Old-Line & On-Line.

• Author: KAELBLE, STEVE
• Position: Indiana businesses utilize the Internet

How some traditional Hoosier businesses are doing e-business

"Ninety-five percent of the trucking business is very small companies," says the CEO of one of the nation's biggest trucking firms, Indianapolis-based Celadon. Steve Russell's company ranks ninth in the country, and because of its size enjoys significant volume discounts when buying fuel, tires, insurance, hotel rooms and a host of other things important to truckers.

What about the other 200,000 or so players in trucking? Most of these small players have had to pay retail. Not anymore. Celadon in February launched an on-line business-to-business venture called TruckersCo-Op.com, a buying cooperative that brings volume discounts to even the smallest players in the business.

Percentage discounts can range into the double digits, and even the smaller discounts can add up quickly. The co-op, for example, can save truckers 3 cents or more per gallon of diesel fuel, which adds up to a savings of $540 per year for the average truck. Hotel discounts can be $12 or more per night. A company operating 20 trucks whose drivers average two overnight stays a month can save more than $16,500 annually, just on diesel and hotel rooms. The co-op, meanwhile, makes its money through commissions paid by the participating vendors.

It turns out that truckers are hungry for good deals. Celadon launched its site hoping to sign on 5,000 truckers in the early months. But by the time the site went live a month after its announcement, more than 20,000 were signed up for discounts, and within another month enrollment was up to 80,000 trucks.

One might wonder why Celadon would want to launch a side-line that helps its competitors, but it's a no-brainer for Russell. The new venture's profit potential would seem to far outweigh any potential downside. And equally important is the fact that three-quarters of Celadon's trucking business involves shipments to and from Mexico, a focus not shared by most of those benefiting from TruckersCo-Op.com.

Even before launching the co-op, Celadon already was fully engaged in e-business. Celadon customers are able to transact business with the company and track shipments through its own Web site.

NEW SPIN ON TIRES

Never considered buying tires through the mail? Perhaps you've never tried to buy tires that are somewhat out-of-the-ordinary.

Tire Rack, based in South Bend, is a leader in what the mail-order business now calls "customer-direct" sales of tires and wheels. Founded in 1979, within five years of its birth Tire Rack was in the mail-order business and closing the doors of its traditional tire-shop operation. As a mail-order company, Tire Rack can offer a much greater selection, build technical expertise and offer savings, says Matt Edmonds, director of marketing.

Moving onto the Internet made sense for Tire Rack because it already was in the customer-direct business. The company turned on its tirerack.com Web site in 1996 and began accepting tire orders on-line in the fall of 1998.

Even though it already was direct-marketing tires, putting the Tire Rack on-line was no piece of cake. "For us, it was a real challenge," Edmonds says. That's because of the vast number of brands, models and sizes Tire Rack carries, as well as its commitment to funnel Internet orders directly into the company's...