Federal Express and Right-O-Way:
Absolutely, Positively on the Net
A FedEx woman called me up and asked what the people in Memphis could do to retain my business, which had plummeted to almost zero volume. “You’ve given me great service,” I said, thinking of all the foot-to-throttle occasions when FedEx had picked up manuscripts on deadline. “But you see, I’m on the Internet nowadays. Everything for my current book project goes ever the wire.” I was working on a guide telling how to lobby for one’s political beliefs online, and the publisher had even received the book proposal via the Net. Lots of people were doing the same, not just with the Net but with commercial services and fax. On legal lists, some lawyers were debating the validity of electronic mail for business matters, but the new technology would quiet the discussion soon enough when foolproof, digital signatures could establish the identity of the sender.
No one needs to weep for FedEx, United Parcel Service, and the rest, however. The typical computer is a medium-sized box full of parts that come in much smaller boxes, such as a disk drive or a modem. And, as shown by the thickness of Computer Shopper and other magazines that cater to computer users buying from afar, FedEx and similar services are thriving. That is just one example. High-tech companies, especially the network kind, want reputations for reliability and fast turnarounds. They love the FedEx slogan: “When it absolutely, positively, has to be there overnight.” Courier services are godsends for corporations that rely on just-in-time delivery to reduce inventories of spare parts. If nothing else, this principle appeals to manufacturers with slim inventories. Also, more and more people are working at home. At the same time, upscale consumer magazines abound with ads touting merchandise via express, everything from steaks to flowers.
The real question, then, isn’t how to downsize but rather how to cope with the deluge of business in small packages. And Federal Express views the Internet as among the more promising of many possibilities.
For years, FedEx used its own network to set up computer links through which high-volume, Fortune 500 companies could request pickups, track shipments, and receive invoices. First, FedEx communicated with mainframes. Then it began supplying some customers with personal computers; eventually, some companies shipping as few as three packages a day could qualify. “We started with the biggest customers first and then extended that service to smaller and smaller companies,” said Robert Hamilton, a marketer at FedEx dealing with information matters. The next move was supplying tracking software through which people could use their own machines to dial up FedEx. Step by step, FedEx was working to get almost all customers online to its computers—even the operators of small home businesses.
The Internet could play an important role here because it is the closest thing to a universal computer network. By the mid-1990s people in the air freight business caught on to the advantages of the Net over the proprietary networks in many cases. The Internet reached scores of countries, no small advantage in an internationally oriented business, and planners could use the Net’s volume to help slash the costs of telecommunications and improve service to customers. Right-O-Way, a freight forwarder in Tustin, California, was among the Net pioneers. Back in 1992 the company had figured out how to use customers’ personal computers to print out bar code labels.
With portable radio-frequency scanners linked to the firm’s mainframe, Right-O-Way’s workers could track shipments for customers—could, in other words, offer the same services that Ex[Ex] could. Right-O-Way’s customers dialed up the company directly rather than through the Internet. But in 1994, Martin Hubert, vice president of information systems, hooked Right-O-Way into the Net for customers wanting to use it. He spent just $1,000 on additional UNIX software, modems, network setup charges, and programming time, and $350 a month in Internet-related bills.
“Some customers have tried it already,” Hubert said. “We have sales people use the Internet to access shipping data. Our advanced overseas partners can access our computer directly for e-mail, tracking, and tracing. Customers like BMW, ClothesTime, and Packard Bell access our computer and save money on long-distance charges from overseas.”[[2.7]] Those companies could reach the Right-O-Way computer directly, getting immediate answers while they were online. Using the Net, they could even schedule shipments. Right-O-Way told me that it protected account numbers by requiring customers to use passwords that they received through sales reps and ways other than the Internet.
What’s more, the company served even customers having only the most basic of Internet connections. Yes, you could Telnet into the Right-O-Way computer system on the Internet—could issue commands as if you were at a keyboard at headquarters. But if you lacked Telnet capabilities and didn’t mind the delay, you could also send electronic mail messages in the appropriate format to track shipments or issue pickup orders.[[2.8]]