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Quadrivius, Inc. — Harvesting e-business Opportunities
By Jim Ruiz, Director of Strategic Development, eflatbed.com

It is no secret that a turbulent marketplace is taking its toll on traditional metals companies and the new economy start-up companies serving them. Announcements of e-commerce initiatives and website launches are being replaced by declarations of lay-offs, shutdowns, and bankruptcies. Yet companies should not abandon their e-commerce initiatives but rather adapt to the situation -- recognizing that e-commerce initiatives and experiments create strategic options that can have profound impact. While the current reality in the metals marketplace has some companies focused on survival, leading companies will evolve their strategies to take advantage of opportunities created by e-commerce.

The evolution of Quadrivius, Inc. is one example of how sowing the seeds of e-business initiatives can blossom into additional strategic options for responding to marketplace conditions.

Quadrivius is a holding company that comprises Pittsburgh Logistics Systems, Inc.SM (PLS) eflatbed.com®, PLS International LPSM (PLSI) and InnerLink Strategic Solutions. Combined these four companies create value for metals industry clients by managing the flow of products and information. Early e-business initiatives created opportunities for the group of companies to change the way they operate, increase value delivered to customers and expand market opportunity.

The Changing Landscape
Quadrivius was born out of the transformation of PLS-- a leading third party logistics company focused on the metals industry-- into a technology-driven global logistics provider. Since its founding in 1991, PLS has provided its customers (mainly large shippers) with traditional outsourced logistics management services. However, by 1999, new “dot.com” competitors began to enter the logistics market, prompting PLS to assess how e-commerce was reshaping the landscape of its traditional market and how an e-logistics strategy could drive the company’s future growth.

In June 1999, PLS launched the initial version of eflatbed.com, a website designed and created as a quick, low-cost way to enter the e-logistics marketplace. Positioned as a virtual transportation exchange for shippers and flatbed carriers, the “proto-type” site served two purposes. First, it staked a claim for PLS in the rapidly emerging e-logistics marketplace. Second, the proto-type site was a vehicle to prove the concept and value of Internet-based systems in the trucking marketplace.

PLS’s initial investment in the eflatbed.com website, in effect, created an “option” for PLS to participate in the emerging e-logistics marketplace. The timing of the investment was key to the strategy: by entering the market early, PLS began to build brand identity and seize market share in the developing segment. Yet the investment was limited to the proto-type site, allowing PLS the option to exit the market if the concept did not prove valuable. Without this option, PLS risked being unable to respond quickly if e-logistics competition began attacking its core business.

Success Takes Root
Within the first six months, however, the eflatbed.com website did prove to be a value-creating tool. By the end of 1999, PLS had over 1,000 carriers enrolled as members of eflatbed.com, a 250 percent increase in the size of its carrier base. In addition, the eflatbed.com marketplace proved an excellent tool for effectively soliciting services for difficult to move “spot” loads. The real-time communication of spot-market needs helped carrier partners find “back-haul” opportunities, which improved their asset utilization and increased the available truck capacity to PLS. Having demonstrated the value of eflatbed.com, PLS decided to move forward with its strategy and take full advantage of the opportunities brought by e-commerce.

In early 2000, PLS spun-off eflatbed.com, inc., with a management team and organizational structure separate from PLS, but with common ownership. The mission of the newly formed company was to provide web-based transportation management tools to suppliers and users of flatbed trucking services. eflatbed.com was committed to creating an “industrial strength” version of the initial website that would evolve into a comprehensive transportation management system for the flatbed industry. To that end, eflatbed.com began building its brand name by marketing to both carriers and shippers, including small and mid-sized shippers not typically targeted by PLS.

A new eflatbed.com website, built with “top tier” technologies and enhanced functionality, was launched in June 2000. Like the proto-type, this tool was designed to facilitate the movement of spot-market loads and acquire and engage a nationwide network of flatbed carriers. Subsequent to the re-launch of the site, development quickly began on the additional set of tools that would help eflatbed.com evolve into a comprehensive transportation management system. These tools were designed to manage a shipper’s key contract relationships with flatbed trucking carriers and to manage the daily flow of transactions to these carriers.

In August 2000, the strategic decision was made to recombine eflatbed.com with PLS, as well as PLS subsidiaries PLSI and InnerLink, under a holding company, Quadrivius, Inc. In addition, a commitment was made to completely web-enable the companies’ core operations in order to create value for the companies, its carrier partners and its customers. The rationale behind this decision was to seize the unique opportunity to combine eflatbed.com’s leading-edge technology with PLS’s volume of flatbed loads and strong carrier relationships. Also being considered was the current market environment: the bubble had burst in the “dot.com” market and pure Internet plays were no longer as valuable an organizational structure. The new Quadrivius structure focused the organization on harnessing the power of each of the companies and moving them to the next level of opportunity.

New Opportunities, Repackaged Services
The new corporate structure was designed to facilitate three strategic initiatives, all made possible by the initial e-commerce investment.

First, the existing logistics management services were enhanced to create new value from information management. Additional web-based tools, launched by eflatbed.com in January 2001, closed the circle of information capture in the core PLS service offering, creating an unprecedented level of visibility and control. The basic logistics management services were enhanced to include options allowing customers to leverage this information to create new ways of serving their own customers. Powered by this information, the core service offering also evolved to include consulting services that identify additional areas of opportunity to unlock value within a client’s supply chain.

Second, eflatbed.com’s technology was also packaged as a stand-alone product focused on providing shippers a private network to manage their relationships with core flatbed carriers. This product extends the scope of Quadrivius’ services to include pure information management tools in addition to logistics management tools. These customizable tools -- marketed as Inner Circle Private Network -- are targeted to large shippers that want to enhance their relationships with their flatbed carrier partners. This product expands the services Quadrivius offers its traditional target market of large metals shippers.

Finally, new services were targeted to small and medium sized shippers, expanding the addressable market for the Quadrivius group of companies. eflatbed’s web-based environments create opportunities to efficiently engage small to medium sized shippers. In many cases, these companies do not have dedicated transportation departments or volumes large enough to justify an outsourced solution--yet these customers do have shipment management needs. To meet these needs two new services were introduced -- On Target Freight Exchange and One Point Shipment Management -- which are powered by eflatbed.com’s web-based tools.

Possibilities Flourish
By strategically applying e-commerce solutions the Quadrivius group of companies greatly enhanced its core logistics service and created new service offerings. As many companies in the metals industry face fundamental questions regarding company strategy, the Quadrivius approach demonstrates how e-commerce can yield opportunities. Strategic e-commerce initiatives, implemented in a scope and scale appropriate for the economic conditions, can grow into fresh possibilities for metals companies to harvest.

(This article appeared in American Metal Market’s March 27, 2001 “Metals in e-commerce” Special Report.)

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