Autumn 2007

Courier Exchange and its later sibling Haulage Exchange are survivors from the dotcom boom, and show how an online freight exchange can become an integral feature of a whole industry. Fulfilment & e.logistics talks to founder Lyall Cresswell

One should never be afraid of impinging on the status quo.' So says Lyall Cresswell, founder and head of Courier Exchange, which is one of the few survivors from among the UK-based online freight exchanges that emerged in 2000 with the dotcom boom.

He can afford to be pleased with the progress of his business. It has flourished where others have failed, possibly because of a fundamental decision taken early in the development phase. That was to charge users on a flat-rate subscription basis, rather than taking a commission on use or charging a 'pay per view' fee for each load called up.

'It means members can browse the system and use it as much or as little as they like, without having to worry about the cost implications all the time.'

 

His comment about the status quo relates specifically to a recent initiative by the company involving online payment settlement. Last year Courier Exchange launched a system called e-pay, which allows members to schedule and follow up payments, as well as generating reports to help record and track payment progress. Full integration with a BACS bank clearing bureau has also been under development.

As usual, the company is not looking for an easy win here. 'We're not interested in handling cash,' Cresswell emphasises, 'just in facilitating payment, and helping users deal with the constant problem of following up invoices and getting paid.'

Bearing in mind that many users are small companies, where key staff may want to access the system whilst out on the road, Courier Exchange has thrown a lot of resource into its CX Mobile system, which operates via wireless-enabled PDAs, and provides functions such as real-time electronic signature capture and proof of delivery. It has been implemented as a customised version of the Momote field service application.

Now the company is extending its payment handling system to its mobile platform. It has even been developing a 'widget' (small computer application) that extracts payment information from an accounting system such as Sage, imports it into an XML file and delivers it to the CX system for processing in the field.

Cresswell acknowledges that some end users still demand paper copies of key documents. 'We have addressed the need for a hybrid approach that might incorporate electronic PODs but printed delivery notes,' he says.

He recognises that there is still resistance in some corners of the market to mobile applications. 'It could be because of the price of mobile devices,' he speculates, 'or else because of the complexity.' In response, he says the company is considering the possibility of offering a 'lite' version of the mobile application, running on mobile phones or other generic devices rather than more specialist PDAs. 'You might not be able to do signature capture with a phone,' he says, 'but most of the other functionality could be included.'

The Haulage Exchange, which was launched in 2006, uses the same core technology as the Courier Exchange, though it captures somewhat more information about consignments, freight types and handling requirements. 'We're generally pleased with its progress,' Cresswell says.

Overall, he says the volume of transactions handled by the original site is up around 40 per cent on last year's, though he hesitates to say what proportion of the overall market his company holds. 'No one really knows the extent of the market,' he says. There are thought to be around 3,000 operators out there, he adds, 'so it should be possible to double or treble market penetration.'

Cresswell highlights another key difference between his business and many of the earlier online freight exchanges. 'A lot of them were shipper-carrier exchanges,' he says, pointing out that this inevitably implied a marketplace in which shippers were seeking the lowest cost for moving their freight. 'This is different from a carrier-to-carrier freight exchange.' He acknowledges that Courier Exchange did operate a tendering service in the early days, 'but we dropped this later.'

For similar reasons, Cresswell is sceptical about exchanges operated by organisations that are also courier or carrier companies. 'You can't wear two hats in this business.'

He thinks the progressive imposition of road user charging could be a future driver for growth in online exchanges. 'It will change the dynamics of transport operation because bills will go up. That will focus minds on the economics, and make back-loading even more of an imperative.

'Our mantra is that the industry should be more profitable. Everything we do is about that.'