Brand-name recognition problem raises its head

By By Brian Milligan -- Purchasing, 11/2/2000

Go to Freightgate.com for information on the freight transportation and logistics industry. Go to Freightdesk.com if you want online services for international freight intermediaries.

FreightLogic.com will help you find economical load plans. FreightMatrix. com bills itself as the only online community that can buy and sell logistics services. And Freightquote.com offers business-to-business freight solutions for shippers and e-commerce companies.

Freight-On-Line.com, GoFreight. com, RightFreight.com and Pfreight. com. The word "freight" appears over and over. And it isn't the only word repeated in this online landscape. Try typing the word "ship" into your search engine. You'll learn that ShipLogix.com offers a transportation management system via the Internet that links shippers, carriers and third-party logistics carriers. ShipRefund.com will help you use shipping software to lower your shipping costs. Shipcargo.com will get you to ASI International's international logistics site. And plain old Ship.com will introduce you to a network marketplace for the global transportation and logistics industry.

SmartShip.com, GoShip.com, Accuship.com, ShipNet.com, ShipChem. com, Shipper.com and ShippingAuction.com. They all pretty much offer variations on the same thing. And they all sound the same.

That's the problem. At least that's the way some players in the transportation industry see it.

"There's a lot of them," agrees Gene Corinescu, general manager of Hub Highway Services in Illinois. "At this point, there is a proliferation. You can't help but wonder when you see 50 or 60 names.

"Which one do you start with first?"

It's the sort of question that some purchasing managers say is keeping them from Web-based ordering. Jerry Wirl, maintenance purchaser for the Wisconsin-based Bremner, says problems like this are discouraging him from turning to the Internet.

"It's confusing when they all have the same basic name," says Wirl.

"I would forget who I was dealing with when they all have the same name," agrees Chizelle Gates, a buyer for the Texas-based Research Analysis and Maintenance. "It's like you see on TV when there's a commercial for Quotesmith.com. They just all sound the same."

A trend

It's a trend that's being mulled by Chris Newton, senior analyst for supply chain execution for the Boston-based AMR Research. Newton says AMR has found it a challenge to keep up with the proliferation of transportation exchanges. This is made all the more challenging by the similarity in the site names.

Many of the sites adopt the words "freight" or "ship" in their names. And it's causing confusion, he says.

"All of the names together sound virtually identical," says Newton. "It's a huge disadvantage.

"With the shippers and carriers they sell to, there is no way they are keeping it straight," Newton continues. "There is no way to build a brand around that. It is a big disadvantage to those companies."

Newton says AMR Research often fields questions from clients who are interested in using the sites, but are unclear on which one to turn to. He says AMR finds itself in a difficult position here, without much to go on.

"We tell our clients to look at the transactional volumes going through these exchanges," Newton says.

Some representatives from "freight"-named dot.coms staunchly defend their name choices. One is Jason McKinney, director of strategic accounts for the Kansas-based Freightquote.com. McKinney says he sees a lot of clarity in the marketplace, regardless of the many exchanges that use the words "freight" or "ship" in their titles.

"I don't think there is confusion in the marketplace," says McKinney. "I don't think it has anything to do with freight."

"If someone says they are dealing with Freightquote, they know that they are either dealing with freight or with quoting," McKinney continues. "They know at least that that is what they are trying to accomplish."

Key words

McKinney says many transportation exchanges are doing what they have to do. Namely, they want customers to be able to write a few key words into a search engine and watch as the Web sites spill out onto the screen. In order to be a player here, savvy exchanges are going to weave key words [freight and ship] into their names. It will put them on the map, he says.

"What we are finding is that a lot of shippers out there are constantly looking for better ways, better service, and different ways to move their freight," says McKinney. "And some of the key words they use are freight, shipping, broker. They need to be able to type in those and find us. We did that to acquire more business."

And some freight forwarders say they have no problem at all identifying with transportation exchanges that have similar-sounding names. The California-based Daylight Transport LLC, for example, has eagerly signed on to Freightquote.com. It chose Freightquote.com because it was an early player in the e-marketplace, and it offered the chance to take a lot of administrative burdens off of Daylight's shoulders.

"They've performed a large amount of administrative function for us," says Scott Riddle, director of marketing for Daylight. "What we've done is offer them pricing structure, and they provide the front end and experience for the customer."

Riddle believes customers can easily find the site and use it to zero in on carriers like Daylight. He says the only difficulty customers may find as they search the Web is finding a site that offers them the specific value that they need.

"Customers can go to the site, log in with a password, and be able to shop and compare service time for multiple carriers," says Riddle. "Freightquote. com later bills the customers for that shipment.

"Confusion is not a factor for us," Riddle continues. "Customers are simply choosing which [transportation exchange] they want to do business with. For us, this is just one additional avenue that we can use to build brand awareness and build exposure to customers that we may not have exposure with."

The consumer

In the end, Riddle says those who are skeptical about like-named transportation exchanges are forgetting an important factor: the consumer. Riddle says analysts often don't give the consumer the credit that they deserve. He believes customers are quite capable of sifting through multiple Web offerings and coming to their own decision based on their needs.

"Consumers are smart," Riddle says. "They will see through the offerings that are out there."

William Feit, materials and purchasing manager for the Ohio-based Powers & Sons, agrees that manufacturers and other consumers should be savvy enough to make good choices when it comes to picking a transportation exchange. Feit says purchasing managers by the very nature of their jobs are used to evaluating such choices and finding the right pick.

"Purchasing managers have to be able to go out and evaluate them based on what they show," says Feit. They should be able to take a look at the Internet, call a sales rep, and make their decision."

Still, despite all his faith in the purchasing trade, Feit finds himself scratching his head when he looks at the long list of similar-sounding transportation exchange offerings. There are just too many that sound alike.

"When you look at them on the Internet, I have to agree," Feit says. "They all sound very, very similar. It makes you wonder if only one company is behind them all, and it's very confusing."

Feit is not alone. Rus Aborn, co-founder of GoLogistics.com, says the strategy of using key search-engine words took off like a wildfire in the transportation exchange industry. But today, he admits, it has consequences.

"They are all trying to get the search engine to pick them up," says Aborn. "You just put in freight, and it will bring up their names. But I can't say for sure what they were thinking."

The wrong strategy

Today, Aborn believes, that strategy is backfiring because it relies too much on an accidental connection. And with seemingly more transportation exchanges blending the words freight or ship in each day, the strategy is getting weaker and weaker all the time.

"Personally, I don't believe the strategy of attracting members by getting a search engine to bring up your name is really a good B2B strategy," says Aborn. "How many carriers in the old days ever got a significant piece of business because some Fortune 500 company picked their name out of a phone book? I just don't think people will use it for that."

Representatives from LTL carrier companies like the California-based Viking Freight Inc. are starting to say the same thing. They say the proliferation of transportation exchanges with similar-sounding names is causing confusion in the marketplace.

"Absolutely, I think the cloud of confusion is very prominent," says Keith Lovetro, vice president of marketing for Viking Freight. "The exchanges are all trying to tie some element of freight into their name. But some people are saying, 'I can't even remember that, let alone the product they offered.'"

"There is a lot of confusion, and the consumer is being left kind of numb," he says.

But Lovetro says the problem goes deeper than simply name confusion. Lovetro says, in too many cases, there isn't enough value proposition coming from the exchanges. It is a double whammy, he says, that will hurt the industry in the long run.

"They haven't clearly defined their value," says Lovetro. "And if they haven't defined their value, why are they there?"

"How do you create uniqueness?" he continues. "And their names aren't helping them at all."

The tip of the iceberg

Lovetro says brand-name recognition problems will prove to be only the tip of the iceberg. He believes the exchanges should clear up the name problem. And then, they should focus on their offerings. They should offer more than just the chance to search for a lower price, he says.

"I have enough buying power for my carriers to get rates reasonably," says Lovetro. "So the value they bring to market is harder to place, in my mind."

Some exchanges that are caught in the cross-hairs of this problem, say Lovetro and others, are being too harsh. They admit that they find themselves facing brand-name recognition problems as the sea of exchanges with similar names swells. But then again, they still like their names. And they don't want to change them.

"You're right. There's tons of [exchanges with similar names]," says Frank Belsito, director of ocean services for the California-based Freightgate.com Inc.

Belsito says his company chose the name Freightgate because it describes a transportation portal or gateway. He says he likes the name, and the company has no intention of changing it.

But today, he admits, the name tends to blend in with many other sites. "Oh, there is tremendous confusion," says Belsito.

He says he feels pressured today to get both carriers and customers to notice his exchange. He takes an aggressive approach to the job. But still, the job can be challenging.

"They are confused by what they see on the Web sites," says Belsito. "My job is to go out and show them the value, how we have been successful, and that we have had a lot of activity."

McKinney of Freightquote.com also says his exchange is aggressively trying to market itself. This means doing everything it can to make sure that Freightquote's name is heard first-even if it doesn't pop up first in a vast Web search.

"We just proactively try to hit every single business in the country if we can and ask them if we can move their freight," says McKinney.

A disadvantage

Newton says this is the new plan of attack for many of the transportation exchanges. He says they are starting to think differently today. They realize that they are at a disadvantage, and they are trying to do something about it. Most, he says, are trying to break away from the pack by focusing on a specific mode, like truckload, less-than-truckload, air cargo or ocean cargo. More sophisticated sites flaunt multimodal shipping capabilities.

Some of the budding exchanges see this problem coming. They are taking the approach of adopting unique names that have nothing to do with transportation. One example of this is Solarix.com. Ironically, Newton says these are the transportation exchanges that are faring the best.

Newton likens this situation to Amazon.com, the giant online solution that sells everything from books to videos. The Amazon is a river in South America. Yet many people now easily associate the name with buying books and other merchandise.

"Solarix has routes in Latin for speed. But it doesn't have anything to do with transportation," says Newton. "It's a different name, and they've been able to rise above the others a little bit."

Gerard Beenen, vice president of business development for Neodesic Fleet Exchange, says today there is an almost professional envy for transportation exchanges that have cornered the market on unique but still-telling dot.com names. One, he says, is 3Plex.com, an exchange that focuses on third-party logistics. The name has the advantage of pointing out that it serves the third-party logistics industry, but at the same time offers uniqueness.

"They were very early in the game, and they could establish that identity," says Beenen.

"People have to create words to identify themselves," Beenen continues. "And branding is a challenge. Ideally, a good brand has to identify what you are doing, and you have to differentiate yourself. But a lot of folks are having trouble doing either."

Recognizable names

But while the pressure is certainly on exchanges from like-sounding names, even exchanges that have unique and enviable names say they are striving to rise above the pack. One is the National Transportation Exchange, which many say has one of the more recognizable names in the transportation exchange landscape. Steve Ford, a spokesman for the exchange, says the sheer volume in the marketplace is forcing it to keep moving and never rest on its laurels.

"It's a very crowded marketplace," says Ford. "And we do have to differentiate ourselves."

Ford says his exchange was careful when it chose its name five years ago. "We invested a lot of calories toward that effort," says Ford.

But while the company clearly does have brand-name recognition in the bag, company representatives weren't so sure that the NTE logo stood out enough. It is in the process of examining the multitude of logos used by other sites, right down to their colors and tag lines, to see how they compare to the NTE logo.

He says the NTE logo will soon sport a new look.

"Clearly, we want to separate ourselves from the rest of our customers," says Ford. "Cloudy to us means blurred. We need to be clear to our customers on what we offer."

Newton is quick to point out that the transportation industry is not the only online culprit when it comes to brand-name confusion. The same can be said for online MRO exchanges. Other industries, unfortunately, are following this lead.

The end result, as with the transportation industry, is always an injection of confusion into the marketplace, Newton says. And Newton says this confusion will no doubt accelerate the predicted consolidation for the exchanges. Many analysts believe that only a small portion of the some 100 transportation exchanges that now exist will still be around in another year.

"We talk to a lot of shippers who evaluate these exchanges," says Newton. "They come to us every day and want to know who will survive this shakeout. We tell them that some are gaining traction and have more name recognition than others. But there is still a cloudiness out there."

Newton says this "cloudiness," unfortunately, has led to something of a Catch 22 situation. Because of the confusion factor, a lot of shippers and carriers are waiting on the sideline to see which exchange will survive.

"They'll form their alliances then," Newton says. "But the problem is, if they do that, these exchanges will not get much transportation volume."

Some similarly named exchanges