When DuPont Corp., the self-billed "science corporation" based in Wilmington, Del., searches for words to describe its private Internet transportation portal, it often uses metaphors drawn from the automotive side of its business. That portal—or exchange, as it's also known—says DuPont spokesman John Stowel, "will be the engine that will drive our global logistics operation."

Right now, that metaphor seems particularly apt. At this point, the company's Internet portal hosts the exchange of logistics data among employees in one business unit with about 50 motor carriers.

But that's likely to expand markedly by the end of the year. If all goes according to plan, the portal—dubbed "TransOval"—will soon manage all of DuPont's global freight movements, both inbound and outbound, via ocean, rail and air as well as truck. "TransOval was created to address the need for improved decision-support information globally," says Jerry Reynolds, manager of DuPont's global logistics technology and process. "TransOval will provide integrated logistics decision-support information and visibility across the entire supply chain."

What does the company expect to gain? Information, for one thing, answers Reynolds. DuPont's businesses, customers and suppliers then will use this information in a variety of ways. Ultimately, he says, that information will "increase transport security, reduce inventory levels, decrease freight costs, improve operational efficiencies, and deliver superior customer service for our more than one million worldwide shipments each year."

Given the company's shipment volume, it's easy to see why the 200-year-old DuPont has been quick to investigate new technological developments that could streamline its huge logistics operation. The 70th largest corporation in the United States, DuPont reported $24.7 billion in sales in 2001. With a host of well-known brands such as Teflon, Dacron and Tyvek, the company makes chemical- and other science-based products for such markets as food and nutrition, health care, apparel, home and construction, electronics and transportation. It operates about 135 manufacturing plants in 70 countries.

As befits such a large multinational manufacturer, DuPont has a far-flung logistics operation. Its transportation budget last year amounted to $1.2 billion. It makes between 4,000 and 5,000 shipments a day to customers in different parts of the world. It's also one of the largest U.S. exporters of containerized freight, moving about 1.5 billion tons overseas each year. In fact, ocean freight accounts for around $300 million—or 26 percent—of that annual transportation budget. Motor carriers, however, receive the bulk of DuPont's freight dollars, about $500 million—or 44 percent of the company's annual budget. DuPont spends another $300 million on rail and $50 million on air shipments each year.

Two years ago, when the company first heard about shippers that that were building private exchanges—virtual meeting grounds on the Internet for communicating with carriers and suppliers—DuPont began to consider whether it should set up an exchange of its own. "We were frustrated at being unable to control costs," recalls Reynolds. "At the same time, you had e-businesses and dot-coms appearing on the scene with all the technology and Web-based applications. We put together a team to look at those products and decide on the right strategy for DuPont."

In May 2000, that project team recommended the creation of a private exchange, since built and dubbed "TransOval." (The name "TransOval," originally the name of DuPont Europe's logistics operations group, is now a registered Web site domain owned by DuPont.) The private exchange today is incorporated into the company's extranet, with a firewall for safety between the company's computers and the Internet. "TransOval creates an umbrella Web site under which we link everything to do with logistics," explains Reynolds. "It gives people [at DuPont] one place to go for everything they need."

In a departure from the company's past practice, DuPont's project team decided to buy the technology needed to create the private exchange rather than build the portal itself. "In the past, we developed or contracted for the software ourselves," Reynolds says. "This is a break from tradition in that we're using off-the-shelf products."

The next step was to talk to technology vendors. "We saw a lot of glitzy PowerPoint presentations," Reynolds recollects. "But we were looking for people who were survivors. We took a hard look at the technology and financial stability of the people involved and their vision."

In the end, the company bundled together some off-the-shelf applications with several of its own creations. For example, it uses an internally developed global document and printing technology that lets DuPont logistics managers anywhere in the world print out documents like bills of lading and customs forms. But it is also using the GC3 global control and command-center engine developed by the Shelton, Conn.-based network vendor G-Log. That engine lets logistics managers at DuPont plan and execute shipments as well as select the best carrier for a freight movement based on the rate, route and schedule.

DuPont also bought the technology it uses for handling marine contracts. The vendor in this case is GT Nexus Inc. of San Francisco. The GT Nexus application electronically stores, manages and updates DuPont's ocean transportation contracts. Once it's up and running, the GT Nexus application will feed ocean rate data into the GC3 engine, which will be used for rating, routing and planning ocean shipments.

This past August, DuPont began using TransOval in the first of its 22 business units, the Packaging & Industrial Polymers Group, which is now exchanging data with more than 50 motor carriers. By the end of this year, Reynolds says, DuPont will have rolled out TransOval to its entire U.S. operation. Plans for next year call for adding Europe to the private exchange and starting on incorporating the Asia Pacific region.

Eventually, TransOval will cover the full gamut of transportation modes. Reynolds says that DuPont plans to tie its rail carriers into the system by the end of this year, while its arrangement with GT Nexus will allow it to link up with ocean carriers shortly thereafter. As for air, Reynolds says that TransOval will eventually accept data feeds on shipment status from air carriers, though he expects DuPont to continue using the air carriers' own systems to tender air freight.

Even DuPont's third-party logistics provider (3PL) is starting to use the TransOval system. APL Logistics of Oakland. Calif., which manages its client's day-to-day U.S. shipments, is currently booking the motor carriers used by DuPont's Packaging & Industrial Polymers unit through TransOval.

What kind of returns does DuPont expect from its investment in TransOval? The company reports that early indications are that it will bring a variety of benefits. "We think we're seeing better optimization, consolidation and planning coming out of the module compared to our legacy systems," Reynolds notes. Because the GC3 engine has facilitated load planning on certain shipping lanes, Reynolds says that TransOval appears to have opened up many opportunities for consolidation. Due to that consolidation, he adds, "we have gotten an indication that we will benefit from lower costs."

Along with these cost savings, Reynolds says that his company is seeking visibility. "We are looking for one global system, one global database. Through global visibility, we will have better management of the supply chain and take out inventory."

Then there's the security issue. At a time when governments are increasing their scrutiny of cargo crossing their borders, he says, TransOval will likely help his company meet the new, stricter security rules. "It may be the answer for the government requirements," he notes.

On top of that, Reynolds says DuPont expects TransOval to act as an early warning system. The new system will be able to flag problems such as shipment delays and send out notification alerts to the affected parties. "If you have thousands of shipments, you can't manage those manually," says Reynolds. "It becomes efficient to set up exception management. It allows you to respond quickly to a ... problem."

As for the company's customers, DuPont hopes that the ability to exchange logistics and shipping information will allow it to work more closely with its customers and control inventory in the supply chain. "We hope to satisfy customer needs for information about shipments, enhance the safety of distribution by knowing where products are, and speed up the flow of goods through the supply chain by getting the information to where it needs to be faster," says Reynolds. "The net result of all this is to reduce inventory."