A single route to e-comm

ABF Freight System wins Network World's 2001 E-comm Innovator of the Year Award with an elegant network design, truckloads of creative features and an open business philosophy.

By Julie Bort
Network World, 02/26/01

Innovation is easy when you start from scratch. If someone hands you a few million dollars in seed money to build an e-commerce infrastructure, you'd naturally use the latest and greatest technologies. But what if you work for a 65-year-old trucking company that relies on a mainframe? Could you best upstart dot-coms and traditional competitors in e-commerce features and functionality for years on end, without ditching those reliable, mission-critical mainframe applications?

E-comm Innovator of the Year Award Network World's annual E-comm Innovator of the Year Award honors companies with extraordinary business-to-business e-commerce initiatives. These innovators have advanced the use of e-commerce technology while supporting business objectives. They have carefully considered business plans, intimate knowledge of their customers and, of course, strong technology underpinnings. This year, we honor trucking firm ABF Freight System for building a mainframe-based e-commerce infrastructure that enhances customer service and opens new markets. Click here for more awards information...

ABF Freight System, a less-than-load (LTL) transportation company in Fort Smith, Ark., has wrapped an e-business infrastructure around its IBM 9672 R46 S/390 mainframe, saving more than $1 million per year in the process while providing a level of self-service never before available in its market. At the same time, e-commerce created a new business line and revamped virtually everyone's job, from how a regional vice president builds customer loyalty to how a customer service representative spends the day.

The same CICS and COBOL mainframe applications that ABF has long used to calculate pricing, trace shipments, schedule routes and review freight bills are now accessible via the e-commerce site, the intranet, Wireless Application Protocol-enabled (WAP) devices, imaging software, and even an old interactive voice response (IVR) system. ABF secures the transactions through what it calls the CICS Pipe, a custom-built protocol translation tool that wraps CICS around whatever front-end protocols an application uses.

Such integration contrasts sharply with the e-business norm: e-commerce technology silos built to jump-start Web efforts, but which now must be painfully integrated with existing back-end systems. Elegance in ABF's case stems from its e-commerce champions: IT folks.

Honorable mentions This past year was rich in innovation. Here's a roundup of other worthy projects culled from entries for Network World's 2001 E-comm Innovator of the Year Award. Click here for more...

With more than 14,000 employees, ABF earned $1.38 billion last year in operating revenue. As a wholly owned subsidiary, it represents the bulk of the income and profits of its publicly traded holding company, Arkansas Best, No. 772 on last year's Fortune 1000 list. ABF's e-commerce infrastructure, dubbed eCenter, boasts more than 23,000 registered users from more than 17,000 ABF customers. These customers generate more than 70% of ABF's annual revenue and shipment volume.

ABF has earned Network World's 2001 E-comm Innovator of the Year Award for serving as an example of old-to-new economy transformation.

LTL carriers such as ABF and competitor Roadway Express fill the niche between parcel carriers like Federal Express and full-truckload carriers like JB Hunt that specialize in huge shipments. With the dot-com boom of 1999, competition also sprung forth from virtual companies, such as freightquote.com and Transportation.com.

LTL carriers ship general commodities in loads that would not fill a truck; their core customers are businesses, not consumers - although e-commerce has allowed ABF to move into at least one consumer market.

Consumers are only a click away By creating a highway to consumers, e-commerce gave ABF Freight System a chance to develop a new line of business: U-Pack Moving. Click here for more...

Prices are calculated for each shipment using variables such as weight, volume, distance and the number of boxes. To complicate matters, carriers unilaterally offer discounts on most shipments, making custom quotes the order of the day. That is the prime reason ABF e-commerce champion Bob Davidson, vice president of pricing and marketing, lobbied to integrate an e-business infrastructure when ABF began experimenting with the Web in 1995. ABF wouldn't have even been able to offer an accurate price to e-commerce customers without tapping into or reinventing back-end mainframe applications, says Davidson, who, like nearly everyone running ABF's e-commerce site, has an IT background. He began his career as a programmer.

"This is a surprisingly technical company," Davidson asserts, noting that many vice presidents and business managers have college degrees in mathematics, engineering or the information sciences. For example, Michael Newcity, prior to becoming ABF's e-commerce manager, wrote much of the code for the e-commerce site, including a patent-pending application that illustrates shipments via a calendar.

Leaning on his IT know-how, Davidson based the company's e-business strategy on two concepts: One, the Internet would be the ultimate tool for customer self-service and, two, by separating business and presentation logic, core applications could remain on the steadfast mainframe while the front ends vary.

Davidson has experimented with self-service systems - via PC, IVR, fax-back and direct-dial modem applications - since 1983. "We had applications, but they were clunky. It didn't take a genius to see that the Internet gives you the standardized [graphical user interface]," he says.

Maybe not. But in 1996, this realization was so far ahead of the game, a day was looming when he would have to convince top management of his vision.

In January 1996, before Fort Smith even had a single Internet point of presence, ABF launched its first site. Customers could now download updated versions of a Windows-based rate application that ABF otherwise would mail to them on disk.

This FTP site cost next to nothing to deploy, but it didn't go far enough, Davidson says. By the summer, ABF was operating a self-service Web site that let customers map routes and trace shipments.

By the end of the next year, a customer could schedule a pickup and create a bill of lading - the formal document required for shipments. By early 1998, ABF customers could generate price quotes that included discounts, view images of shipment documents and review damage claim status, among other functions.

Photo caption: (from left to right) Bob Davidson, vice president of pricing and marketing for ABF; David Cogswell, director of technical services for Data-Tronics; and Michael Newcity, manager of e-commerce for ABF.

Then, in a move that would define the company's open attitude toward e-commerce, ABF added predictive e-mail alerts. Through these notices, ABF offers progress reports of a shipment in transit and alerts the customer to the probability that the shipment will be late. The data comes from a tool ABF uses internally for the same purpose. This service, Newcity notes, only became available on competitive sites late last year.

ABF executives, who in 1998 were so planted in the old economy mindset that they hadn't even adopted client/server technology, worried that customers would be angered if told a shipment might be late. But Davidson contended that ABF customers would actually benefit from and appreciate being apprised of shipment status. "You have to reconcile yourself to the fact that you are going to tell the customer everything, good or bad," he says.

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Davidson would be proved right. In October 1998, predictive e-mail notification went live. At the same time, ABF formally announced the e-commerce site as eCenter, after nearly three years of continuous development. "At that time, the site had already paid for itself four times over in cost savings," Newcity says.

For instance, prior to the e-commerce site, a customer would telephone customer service to trace a shipment, verify delivery or check on damage claims. The representative, in turn, would locate the necessary paper documents and fax them to the customer. As ABF added the tools, customers took on these tasks themselves, in real time and at much lower cost. ECenter cost $985,000 from 1996 through 2000 to build and maintain. Costs for 2000 alone were $425,000, while savings tallied $1.1 million - or $4,140 per workday, Newcity says. This adds up to a sweet return on investment of 139% for last year alone, he says.

As for losing customers over predictive e-mail alerts and other tell-all planning tools, the converse proved true, Newcity says. In a survey Newcity conducted in the third quarter of 2000, 93% of 54 eCenter user respondents said they benefited positively from using online applications. "Shipment visibility" was named by 68% as one of those benefits.

Last year, the eCenter user base nearly tripled, from 8,400 to 23,800 users. Newcity attributes the jump to a concerted effort to get the word out about eCenter. The company's 600 salespeople now train their customers to use eCenter, and the 25 regional vice presidents must visit with a customer every quarter and discuss how eCenter can be improved, says David Stubblefied, ABF CEO.

Better still, rather than tracing shipments all day, call center personnel can engage in pro-active, even income-producing, activities, Newcity says. "They can spend time helping customers through complicated logistics issues, like planning the distribution of a multistaged delivery," he says.

ABF grew the innovative features of eCenter throughout 2000 by introducing a variety of new functions, including Shipment Planner, Transparent Links, ABF Anywhere and Dynamic Rerouting.

The patent-pending Shipment Planner displays pending shipments in a calendar format. Transparent Links lets ABF customers incorporate shipping data from ABF's back end into their own systems via XML (see graphic at left). ABF customers typically use this feature to submit pickup requests, via XML parsing and style sheets, when they receive e-commerce orders from their Web sites. ABF Anywhere lets users manage shipment information and communicate with ABF with a Palm VII, Windows CE device or mobile phone equipped with Internet access and a microbrowser. Users can trace shipments and look up contact information for ABF service centers.

Dynamic Rerouting lets customers change the destination of an in-transit shipment or recall a shipment to the place of origin. Via the Web site, customers tap into a mainframe application that sends the new destination instructions to the proper ABF service center. ABF then e-mails a confirmation of the new destination and revised charges.

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Such applications rely on imaging software accessed via Tivoli Storage Manager, the custom CICS Pipe Web-to-mainframe conversion tool, and a simple but effective frame relay WAN.

Drivers en route check in at ABF service stations in 311 locations until they arrive at the destination terminal, where the shipment is scheduled for delivery to the consignee's address. At each checkpoint, drivers submit documents, such as the bill of lading, for scanning. The images are uploaded via FTP over the WAN to a DB2 database, running on Windows NT, located in Fort Smith. This creates a visual record; data records are created by scanning a bar code on each document.

ABF manages retrieval requests via Tivoli Storage Manager. Users can view bills of lading, proofs of delivery, packing slips and customs documents, then confirm delivery to their customers.

ABF's internal IT group, which is structured as a sister company named Data-Tronics Corp. (DTC), handles all hosting, application development and maintenance for eCenter. DTC, the centralized IT department for all four Arkansas Best subsidiaries, is also in Fort Smith.

Currently, the ABF network is "one big 10/100," says Dave Cogswell, director of technical services for DTC.

A Cisco 7500 router sits in front of the mainframe, sorting traffic from a series of application servers, today mostly running on NT (see graphic, page XX). These run the IVR system, FTP, custom bar code applications, the NT DB2 application (DB2 also runs on the mainframe), the Wireless Markup Language (WML) server, Tivoli Storage Manager, and a handful of other custom software objects mostly running on Microsoft DCOM. Various NT intranet application servers running Microsoft's Internet Information Server (IIS) 4.0 sit on the same network, Cogswell says.

A Nokia IP 440 service-provider-class firewall, which features Check Point Software's Firewall-1, routing and frame relay functions, links to the NT IIS public e-commerce host.

Award Presentation Network World will honor ABF Freight System at a ceremony Aug. 1, 2001, at IDG Expo's ICe conference in Las Vegas. Click here for more...

The CICS Pipe protocol-conversion gateway gets these IP-based front-end applications talking to the applications written in CICS or even COBOL and running on IBM Systems Network Architecture. Using IBM's Advanced Program-to-Program Communications and Common Programming Interface for Communications protocols, the CICS Pipe passes data from an NT application to a CICS transaction, waits for the transaction to process the request, and returns the results, allowing IIS to maintain a session.

With the CICS Pipe, programmers need not deal with the network protocols or even COBOL, says Craig Wahlmeier, senior technical consultant for DTC.

Alternatively, ABF could have used Microsoft's Open Database Connectivity (ODBC), which lets SQL queries pass through to a back-end database. However, ABF found ODBC to be less efficient and secure than the CICS Pipe, which encapsulates queries, Newcity says. "We have experimented with ODBC and have found that it works relatively well for small applications, but the performance degrades significantly when it is used for substantial applications like Shipment Planner."

One downfall of ABF's streamlined infrastructure is the training requirement. DTC aggressively hires graduates and trains them for six months on the mainframe.

"New people want to do all Microsoft ODBC and do everything on the front end. We have to fight that and tell them to use the Pipe. It's got better security, diagnostic tools, control - if someone's running up the workload, we can stop them," Wahlmeier says.

One strategy for calming hot shots is keeping the carrots of hot technology projects in front of them.

The next step for ABF is extending its network infrastructure without destroying the simplicity that works so well. The company plans to launch a three-city WAP pilot for drivers handling local deliveries. The WAP applications will let drivers input pickup information immediately, rather than waiting until they reach a service center at day's end, says Richard Bogner, DTC senior technical consultant.

DTC owns a WML server and will rely on the cellular carrier's WAP gateway, says Kevin Taylor, senior technical administrator for DTC.

Building a server farm and implementing load balancing are on tap for early this year, Cogswell adds. These would let ABF distribute Web content among multiple servers, combining failover redundancy with efficiency. ECenter operates on more than 65 servers; at least eight more are expected for the project. ABF also may turn to Web caching, particularly for graphics, if it makes economic sense, he says.

Likewise, Cogswell is considering replacing the expensive and relatively slow-speed frame relay WAN with VPNs and DSL service. The company is also considering building a second data center or perhaps hosting with a collocation provider.

While ABF watches its dot-com competitors swinging in the wind over the Internet stock correction, it knows that with its trucks, infrastructure and e-commerce innovation, it's traveling a profitable route.

Check out the winners for 2000 and 1999.

Contact Signature Series Senior Editor Julie Bort at jbort@nww.com.

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