Logistics Exchange Shuts Down

By Staff -- Logistics Management, 11/1/2000

A logistics software company has decided to shut down the logistics exchange it bought earlier this year. Applications vendor NeoModal, based in Charlotte, N.C., says it will close the ocean freight exchange, eRateRequest, which was based in Hoboken, N.J.

In closing the exchange, NeoModal said that eRateRequest's spot marketplace approach did not support the collaborative direction being sought by shippers, ocean carriers, and their customers. "Our decision to close

eRateRequest further emphasizes our strategic commitment to delivering balanced solutions to shippers, carriers, and transportation intermediaries in the global logistics industry," says Dick Murphy, chairman and CEO of NeoModal. "We are not in the business of delivering gains to one industry participant at the expense of another."

NeoModal, an application service provider (ASP), had bought eRateRequest to market its suite of supply chain management and global applications to the 3,000 registered users of the exchange. eRateRequest was one of the first Internet shipping exchanges that provided an online meetingplace for shippers to obtain space on ocean liners. Shippers had been able to post a desired freight rate or request the best rate from a specific carrier.

Over the past year, a number of entrepreneurs have created these types of online exchanges, which are designed to allow carriers and shippers to handle transportation-related transactions over the Internet. Yet analysts expect that many of the transportation and logistics exchanges started up this past year will be defunct by year's end.