabilities, and quantify the return on investments related to using Web-enabled transportation management services are best positioned to avoid the potholes and reap revenue opportunities.

IDC analyzes the service opportunities and challenges for Web-enabled transportation management services providers in detail in the following research:

· Are Shippers Ready for Web-Based Transportation Services? (IDC #B23954). This bulletin examines shippers’ decision-making process to outsource transportation management functions and analyzes their readiness to adopt Web-enabled services for transportation management.

· Unearthing Real Revenue Opportunities for eLogistics Service Providers: End-User Survey Findings and Market Forecast, 2000-2005 (IDC #B24559). This bulletin presents findings from IDC’s primary research on shippers and discusses the barriers that shippers currently face in adopting Web-based transportation management services. It also recommends how service providers can help shippers overcome these barriers and unearth the real revenue opportunities presented in this space. A market forecast on the demand for Web-based transportation management services is provided.

To purchase these bulletins, contact Jim Nagle at 1-800-343-4952, extension 4549, or at jnagle@idc.com.

For more information about IDC’s eLogistics program, contact Jill Toole at 1-800-343-4952, extension 6915, or at jtoole@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 700 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

 

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