IN 2005, 21% OF TOTAL EUROPEAN LOGISTICS WILL BE ONLINE, FORRESTER
CALCULATES


AMSTERDAM, Netherlands, 22 August, 2001 . . . Total online logistics
revenues will grow to 133 billion euros by 2005, equaling 21% of logistics
overall, as freight exchanges die out and make room for a network
consisting of logistics hubs, eMarketplaces, and private hubs, according to
a new report from Forrester Research B.V. (Nasdaq: FORR).

"European executives are right to be bullish about online logistics -- we
project that as a result of increased international online trade, the use
of the Net to monitor and move goods will grow fifteenfold within the next
five years," said Forrester Senior Analyst Charles Homs. "Almost a third of
online logistics revenue will be generated through combined support
services, and with logistics moving to the Net, primary transport
activities will not dominate. Trucking will become king of the information
highway with 69 billion euros; indeed online logistics transactions for
road transport will amount to more than 50% of the total online logistics
activity. Transport support services will capture 20% of total online
logistics, making these supporting activities the second largest logistical
activity and amounting to 35 billion euros by 2005. Finally, airfreight
will benefit from online logistics, but will remain small, as only 3% of
all airfreight-related logistics activities will go online by 2005."

Forrester argues that as industries pick the optimal transportation mode,
they will also have to choose which online venue best suits their product
characteristics and supply chains. Construction will take the lead in
moving logistics online, and although the industry spends only 5.2% of cost
of sales on logistics, the total logistics costs will amount to 137 billion
euros by 2005. Paper and office products will perform well in public
eMarketplaces, and as logistics costs surge to a whopping 15 billion euros
by 2005, this category will account for almost a third of the total
logistics costs tied to public eMarketplaces. Logistics for consumer goods
are among the most expensive cost items, taking 10 percent of cost of
sales. The perishable nature of the products and the complexity of
packaging and routing consumer goods transports are the main reason for the
high costs. Even though EDI and bilateral trade make up the bulk of the
consumer goods trade, private hubs will rise quickly in importance.

"As many public eMarketplaces die out or transform to private hubs, firms
will seek an online connection to logistics providers. Fourth-party
logistics providers (4PLs) also offer the IT infrastructure required for
logistics and will pick up the logistics tasks unfulfilled by
eMarketplaces. With their vast amounts of internal resources, unsurpassed
industry knowledge, and established IT infrastructure, 4PLs will become
hubs in the eBusiness network. While the road to online logistics will not
be smooth, the online logistics industry in its entirety will evolve over
the next four years to serve the respective opportunities," Homs added.
"Firms tracking their move of logistics to the Net must act immediately on
direct benefits. And as this space evolves over the next two years, firms
must analyze online logistics needs by online venues, they must tie online
sales into online logistics, and finally, they must defragment the supply
chain to benefit from online logistics."

For the report "Europe's Online Logistics Push," Forrester interviewed 30
logistics executives at large European firms to understand their use of the
Internet and eMarketplaces for logistics activities.