OpenShip.com is accepting applications from shippers and carriers at its web site, www.openship.com, and expects to begin operations this month. The intention, according to an OpenShip.com press release, is to benefit both sides of the transaction. Carriers fill otherwise unused capacity with paying freight while shippers pay less to move the stuff.
That’s the idea, anyway. But at least one Internet/trucking innovator believes auctions will eventually be bad for the industry. Scot Moscrip, President and founder of Internet Truckstop (www.truckstop.com), the first Internet load-matching service, told Newport's Heavy Duty Trucking last year that Internet auctions would eventually drive some companies out of business. "The return haul for one company is a front haul for another company," he explained.
Indeed, OpenShip.com promises shippers they can "reduce transportation cost by 10% to 50%, depending on carrier vacancy levels." On the other hand, they promise carriers "profits," but with no such glowing estimates.
Meanwhile, another auction site, FreeMarkets at www.freemarkets.com, boasts in national print ads that using the FreeMarkets site, a major corporation realized a 4% saving across 27 shipping lanes. On the FreeMarkets site, the company boasts that "suppliers continue to lower their prices until the auction is closed. Buyers watch as prices fall in real time, before their very eyes."
Have Internet auctions had a major impact on trucking?
Not according to Robert P. Costello, chief economist for the American Trucking Assns. "No one has complained to me about it yet," he told TruckingInfo.com.
So far, so good. But stay tuned.