Enterprise Keeps Trucking Firm’s Costs Low [LinkAGE / General Electric]
by Hope Katz Gibbs
LinkAGE: News about Electronic Commerce
Sales are soaring at American Freightways, an $870-million trucking company in Harrison, Arkansas. In 1997, the 16-year-old company was the eighth-largest revenue generator among the 111,000 U.S. trucking firms that
make up the $168-billion less-than-truckload (LTL) industry.
American Freightways has kept revenues high by using GE Information Service’s (GE) Enterprise System to keep costs low. Since 1996, Enterprise System has saved the company about $550,000, says Dwayne Foresee, American Freightways’ electronic data interchange (EDI) systems specialist.
Productivity also has improved. “We are now able to better monitor our data and control its flow,” Foresee says. “If there is a problem I can go right out to the computer and re-queue data or re-send it as necessary.
Enterprise System, a business-information gateway that functions as a traffic cop while providing rapid integration of existing and next-generation applications, has the capabilities American Freightways needed, says Foresee. Enterprise System can dial into customers’ and vendors’ computer systems, connect to any value-added network, and transmit data via an extranet, the Internet, or a virtual private network (VPN).
The biggest benefit for American Freightways has been its improved ability to process paperwork electronically, with 874 of its trading partners. Using Enterprise System, American Freightways’ per-transaction cost has dropped from 24 cents to 7 cents.
The Enterprise System currently processes 1 million transactions per month—including bills of lading, invoices, remittance and remittance advice, shipment inquiries, 401K distributions, payroll deposits, and cargo claims—twice as many transactions as were processed before the company bought Enterprise System, Foresee says.
It also enables American Freightways to track shipments and send invoices. Foresee says about 25 percent of invoices now go out electronically, and 63 percent of all shipments send back an electronic status report when deliveries are completed. American Freightways takes advantage of the Web Access Module of Enterprise System to do EDI with smaller trading partners over the Internet.
This year, American Freightways will begin asking its vendors to send invoices electronically. “By offering them the ability to send data electronically through EDI, we provide our customers and trading partners with the most efficient and economical way to transmit data,” Foresee says. “That makes doing business easier for everyone.”