New direction for dot-com survivor

New direction for dot-com survivor

Freightquote.com, an Internet company that has focused primarily on less-than-truckload shipments since its inception five years ago, is expanding into the ocean arena by adding less-than-container-load ocean bookings to its service portfolio.

Freightquote, based in Overland Park, Kan., has negotiated deals with two non-vessel-operating common carriers that in turn do business with a wide range of vessel operators. The LCL service is similar to its LTL model, said Scott Hagenkord, director of carrier operations. Freightquote is not an auction site but relies on contracted pricing agreements with its NVOs, Central Global Express, based in Romulus, Mich., and Eagle Global Brokerage, a unit of EGL Inc., the Houston-based forwarder specializing primarily in airfreight.

Eagle has averaged a shipment a day with Freightquote since the ocean service was launched, said Lori Michael, senior account executive in Eagle's Kansas City office.

Besides arranging bookings, the NVOs generate on-line bills of lading and electronically communicate pickup information directly to the motor carriers that truck the goods to the ports or consolidation centers. That approach differentiates Freightquote from failed ocean shipping dot-coms such as GoCargo, E-RateRequest, and NeoModal, which focused on obtaining the lowest rate for the shipper through competitive auctions.

Freightquote launched its ocean service in mid-July, but its sales representatives have not yet begun aggressively marketing the service to the 10,000 or so small and medium-sized businesses that use it for trucking and airfreight. Nonetheless, it has had "some decent adoption," said Tim Barton, Freightquote's founder, chairman and chief executive.

While it is still new to the business, Freightquote believes it can succeed in the LCL market by staying focused on its core customers and providing them comprehensive worldwide shipping services, Barton said.

"Our customer base consists of infrequent shippers who often do not have access to carrier contracts, nor do they have visibility into what shipping options the marketplace has to offer," Barton said.

The advantage to carriers is the opportunity to achieve incremental revenue through a web-based alternative sales and marketing channel.

Freightquote charges shippers on a transaction basis. It makes money by keeping the difference between what it charges the shipper and the amount it pays the carrier.

"It appears that Freightquote is very intuitive and user friendly," said Jane Biddle, former chief commercial officer at the carrier portal Inttra and now a consultant in Chatham, N.J.

Last year, Freightquote reported a slight loss on gross revenue of $45 million, but this year it expects a profit of a couple of million dollars on revenue of about $70 million, said Joe Whelan, chief operating and financial officer.

The company could have added the LCL service a year ago but kept it on the backburner to solidify its core services, Barton said. It's also working on adding a full-container-load service.

"Our leap into the LCL ocean market is directly related to customer demand and consistent with our overall goal of becoming a worldwide multimodal transportation provider," Barton said.

LTL trucking represents about 85 percent of Freightquote's business. Domestic airfreight, which it added four years ago, and international airfreight, which it added last year, account for the remaining 15 percent.

By going beyond its core business, Freightquote is attempting a move that few other portals have made. Most stick with one transportation mode, whether it's trucking, ocean shipping or airfreight. Inttra and CargoSmart, for example, concentrate exclusively on ocean shipping, while Global Freight Exchange and Cargo Portal Services offer bookings only for air cargo.

One portal that has moved beyond its core business is GT Nexus. Several months ago it added contract management and transportation procurement applications for air cargo, supplementing its base in ocean shipping, said GT Nexus spokesman Gary Frantz. GT Nexus is working with two shippers that want to extend its platform to air cargo to manage both air and ocean shipments.

Another company with services in multiple modes is Freightgate.com. Its customers are primarily freight forwarders, though there has been some recent interest from importers, said Martin Hubert, the company's president. Freightgate's services include tracking and tracing, inventory management and contract management.