FRAMINGHAM (08/23/2000) - General Electric Co. in Fairfield, Conn., has signed a letter of intent to become an investor in Fort Worth, Texas-based FreightWise Inc., the Internet freight transportation marketplace, created last October by Burlington Northern Santa Fe Railway.
The two companies haven't released details of the agreement, which they expect to finalize at the end of next month.
Powered by software developed by Manugistics Group Inc. in Rockville, Md., the Freightwise Web site will link buyers and sellers of truckload and intermodal transportation -- ultimately branching out into other modes of transportation -- allowing them to participate in auctions, as well as allowing shippers to buy transportation capacity based on carriers' published rates.
According to FreightWise, the Web site will make transportation management easier, more profitable and reliable for shippers, carriers and third-party service providers.
The company said the online exchange will enable shippers to better manage their transportation needs, allowing them to execute an entire transaction online. Customers will have the power to match loads and capacity, to tender agreements, to track and trace shipments and to reach financial settlement, all online at the FreightWise site. And the online exchange will allow transportation carriers to improve their access to customers as well as help them obtain better load-matching capabilities, the company said.
According to Greg Fox, president and CEO of FreightWise, GE's involvement will allow the online exchange to go "live" -- with a limited number of carriers and shippers -- by the end of next month.
At a time when many online transportation exchanges are vying to make a name for themselves, "GE's investment will add so much credibility to Freightwise and help differentiate us [from other e-marketplaces]," said FreightWise's Chief Marketing Officer Sanjay Joshi.
Joshi said FreightWise is in discussions with other major players that could become equity partners like GE.
Michael Bittner, an analyst at Boston-based AMR Research Inc., said having GE as an investor certainly lends credibility to FreightWise.
"This is very significant," Bittner said. "Who wouldn't want GE as a sponsor or equity partner? To have a major Fortune 5 company as an investor certainly adds credence and credibility to what [FreightWise] wants to do, especially if GE plans to be a major user [of the site]." Susan Breon, a spokeswoman for GE Transportation Systems in Erie, Pa., GE's lead company in this venture, said it's too early to determine to what extent GE will participate in the exchange as a shipper.
"We view this as an opportunity, and we may benefit by using this as a shipper," she said. "Because GE is an investor [in FreightWise], other GE businesses will benefit from this relationship."