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e-commerce allows quicker order processing as well as allowing other<br />

services to clients such as freight tracking services. E-commerce is also<br />

likely to increase the demand for some freight services, particularly road<br />

freight as, increasingly, business to customer transactions are made that<br />

include a home delivery service.<br />

9.2 Cost savings<br />

Suppliers in each of the transport modes are taking advantage of<br />

e-commerce to reduce costs in internal processes in the same ways that<br />

are occurring in businesses right across the economy.<br />

Savings are likely to accrue from more efficient labour and other administrative<br />

cost savings.<br />

IRG Transport Working Group<br />

Like many other industries, large organisations in the transport sector<br />

have implemented e-commerce, usually EDI, to streamline purchasing.<br />

EDI allows a reduction in inventory levels, staff effort and data errors and<br />

through smaller, more frequent and more accurate purchases. (Indeed, the<br />

trend towards ‘smaller and more frequent’ purchasing caused by EDI<br />

implementation throughout the economy will impact on the logistics of<br />

delivery in the transport sector).<br />

However, the outcomes of the working group suggest there is not a<br />

consensus that e-commerce will result in significant cost savings in<br />

the industry.<br />

The major inputs to the industry are; chemicals and petrol, machinery and<br />

equipment, and finance and insurance. The workgroup could not identify how<br />

e-commerce could reduce these costs, while noting that there are considerable<br />

intermediary costs for chemicals and machinery. Any savings in the machinery<br />

category may be masked by increased use of computers and other technologies,<br />

especially in-vehicle technologies. Communications input costs could also rise<br />

with increasing use of satellite telephony and GPS technology. Mobile telephony<br />

has a high penetration rate, but it could rise as coverage in remote and rural<br />

areas improves.<br />

IRG Transport Working Group<br />

Road<br />

Road freight forwarders who have created online booking services are<br />

making bookings easier and faster. Freight barcoding and tracking allows<br />

a greater percentage of correct deliveries, which is very valuable to<br />

customers. Forwarders staff productivity is increased, or staff reduced, by<br />

online booking and tracking systems, and also online Proof of Delivery<br />

imaging systems. Only a handful of the largest operators have<br />

implemented these systems so far, leaving more value to be realised as<br />

ado<strong>pt</strong>ion progresses across the industry.<br />

In-vehicle technology, such as onboard weighing and cubing, and<br />

specialisation of vehicle types allows more efficient loading of vehicles,<br />

increasing the value of the loads carried, and thus increasing productivity<br />

of staff and vehicles. GPS technology is also being implemented. The<br />

implementations of all of these technologies is still limited but growing.<br />

Further details on the impact of e-commerce in road transport can be<br />

found in Trucks Online (NOIE 1999) at http://www.noie.gov.au/trucks.<br />

Air<br />

Air transport operators are making online bookings available to<br />

customers. Online systems can save time and decrease effort for customers<br />

156

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