Basin Commerce Shifts Business Model, Adds Quote Engine For Raw Materials Sales
In 2016, Tom Venable and Pete Olson began developing an e-commerce platform that they hoped would bring a new model for putting together barges and commodities in the quickest, most efficient manner possible.
The company, Basin Commerce, is headquartered in Excelsior, Minn. Its platform opened as iBookFreight.com. On September 28, the company announced its newest offering to the bulk freight logistics market, called Conduit.
In The Waterways Journal last fall, CEO Tom Venable described the company’s offering as “the first and only online marketplace where shippers of bulk freight can locate, purchase and manage transportation and logistics services on the U.S. inland waterways system.”
Once a potential customer sets up an account on iBookFreight.com, he or she could enter a request for a particular bulk movement. Basin Commerce would electronically solicit private and secure bids from its network of providers and present route and pricing options to the client. The platform was originally intended to be “commodity- and mode-agnostic,” able to put together bids that would include truck, rail, transload and barge components, said Venable.
In the course of developing the business since then, two things happened. One was the general upturn in barge rates in the first half of 2018 after a period of low rates. “For the first couple of quarters this year, booking barges was rough for our customers,” said Venable. “While demand for our services went up, the barge supply got very tight and expensive and out of reach.” Uncertainty about tariffs and export cargoes has also affected the business, he said, as it has affected most other aspects of the barge business.
But more important, in working with and listening to customers, Venable and Olson learned what many other product developers have learned about the inland barging world: it’s different from the blue-water world.
In particular, they learned that the inland market is divided into infrequent and frequent shippers. The infrequent shippers were more comfortable with the public platform, but the frequent shippers’ business was more about maintaining ongoing relationships.
“The blue-water shipping world is more fragmented and has more choices,” said Olson, whose title is chief builder. The inland barging world, by contrast, is smaller and has longer-standing, closer relationships. “What we kept hearing from frequent-shipper customers,” said Venable, “was that they didn’t want a new visible middleman inserted into a long-standing relationship. They wanted what our services gave them, but their own version, with their own branding.”
“Since the launch of iBookFreight in April of 2017, we actively listened to the market’s feedback and it became very clear that frequent bulk shippers want their own platform versus using a public marketplace to find and buy barge freight and other bulk logistics services,” said Olson.
So Basin Commerce developed Conduit, which it calls “an industry-first quoting and operations engine for buyers and sellers of raw materials.” Similar to iBookFreight.com, Conduit streamlines and organizes the manner in which freight buyers acquire and manage bulk transportation services like barge, truck and rail. Conduit is a shipper’s privately branded quoting and management workflow platform for their network of transportation partners. All freight purchases are done directly between the shipper and the partners.
Delivered as software-as-a-service, Conduit is designed to help shippers save time, uncover price anomalies and manage operational data. Shippers quickly enter transportation data once in Conduit, thus eliminating redundancy and reducing costly errors.
“It’s a private-label version of what we currently offer to infrequent shippers,” said Olson. “It’s all under their brand, but with our software still doing the work.” The software is licensed under a monthly subscription model. Shippers of raw materials that utilize Conduit will, the company says, realize standardized quoting processes and business terms, operational data management and insights along with analytics driven knowledge to optimize their logistics budgets.
Olson continued, “We take a ‘start with the customer and work backwards approach’ to product strategy, which gives us the confidence of market fit with Conduit. iBookFreight will continue to serve the infrequent shipper market, while Conduit meets the needs of frequent shippers. We are excited to bring 21st century technology to both of these market segments.”
It helps that Basin Commerce is still the only software company operating in this particular space. “As far as I know, we are the only neutral third party that has built a platform for quoting bulk freight,” said Venable.