Speed Bumps.

Internet logistics companies offer more but still fail to provide one-stop service.

JIM CARUSO HAS WHAT HE FIGURES IN THESE HALCYON Internet days to be a simple wish for his wireless equipment company: to ship his goods easily from his business in Atlanta to his customers in Latin America and other markets.

Caruso's been making the rounds, talking to all the dot-commers and transportation businesses to find a company to fulfill his needs. But the services have come up a few keystrokes short of a good system for his company, Wireless Vertical.com.

"Can I, as a customer, find the cheapest way to get my cargo, insure it, pay for it and just push a button and have it shipped to my dock?" Caruso asks rhetorically. "There's no one out there doing this end to end."

But allowing his logistical needs to languish until the right transportation solution comes along could sound the death knell for his company. "This is critical," he says. Another "e" word. Indeed, logistics--whether in-house or contracted on the Internet--is becoming increasingly important for businesses, especially in the international arena. According to a 400-page report called "e-gistics" by New York brokerage Bear Stearns, "All successful companies will be logistics companies. Participants must not only be able to design and market products, they also must be able to source it, build it, move it, store it, pay for it and deliver it to the market--on time and at a competitive price."

Successful companies will have to make logistics a priority, says Mike Raisinghani, the director of the Research Center of Applied Information Technology in Texas. He predicts the bigger companies will hire package- and cargo-moving firms to handle those operations.

"Quite a few of our customers have requested more of a presence, especially in Latin America," says Richard Camejo, the UPS international vice president for the Americas region.

The big express-package companies are not the only ones looking at the way they do business. Importers, exporters and other shippers are being bombarded with choices that many never dreamed possible a few years ago. This is especially true in Latin America where markets--and logistics schemes--are beginning to develop side by side with Internet-based businesses.

Tony Migloiore, the head of Netenvios.com, a Buenos Aires-based site that hooks up shippers with transport services, puts it this way: "If you want to send a parcel in the United States, it's no big deal. You have sophisticated companies like UPS and FedEx. We do not have big players like that here."

But, just as the Net makes it easier to sell goods and open businesses, it makes it possible to provide, for the first time, an assortment of software and logistic packages to smaller businesses.

"That's who we are trying to reach," says Christian Collin, who handles e-commerce matters for DHL Americas' operations. "We want the small suppliers in places like Costa Rica."

DHL has found that one of the best ways to do that is to customize Web pages by country. Equal rights. "The Internet is the great equalizer," says John Urban, the chief executive officer of California-based Tradiant.com, an Internet company that helps companies with their ocean shipping needs. "It will give the same ability to all."

This becomes crucial in Latin American, Urban says, which has more smaller companies that lack the clout to negotiate shipping deals.

But Latin American shippers have good domestic delivery, says John F. Maldonado, who built up the UPS Latin American infrastructure before taking over as logistics chief for Fiera.com, one of the few companies starting to provide Internet logistic packages to the region. "They just did not have the technology."

Fiera.com is offering a range of services for its electronic retail shippers, from managing inventory to merchandise returns. Netenvios.com concentrates on the transportation of goods--comparing rates, arranging contracts and tracking the shipments. It has its own ground people in the major Latin American markets.

The two companies mirror, on a smaller scale, the range of services that a growing army of dot-coins, such as auction and trade exchange Web sites, are offering. But, as Wireless Vertical's Caruso says, it's a fragmented, disparate group that often drives the shipper to confusion. "If only I could find that one [online logistics company] that could do everything," he says.

Dot-competition. Sooner or later all of these logistic dot-coms will wind up taking somebody's lunch or, worse, end up on the dinner table. By the end of the year, there will only be a handful left for each way to move cargo--by plane, truck, ship or rail--maybe about 20 in all, predicts Sanjay Joshi, the chief marketing officer for Freightwise.com, a Web site that auctions freight services that is trying to capture Latin American cargo coming through the Gulf of Mexico and going to the U.S. hinterland by truck or rail.

At some point, according to Bear Stearns, the Research Center of Applied Information Technology in Texas and other sources, dot-coms like Rightfreight and Fiera will wind up merging, consolidating or forming partnerships to provide true one-stop logistics shopping--even for places like Latin America.

According to Bear Stearns and other analysts, the best bets are companies like From2.com, Rightfreight.com and others that are electronically integrating and bundling information and services like warehousing, distribution, cargo moving, rate quotes, regulation problems and tracking. "We're making products move with software and intelligence," says Leon Falic, the head of From2.com, which transports electronics, computers and other U.S. goods to Latin America. "And in Latin America, the lack of information is one of the biggest obstacles."

Rightfreight--an airfreight exchange that depends on Latin American shipments for about a fifth of its business-sells a service that examines and streamlines the logistics network of a company. "We're seeing that there's an amazing amount of fat being squeezed out," says Lane Butler, company marketing vice president. He estimates that Rightfreight can cut 15% to 40% from a company's logistics costs.

But Butler admits that legal restrictions, inadequate infrastructure and customs clearance problems prevent Rightfriehgt from providing a complete solution. Says he: "It truly would be the Holy Grail if we can solve Latin American logistics problems."

CARGO SPOT

MOST DOT-COM RETAIL AND LOGISTIC SITES thrive in what the shipping industry calls the spot market--cargo that companies need to ship in a hurry, either because they miscalculated their shipping needs or to accommodate retail orders that are impossible to plan for in advance.

"With a dot-com, you are looking at the spot market. That's the price good only for a day," says Rey Ortiz, the head of international procurement for chemical manufacturer E.I. du Pont de Nemours & Co. Most large manufacturers want a longer time horizon than 24 hours.

Major airfreight carriers, shipping lines, railroads and truckers are not interested in spot prices, either. According to the "e-gistics" report by New York brokerage Bear Stearns, "Spot auctions won't thrive, mostly because big carriers don't want to become commodities differentiated only on price."

But that's fine for now for many of the dot-coms. "Some may consider that the low-hanging fruit," says Sanjay Joshi, chief marketing officer for Freightwise.com, an auction site trying to capture Latin American cargo coming through the Gulf of Mexico and going to the U.S. hinterland by truck or rail. "But usually any company fails to forecast about 20% of its company needs. It's inevitable."

In Latin America, dot-coms are comfortable with spot cargo but they are trying to prepare for the future. Tony Migliore, the head of NetEnvios.com in Buenos Aires, says his company has already sought partnerships to provide logistics solutions for its customers, instead of providing just a day-rate.

An overwhelming number of the 600 or so users of Rightfreight.com, an airfreight site, is checking on the spot-market prices, says Marketing Vice President Lane Butler. But, he adds, dot-coms that dwell in this price-driven arena are going to have a tough time. His company, too, wants to plug customers into much more involved services that examine their entire logistics process.