May/June 2004

Kuehne & Nagel's handheld proof-of-delivery system aims to bring parcels industry functionality to the global freight market

When it comes to developing wireless real-time proof of delivery systems, most of the running so far has been made by express carriers and home delivery specialists. However, some of the big logistics groups are also dipping a toe in the water now, and one of the first international freighting companies to emerge with the makings of a comprehensive system is Swiss-based giant Kuehne & Nagel.

K&N's e-POD system has in fact been in the making for several years, and was given a preliminary launch last year. However, it has now moved to the stage of operational trials, so what was previously an intention has now become very much a reality.

Furthermore, UK-based global distribution director Roger Murphy, who is one of the driving forces behind the scheme, has revealed some intriguing details about how the group plans to roll out the service.

 

In essence, K&N is planning to set up a joint venture company with a third-party wireless communications specialist to market the system to outside users. These would include other logistics groups, parcels carriers, couriers, own-account operators, and ultimately even other types of business. Among those being considered are field service operators, vehicle recovery companies and public utilities.

All that is still some way off, but the trials are under way now. K&N's own UK-based delivery fleet of 45 vehicles has been equipped with the system and is using it daily. It should be extended to the Luxembourg-based fleet by the end of the third quarter, and then progressively to other countries where K&N has a presence.

So what is the e-POD system exactly? Basically, it is designed to extend K&N's existing consignment tracking system to the final delivery point, where Roger Murphy admits the company has historically been weak. "Broadly speaking we can track consignments right across the world, but we're not so good with the last mile," he says.

Part of the problem is that K&N, like many other international freight companies, is fundamentally a non-asset based operator. Whilst it does have a core fleet of its own vehicles, it relies extensively on contractors to do collections and deliveries. For a POD system to work, these operators have to be brought into the loop.

To provide a centralised information system, the group has been setting up an Internet portal, which provides a single channel for collating information from multiple sources. The company will be able to take information from a variety of inputs such as voice, fax and email and wireless devices, and collate it into tracking information. Not only will this provide contractors with information about loading and so on; it will also assemble input about deliveries automatically from them.

"We started looking at possible systems back in 2000," Roger Murphy says, "but there weren't many mobile devices available then, and those that existed were far too expensive."

lower prices

Now prices have come down, and K&N has developed what it believes is a viable multi-operator system. The hardware it has picked is the Czech-developed Gotive Pocket PC-based handheld terminal, although Murphy emphasises that the system is actually hardware-independent. It uses GPRS to transmit data to and from the company.

Contractors will now be encouraged to adopt this system. The hurdle K&N has to overcome is to persuade them to pay for it, but Murphy believes it has got this cracked. He says typically operators pay about £40 a month to run a mobile phone. The e-POD system is priced at £80, but for this the user gets all the functionality of a mobile phone, plus the consignment tracking system and other features (for instance, in-cab navigation could be built in).

He accepts that transport operators will not want to pay for a unique K&N system, then have to introduce similar systems for other customers, so he has taken pains to make the K&N version open. He says it can easily be used to interface with systems from companies such as FedEx and UPS, and can also integrate with existing transport management systems. Links to freight exchanges such as INTTRA and GF-X are also possible, as well as to mainstream ERP systems. "It's easy to make it a truly multi-purpose product," Murphy says.

He says he sees "enormous potential" to extend to capabilities of the system. "For instance, we could add a VISA account capability, which would allow users to make bulk fuel purchases at perhaps 4p below the going rate." But he adds that the POD capability is central to the system. "That's what triggers everything."

What of operator reaction so far? "We've had a lot of enthusiasm," Roger Murphy says. "No one is refusing to look at the system." But he maintains that it will not be an obligation for contractors to adopt it. "The minimum is simply for them to have some means of accessing our Web interface."

Whilst K&N's initial objective is to supply the system to its own contractors, the group clearly also has an eye firmly positioned on the wider market potential. It points to statistics showing that in Britain alone there are 400,000 commercial vehicles of up to 3.5 tonnes, and 1.8 million vans and light commercial vehicles.

pay as you go

In Europe as a whole, it says 550,000 of the 660,000 hauliers have just one vehicle. The pay-as-you-go basis of the e-POD system is thought to offer particular attractions for them.

The full system is expected to be launched towards the end of this year, by which time there could be 250 vehicles using it. Container carriers, who represent a separate market in the K&N universe, are also seen as potential targets.

In a sense, K&N is competing on two fronts here Ð on one hand with other freight groups who might introduce similar systems, and on the other hand with the proliferation of third-party products appearing on the market. However, by getting ahead with a working system, it may have stolen a march on bothwww.kn-portal.com