Six Trucking Firms Form Internet Marketplace

FRAMINGHAM (03/15/2000) - Six major transportation companies have merged their logistics units and launched Dallas-based, a Web-based marketplace they say will be a "one-stop supermarket" for transportation needs.

In addition to its logistics business, each of the six companies is contributing $5 million to the venture. Last year, the companies' logistics units had total combined revenue of $650 million. The companies said their purchasing power will allow them to lower costs for fuel, equipment, maintenance, repair parts, insurance, credit and other services - savings they said they will pass on to their customers. Other shippers and carriers can join the marketplace as well.

The companies forming are: Covenant Transport Inc. in Chattanooga, Tenn.; J.B. Hunt Transport Services Inc. in Lowell, Ark.; M.S.

Carriers Inc. in Memphis; Swift Transportation Co. Inc. in Phoenix; U.S. Xpress Enterprises Inc. in Dallas; and Werner Enterprises Inc. in Omaha.

"Our new venture truly epitomizes the third wave of e-business in which traditional brick-and-mortar companies are leveraging their physical assets into the digital marketplace," said Chairman, President and CEO Jun-Sheng Li in a statement. Li is currently president of J.B. Hunt's logistics unit.

Initially, will focus on trucking capabilities, but will eventually expand its services to include other services such as air transportation and home delivery.

Greg Girard, an analyst at AMR Research Inc. in Boston, said one of the reasons the six firms merged their logistics units was to provide a global scope to their offerings, as well as to compete in the ever-changing logistics marketplace.

"Internet-based logistics exchanges have really shifted the basis of competition in truckload and less-than-truckload logistics. Some have created a huge market capitalization," Girard said. "This is an effort on the part of these traditional asset logistics companies to compete in this new environment."

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