Technology Integration Plays Key Role in Future Success of Transportation Industry

Global IBM Executive Addresses Shipper-Carrier Forum

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SAN FRANCISCO - 28 Jun 2002: Improving information technology is crucial to helping the transportation industry strengthen systems critical to the global economy explained Greg Smith, Global Segment Executive, Freight and Logistics, for IBM's Transportation Industry group, in a presentation given this week at the "eye-for-transport Shipper - Carrier Forum" held in San Francisco.

Smith also emphasized that integrating technology among the many pieces of transportation networks is now even more essential for the industry to continue driving out unnecessary costs.

Advances in Internet use and the adoption of Just In Time (JIT) delivery along with other technological advances have played a significant role in helping the transportation industry to increase efficiencies, reduce costs, and boost sales. For example, in 2000, transportation accounted for 9.9 percent of the gross domestic product (GDP) compared with 14.9 percent in 1990. Shippers, carriers, forwarders and others continue to realize major savings from improved inventory control management as a result of increased operational efficiencies.

"Today, information technology is delivering significant efficiencies to all stakeholders in transportation, transportation infrastructure and governments, however, most of the transport modes still work independent of each other," said Smith. "The industry is in dire need of an integrated, international network of information that will not only continue to improve inventory management, increase efficiencies and result in cost benefits, but also enhance safety and security."

Recently, there has been much attention focused on shipping in relation to security and how technology can enable the tracking of shipped goods from point of origin to delivery. "As the government begins defining security-related directives, and the transportation industry works toward integration of all transport modes, the industry must implement solutions that enable it to access data from a fully-integrated system of computing, communications and sensor technologies," Smith emphasized.

Smith warns that transportation companies must also build information centers on open standards because connectivity is one of the most important factors in the industry's future success. The industry must also change its culture and standards to exceed consumer demands in terms of improved customer service and added convenience. Many transportation companies have already transformed from a "push" driven business model -- manufacturer influenced -- to a "pull" driven business model -- added value to the customer. Connectivity is essential to enhancing safety, security and efficiency for transportation today and in the future.

IBM's Transportation Industry Group provides a broad range of products, services, consulting, and integrated solutions to all segments of the worldwide transportation industry, including freight and logistic concerns as well as railroads. Together with business partners and ISVs, the IBM Transportation Industry group provides e-business solutions to the marketplace that can improve customer relationships, reduce costs and enhance speed to market. These solutions can help companies increase revenue through better-managed inventories and reduced distribution and fulfillment costs. They also give companies the ability to personalize relationships and increase customer loyalty. For more information, visit

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