E-Commerce Chemistry Just Right for Yellow Corp.

NEW ORLEANS -- In an experiment that has an element of risk to it, Yellow Corp. is providing transportation services for eChemicals, a company that uses the Internet to match buyers and sellers of industrial chemicals.

With the click of a mouse on eChemicals' Web site, customers order directly from manufacturers, and delivery is automatically provided by Yellow Freight System, the carrier company's less-than-truckload freight subsidiary.

In essence, eChemicals is a "virtual supplier." It does not stock any merchandise and has little in the way of concrete assets -- certainly no trucks. Its existence, for all intents and purposes, is confined to the electronic universe of the Internet.

Although it could be a source of new business for the freight carrier, eChemicals could also disrupt the market and cost Yellow business by eliminating middlemen who buy in bulk and sell to smaller businesses, said Rich Hardt, director of systems development for Yellow Services, a unit of Yellow Corp., Overland Park, Kan.

"Some of our bigger customers are chemical distributors," he said.

That is why Yellow officials are closely watching the effects this kind of electronic transaction has on wholesalers and others in the supply chain.

The word "e-commerce" is catching on as the short-hand reference to business and trade done on the Internet. As Yellow's eChemicals experiment shows, e-commerce can affect both the way a company operates and the market in which it does business.

For the full story, see the June 7 print edition of Transport Topics. Subscribe today.