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SHIPPING takes a new direction

An old advertising slogan for a steamship line used to say that getting there was half the fun. For pulp and paper makers, often, getting the product there was no fun. And, as the definition of a core...


October 1, 2000
By Pulp & Paper Canada

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An old advertising slogan for a steamship line used to say that getting there was half the fun. For pulp and paper makers, often, getting the product there was no fun. And, as the definition of a core business narrows, companies look to outsource more and more of what they used to do. The last part of the production process, shipping, is no different.

Now, not only is the shipping outsourced, it can also be arranged online, the ubiquitous e-commerce. Moving back a step, it’s old hat for sales to be done via the e-commerce route. Now, the two can be combined.

Partnered with C.H. Robinson Worldwide, Inc. as of February 2000, PaperExchange.com offers North American logistics services as well as a credit service to buyers and sellers. C.H. Robinson is one of North America’s largest providers of multi-modal services and logistics solutions. Frank von Oldenburg, manager of logistics and fulfillment, PaperExchange.com, said the developing service allows people who never did business together before to start.

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For example, a papermaker could log on to the PaperExchange site, see an offer to buy paper coming from Florida and although the papermaker may never have shipped to Florida before, could put in an offer either delivered or FOB.

Being an online service, shipping rates are available immediately. The producer contacts PaperExchange with the rate quote and pick-up time. The next step is to integrate a tracking procedure. At this point, von Oldenburg added, all is set to “turn on the light.”

PaperExchange then contacts its underlying carrier, C.H. Robinson. Once PaperExchange’s logistics team receives the booking, Robinson takes over and arranges to move the goods.

Forest products companies can receive real-time cost estimates and transactional quotes within North America for less-than-truckload, truckload and inter-modal shipments, load tracking capabilities, freight rates and insurance on all shipments.

Presently, the service is limited to land transport, mostly truck although inter-modal transport (rail and truck) can be arranged. Von Oldenburg said work is being done with “several carriers” to establish marine shipping.

He stressed that one of the keys to the process is the ease with which both buyers and sellers can access and use the system. “When some companies pick partners and set up alliances, they often don’t set up a systems integration. There has to be a real online offering. Before we even write a press release (to announce a new partnership), there has to be an integration.”

Once a transaction tales place, a number is assigned to it. This transaction number is used to initiate the tracking. Tracking can also be done by a bill of loading number. The status of a shipment is updated twice daily. Buyers (and sellers if sold on a delivered basis) can track by “last status” until a “delivered” message is received.

Von Oldenburg said he sees two ways this type of process will affect the market. First, as noted, it will introduce sellers to new buyers of their product. For example, the PaperExchange site shows specific “people” who are looking for pulp. Companies will not need sales forces in various countries. On the flip side, people looking for pulp and paper can seek out lower prices.

Second, for those who have done business together before, why would they need this type of service? It becomes a matter of cost, von Oldenburg said. “We can offer them the ability to place orders and track them while offering lower rates (i.e., freight). With our logistics teams, we can offer them a layer of management that also tracks a shipment and ensures that the terms of the agreement are met.”

Because the parties involved use the PaperExchange process systems, there is no need to integrate different process systems. The entire transaction is made more efficient and helps to lower costs.

Shipments are insured. PaperExchange and Robinson monitor the shipping to ensure the product arrives as it should. C.H. Robinson ensures equipment availability on all shipments it accepts. PaperExchange also offers a credit check service. The supplier does not need to worry about it. As far as transactions go, a buyer pays PaperExchange.com, at which point PaperExchange.com then pays the seller.

This evolution of transportation is far removed from the days when pulp and paper companies had their own fleets of ships. It is part of the widespread outsourcing principle. Still, von Oldenburg said, it is not a solution for everybody. (For example, Cascades and Kruger still maintain their own truck fleets.)

“Some may use the logistics; some may use the technology,” von Oldenburg added. “Whether big or small, it allows companies to outsource some of their functions.”

PaperExchange offers complete online procurement. “Freight is a large component of PaperExchange.com’s procurement strategy,” von Oldenburg said. “PaperExchange gives its users the ability to purchase a product and price and book transportation for that product at the same time. In addition, users have visibility of the transaction from the point of the purchase order creation to shipment status and delivery confirmation.” This visibility is available to all PaperExchange.com users and does not require systems upgrades or the purchase of additional software.

After years of false hope and promises, the industry is seeing some real changes in the way it does business, from beginning to end.