Elaine Watson finds out how a successful dot.com is dramatically reducing the price of shifting freight
If you had a pound for every internet start-up that went bust in the late 1990s, you’d be laughing all the way to the bank by now. Which makes Freight Traders’ success all the more remarkable. While the industry is littered with the carcases of dot.coms that have gone to the wall over the past five years, one online portal bringing carriers and shippers together has gone from strength to strength.
Just three years after launch, Freight Traders has cut deals with the likes of Kellogg, Lever Fabergé and Kimberly-Clark, and its accounts are firmly in the black.
So why did it succeed where others have failed?
For a start, it was developed by logistics experts rather than unskilled opportunists who were convinced they could make a fast buck out of the internet, says founder Garry Mansell, formerly boss of Mars’ European logistics operations. Second, as a subsidiary of Masterfoods, it had the support of a credible brand. Third, and most importantly, it saved clients time and money.
In a nutshell, Freight Traders can take empty trucks off the road by putting shippers in touch with carriers for the most efficient way to get goods from A to B, says Mansell. “This can shave months off the tendering process and dramatically reduce the bill.”
The same principle applies whether a client wants to shift an extra truck-load of soft drinks down from Glasgow to Ipswich as a one-off due to a big promotion, or if he wants to create a tender for his entire European freight operation for the next year.
Take the former case. Freight Traders could find a small carrier able to offer a very competitive rate for the Glasgow-Ipswich trip because he is heading back up north anyway after making a delivery, says Mansell. “Using fewer, large hauliers is not always the most efficient or the cheapest solution. The big 3PLs like Exel and Tibbett & Britten will often be subcontracting to smaller players anyway, and taking a margin.”
The fact that Freight Traders handles the
tenders online is by the by, he says, as the days are long gone when putting www on your letterheads did much to boost business. Quite the opposite, in fact: “We never marketed ourselves as a dot.com. And we never spent stupid amounts of money on marketing. The vast majority of our business has come from referral.”
The figures speak for themselves, he adds. “In 2000, our first year, we handled about E140m of freight. In 2003, it was about E780m. We have been reducing the average price of freight for shippers by 5-6% simply by putting the right carriers with the right freight, and reducing empty running.” Although the focus to date has been on fmcg clients, there is a huge opportunity in chemicals, metals and automotives, says Mansell. “The principles are the same.”
Of course, there is nothing stopping a logistics manager from calling several hundred hauliers and asking them to bid for his business, concedes Mansell. “But this can take months. We can do this in eight weeks.”
Kimberly-Clark, which used to buy freight regionally, now buys it on a pan-European basis, and will tender about half its E130m freight business online with Freight Traders this year, says European logistics director Peter Surtees. “Freight companies can benefit from the cost efficiencies of more strategic planning and by bidding for our business online, free of charge and on a level playing field.”
The Freight Traders community consists of about 200 paying shippers (retailers or manufacturers) and 1,300 carriers (hauliers), for whom use of the site is free. With bases now in Germany, Belgium, Holland, France and central Europe, the company is expanding rapidly, says Mansell. “The European freight market is worth about E500bn. So we have a lot to play with!”
If you had a pound for every internet start-up that went bust in the late 1990s, you’d be laughing all the way to the bank by now. Which makes Freight Traders’ success all the more remarkable. While the industry is littered with the carcases of dot.coms that have gone to the wall over the past five years, one online portal bringing carriers and shippers together has gone from strength to strength.
Just three years after launch, Freight Traders has cut deals with the likes of Kellogg, Lever Fabergé and Kimberly-Clark, and its accounts are firmly in the black.
So why did it succeed where others have failed?
For a start, it was developed by logistics experts rather than unskilled opportunists who were convinced they could make a fast buck out of the internet, says founder Garry Mansell, formerly boss of Mars’ European logistics operations. Second, as a subsidiary of Masterfoods, it had the support of a credible brand. Third, and most importantly, it saved clients time and money.
In a nutshell, Freight Traders can take empty trucks off the road by putting shippers in touch with carriers for the most efficient way to get goods from A to B, says Mansell. “This can shave months off the tendering process and dramatically reduce the bill.”
The same principle applies whether a client wants to shift an extra truck-load of soft drinks down from Glasgow to Ipswich as a one-off due to a big promotion, or if he wants to create a tender for his entire European freight operation for the next year.
Take the former case. Freight Traders could find a small carrier able to offer a very competitive rate for the Glasgow-Ipswich trip because he is heading back up north anyway after making a delivery, says Mansell. “Using fewer, large hauliers is not always the most efficient or the cheapest solution. The big 3PLs like Exel and Tibbett & Britten will often be subcontracting to smaller players anyway, and taking a margin.”
The fact that Freight Traders handles the
tenders online is by the by, he says, as the days are long gone when putting www on your letterheads did much to boost business. Quite the opposite, in fact: “We never marketed ourselves as a dot.com. And we never spent stupid amounts of money on marketing. The vast majority of our business has come from referral.”
The figures speak for themselves, he adds. “In 2000, our first year, we handled about E140m of freight. In 2003, it was about E780m. We have been reducing the average price of freight for shippers by 5-6% simply by putting the right carriers with the right freight, and reducing empty running.” Although the focus to date has been on fmcg clients, there is a huge opportunity in chemicals, metals and automotives, says Mansell. “The principles are the same.”
Of course, there is nothing stopping a logistics manager from calling several hundred hauliers and asking them to bid for his business, concedes Mansell. “But this can take months. We can do this in eight weeks.”
Kimberly-Clark, which used to buy freight regionally, now buys it on a pan-European basis, and will tender about half its E130m freight business online with Freight Traders this year, says European logistics director Peter Surtees. “Freight companies can benefit from the cost efficiencies of more strategic planning and by bidding for our business online, free of charge and on a level playing field.”
The Freight Traders community consists of about 200 paying shippers (retailers or manufacturers) and 1,300 carriers (hauliers), for whom use of the site is free. With bases now in Germany, Belgium, Holland, France and central Europe, the company is expanding rapidly, says Mansell. “The European freight market is worth about E500bn. So we have a lot to play with!”
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