Professional Documents
Culture Documents
CONFIDENTIAL
CONTENT
Executive Summary
1. Industry overview
• Business concept
• Competitive landscape
• Financials
• Implementation
Appendix
1
Confidential - Emerald Internet Ventures
EXECUTIVE SUMMARY
The development of e-commerce will fuel the size of the market further
Ù The surge of electronic commerce will add to the number of shipments by promoting trade across geographies
Ù Additionally, the frequency of shipments will increase as a result of more coordination and communication across companies.
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Confidential - Emerald Internet Ventures
High-margin business
Ù This web-enabled intermediary model willbenefit from lowcapital intensity andhigh operational leverage. Resulting in high
operating margins (50%) similar to those of other virtual marketplaces (e.g. Ebay, CommerceOne, etc)
Success will be based on early alliances and partnerships with key players
Ù To begin operations NETLogistiK will develop alliances and partnerships with key forwarders, carriers
and shippers using stock
options
Ù Shipper acquisition will be through joint marketing agreements with B2B verticals and through targeted sales efforts focused o
leading brick and mortar companies.
Similar models are working in the U.S- Latin America is still up for grabs!
Ù Similar business models are already working in the U.S (e.g.,
CarrierPoint, Celarix, NTE,). Investors seem to have great
confidence in this business model. US players have received
over $50 million in funding. Successful IPO’s may follow.
Ù The European market has seen some sites coming to market. However, it is behind the U.S. and still in a very early stage.
Ù Latin America is largely untapped. There is no competitor that has entered this region capable of rationalizing the transportatio
market yet.
1 in line with industry standards(e.g.,cargowerks charges 2.5%, carrierpoint charges4.0%, and an average forwarder marginsis 12%) 3
Confidential - Emerald Internet Ventures
People
Structured initial phase teams for Mexico and Argentina. In the process of recruiting more
logistics/ transportation industry experts. In
conversation with key people in Brazil.
Advisory Board.
In the process of structuring an advisory board with industry experts and influential business people
e.g.( CEOs of leading
companies, Industry experts, etc.)
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Confidential - Emerald Internet Ventures
CONTENT
Executive Summary
1. Industry overview
• Business concept
• Competitive landscape
• Financials
Appendix
5
Confidential - Emerald Internet Ventures
ESTIMATE
Ship
9% •Within this mode large size
73% shipments (LTL and TL) account
Trucking for 87% of the revenue
Source:S&P, Journal of Commerce, McKinsey & Company, SCT, GEIPOT, US Department of Commerce
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Confidential - Emerald Internet Ventures
ESTIMATE
Latin America
55 US
255
Europe
Source:S&P, Journal of Commerce, McKinsey & Company, SCT, GEIPOT, US Department of Commerce Source:
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Confidential - Emerald Internet Ventures
70
55 … the industry is highly fragmented,...
• Top 10 players have less than 2 % of market share
• Shippers have to rely on several carriers to fulfill their shipping needs
26
12
* Includes commercial transportation in all modes; does not include inter-regional transportation
Source: Standard & Poor’s; Med Ad News; Goldman Sachs; IMT; SCT; IBGE; GEIPOT
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Confidential - Emerald Internet Ventures
ESTIMATE
50-60
18-20
•Additional transparency and
reduction of inefficiencies may have a
dramatic impact on these countries
productivity
Brazil Mexico Argentina Others* Total
•Therefore, support from local
governments is expected
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Confidential - Emerald Internet Ventures
Number of trucks
700,000
Source: Instituto Mexicano de Transporte, Comision Nacional del transporte terrestre (Argentina), GEIPOT(Brazil), Interviews
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Confidential - Emerald Internet Ventures
CONTENT
Executive Summary
1. Industry overview
• Business concept
• Competitive landscape
• Financials
Appendix
11
Confidential - Emerald Internet Ventures
BUSINESS CONCEPT
Carriers/
Shippers/ Transportation
Senders Companies
Services/Products
• Spot contracts marketplace
Warehouses • Excess capacity auctions
• Multiple/ complex shipment negotiation tools
• Cargo insurance
• Customs and tax advisory
• Warehousing and cargo management
NETLogistiK • Infrastructure hosting
Freight intermediaries and • Clearing and payment options
consolidators* • Others (vertical market of spare parts)
Latin American
B2B Verticals
B2B Logistics
Marketplace
Today Future
Forwarders
Warehouses
Forwarders
Warehouses
Shippers Carriers
B2B Verticals Shippers B2B Verticals Carriers
From... To...
• Many layers of intermediaries • One-stop-shop option
• Manual/ time-consuming purchasing process • Simpler /automated purchasing process
• Lack of price transparency • Liquidity reduces prices and costs
• Sub-optimal truck utilization (e.g., trucks return • Wide access to network of shippers/carriers
empty from destination)
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Confidential - Emerald Internet Ventures
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Confidential - Emerald Internet Ventures
NTE Real time exchange that focus on Ariba, HP, $50 million
using transportation capacity Resource Link, in fourth round •This is a proven business in
efficiently. NTE acts as a broker , SAP, Manugistics the US and Europe
setting minimum prices
• Investors already bought-into
the concept, investing over
$50MM in some of these
companies
* Although it started in mid 1999, CarrierPoint seems to be the company that is developing at the fastest pace
Source: Webpages, press clippings, interviews
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Confidential - Emerald Internet Ventures
CONTENT
Executive Summary
1. Industry overview
• Business concept
• Competitive landscape
• Financials
Appendix
16
Confidential - Emerald Internet Ventures
NETLOGISTIK FUNCTIONALITY
Shipper Carrier
• Origin/Destination
• Cargo specifications • Rates
Post • Routes Upload rates
• Dates
requirements • Others • Services and availability
•Preferred carriers $
•Highly rated carriers Define price discrimination
Select
structure
audience
• ________ ¬¬ • ________ ¬¬
• ________ ¬¬ • ________ ¬¬
Receive list of • ________ ¬¬ • ________ ¬¬ Receive notification of
• ________ ¬¬ • ________ ¬¬
quotes and select shipper's request for
best option service
•Electronic scheduling
Settle
on-line
$ •Intelligent search capabilities
•Neutral one-stop-shop
Upload tracking status of
shipments
•Capacity, availability and pricing
•Data, information and news
Track
shipment
$ Settle
on-line
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Confidential - Emerald Internet Ventures
PRODUCT OFFERING
Allow carriers to auction their excess capacity in order to optimize truck utilization (return trips) 2.5-3.5% of transaction value
2. Excess capacity
auctions
Real-time marketplace for spot contracts between a pre-selected network of carriers. The users will be 2.5-3.5% of transaction value
able to optimize their fleets and leverage their sales force
3. Intra-carrier exchange
4. Multiple or complex Longer term and/or special contracts that require price and conditions negotiation tools. Specially 2.5-3.5% of transaction value
targeted to large shippers (e.g. Coca Cola, Xerox, etc)
shipments negotiation
tools
Offer the possibility of buying cargo insurance online. This product can contribute substantially to 15% of Insurance premium
revenues as insurance premiums are usually 1% of the cargo value and standard commissions for
5. Cargo Insurance
insurance brokers are 10-15%
Offered through a referral network of experts that will have alliances with NETLogistiK. The company TBD
6. Customs & tax will charge a flat fee for each referral to its partners
advisory services
Offered through a network that will operate similarly to the one for Customs and tax services. 15% of referral value
7. Warehousing and
cargo management
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Confidential - Emerald Internet Ventures
CONTENT
Executive Summary
1. Industry overview
• Business concept
• Competitive landscape
• Financials
Appendix
19
Confidential - Emerald Internet Ventures
Multimodal
Air/Ocean
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Confidential - Emerald Internet Ventures
COMPETITIVE LANDSCAPE
Freightonline Ctransport
Ocean or CargoNet GoCargo
rA
i PriceContainer eraterequest
Oceanwide GF-X**
CargoWerks **
• Although the competitive landscape is very • The European market has seen some sites • Despite its attractiveness, the Latin American
populated, there are not many players that coming to the market market is not competitive yet
provide full service and end-to-end transaction
solution • However, it is behind the U.S. and still in a very • The opportunity is open to the first player that can
early development stage offer a robust solution
• We believe that the industry leaders at this point
are: Celarix, CarrierPoint, NTE andGo Cargo, in • No player has taken a dominant position in the
their respective segments market yet
* Low level of Development: Info Aggregators, Searchable bulletin boards. Limited amount of value added services.
High Level of Development: Dynamic, deep exchange .Value added services. High transaction capabilities
** Air
*** Future Development 21
Source: WebPages, NETLogistiK team analysis
Confidential - Emerald Internet Ventures
Low
Medium
High
Celarix.com A more robust service; includes more than one mode; plus other logistic management software tools U
S Multimodal
Tradematrix.com Part of a family of other web-enabled B2B services; sourcing, procurement, etc. U
S Multimodal
Manugistics.com Not an exchange; provides logistics and supply chain mgmt. applications U
S Multimodal
from 2 Shipping solutions for online purchasing. Proprietary tax and customs calculators U
S Multimodal
lsxs.com Basically a searchable database, with customizable pages and automatic messaging EUR Multimodal
Freightgate.com Tracking, news, and some useful tools E
U
U
RS
/ Multimodal
CarrierPoint.com A robust dynamic matching and pricing marketplace; has payment processing and on-line insurance U
S Truck
NTE Focused on carriers; freight posted has a minimum price; robust tracking and payment processing services U
S Truck
OpenShip.com A pure auction service for truck space; offers some tracking capabilities U
S Truck
BidFreight.com A pure auction service for truck space; offers some tracking capabilities E
U
U
RS
/ Truck
FreeCargo.com Searchable database for available equipment and loads E
U
U
RS
/ Truck
Truckstop.com A load and truck availability posting service U
S Truck
Eurotrans.com Searchable database by routes; for truckers; not many other services EUR Truck
NetEnvios.com A website that focus on providing services for small package/parcel shipments in Latin America. Not Cargo LAT Truck
Transplace.com A web-based supermarket for the transportation industry created by incumbents U
S Truck
GoCargo.com A pure auction service for container shipping space U
S Ocean
Eraterequest.com Carriers bid on shippers postings; limited to ocean shipping U
S Ocean
Freight-on-line.com On-line quotation system EUR Ocean
Cargonet.com Marine towing industry; a database to advertise shipping needs and space/equipment availability U
S Ocean
Pricecontainer.com Acts as intermediary; only ocean containers U
S Ocean
Oceanwide.com Offers information services; quotes, schedules; facilitates document exchange U
S Ocean
etransport.com Exchange and tools for negotiating contracts and checking rates; software solutions for industrial transportation industry U
S Ocean
Cargowerks.com RFQ service; arrangement all made outside the exchange U
S Air
Global Freight Exchange Focused on transactional issues; for air carriers and forwarders E
U
U
RS
/ Air
* Note: This page contains information that may become outdated shortly due to the speed at which these companies are evolving.
Source: WebPages, NETLogistiK team analysis
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Confidential - Emerald Internet Ventures
CONTENT
Executive Summary
1. Industry overview
• Business concept
• Competitive landscape
• Financials
Appendix
23
Confidential - Emerald Internet Ventures
KEY STATISTICS
Latin America
MEXICO VENEZUELA
•GDP*: $475bn •GDP*: $104bn
•GDP Per capita $4826 •GDP Per capita $4394
•Transport. Rev: $14-19bn •Transport. Rev: TBD
COLOMBIA BRAZIL
•GDP*: $92bn
•GDP*: $509bn**
•GDP Per capita $2438
•GDP Per capita $3105
•Transport. Rev: TBD
Transport. Rev: $18-20bn
CHILE ARGENTINA
•GDP*: $69bn •GDP*: $287bn
•GDP Per capita $4587 •GDP Per capita $7947
•Transport. Rev: TBD •Transport, Rev. $10-11 bn
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Confidential - Emerald Internet Ventures
PRELIMINARY ESTIMATES SHOW THAT NETLOGISTIK HAS A HIGH REVENUE POTENTIAL PRELIMINARY
Revenue Potential
$ Millions 400
•Preliminary estimates show that NETLogistiK could generate between
$150-$400 million in revenue after 3 years of operations (see details in
following pages)
250
•These revenue numbers do not include other potential revenue sources
(option value) that could become available once NETLogistiK captures a
significant number of players on its network (Net effect).
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Confidential - Emerald Internet Ventures
* Revenue generated by the carrier per truck. Consistent with range obtained during interviews with carriers ($65,000-100,000)
** Assuming that referral fee is 10% of the insurance premium. Insurance premium ($140) = Value of cargo ($14,000)*Insurance rate (1%)
*** We assumed that after 3-4 years NETLogistiK is able to capture 200 of the 250 trips that a truck makes per year
Source: Economy Ministry, Interviews, NETLogistiK Team Analysis.
26
PRELIMINARY REVENUE FORECAST- BY REGION Confidential - Emerald Internet Ventures
$ Millions; No. of Trucks
ESTIMATE
REVENUE-ARGENTINA TRUCKSCAPTURED-
ARGENTINA
4
7
. 00051
2
3
3
. 00501
0
0
06
0
1
0
. 0
0
03
00
. 22
. 0
3
0
0
02 1
0
02 2
0
02 3
0
02 4
0
02 0
0
02 1
0
02 2
0
02 3
0
02 4
0
02
REVENUE-BRAZIL TRUCKSCAPTURED-BRAZIL
00053
61
.
0
00542
4
7
7
.
00041
Total Revenues
4
2
3
. 0
0
07
82
.
5
52
. 0
7
01
.
01
.
3
7 0
0
02 1
0
02 2
0
02 3
0
02 4
0
02 0
0
02 1
0
02 2
0
02 3
0
02 4
0
02
REVENUE-MEXIC0 TRUCKSCAPTURED-MEXC
IO
4
9
.
2
1
0
.
01
.
3
5
5
. 00571
0
0
02 1
0
02 2
0
02 3
0
02 4
0
02
7
3
8
. 05221
0
0
07
7
1
1
. 0
0
53
26
. 0
5
3
00
.
0
0
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0
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0
02 3
0
02 4
0
02 0
0
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0
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0
02 3
0
02 4
0
02
REVENUE-OTHER TRUCKSCAPTURED-OTHER
00521
5
3
9
.
0
0
57
7
2
3
.
0
0
52
00
. 02
. 42
. 0 0
5
2
0
0
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0
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0
02 3
0
02 4
0
02 0
0
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0
02 2
0
02 3
0
02 4
0
02
27
Confidential - Emerald Internet Ventures
FINANCIAL STATEMENTS
Units; Percentages
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Confidential - Emerald Internet Ventures
45%-50%
40%-50%
35%-45%
NETLogistiK web-enabled
intermediary model will benefit
from low capital intensity and
high operational leverage.
Resulting in high operating
margins similar to that of other
virtual marketplaces,
*Projected operating margins for stable stage (where customer acquisition cost flattens)
** Based on analyst reports (Morgan Stanley Dean Witter,BancBoston)
*** Operating margins excluding software margins
Source: Analyst reports
29
Confidential - Emerald Internet Ventures
30
Confidential - Emerald Internet Ventures
CONTENT
Executive Summary
1. Industry overview
• Business concept
• Business development
• Competitive landscape
• Financials
Appendix
31
Confidential - Emerald Internet Ventures
• Truck transport dominates the movement of goods. Of all modes of transport, trucks captured over 80% of the
value generated by the sector.
• The market was deregulated in the early 90’s and remains highly fragmented. The capacity of the Mexican market
is composed of 330,000 trucks. Of these, around 40,000 are owner-operated trucks and 290,000 are distributed
among the close to 6,000 registered firms2.
• The top 50 carrier firms in Mexico amass a capacity of over 12,000 trucks, representing only 3.7% of the total.
These are firms with at least 120 units each and an average of 250 units for the group.
• Because of this fragmentation, most medium to large firms deal with many carriers; 15-30 for the largest firms3.
• Purchasing of local logistic and transportation is very inefficient, as shippers have to contact carriers individually,
usually by phone. Large logistics intermediaries (e.g. CH Robinson, Danzas) have limited penetration and have
focused on international movement of goods and not local distribution.
• NetLogistiK estimates that in the Mexican market alone it can attain a capacity of close to 17,500 trucks
participating in the exchange. This implies getting 10-15 of the top 50 carrier firms to participate and 300 medium
sized firms out of the universe of 6,000 that exist today.
* Revenue generated by the carrier per truck. Consistent with range obtained during interviews with carriers ($65,000-100,000)
** Assuming that referral fee is 10% of the insurance premium. Insurance premium ($140) = Value of cargo ($14,000)*Insurance rate (1%)
*** We assumed that after 3-4 years NETLogistiK is able to capture 200 of the 250 trips that a truck makes per year
Source: Economy Ministry, Interviews, NETLogistiK Team Analysis.
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Confidential - Emerald Internet Ventures
Capacity
Carrier Tractors Trucks Tractors+Trucks Trailers
1 Transportadora Nacional 530 270 800 530
2 Transportes Julian de Obregon 250 300 550 250
3 Auto Lineas Regiomontanas 450 30 480 550
4 Transportes Castores de Baja California 450 15 465 450
5 Transportes Cuahutemoc 450 0 450 550
6 MYM 0 450 450 0
7 Autotransportes de Carga Tres Guerras 400 20 420 400
8 Transportistas Unidos Mexicanos 348 69 417 420
9 Autolineas Mexicanas 156 200 356 240
Compania Fletera del Caribe 250 75 325 150
10
11 Fletes Mexico Chihuahua 300 20 320 600
•NetLogistiK will initially target larger carrier firms to
12 Express Tres Fronteras 285 6 291 545 provide the exchange with greater liquidity
13 Trans. Esp. Antonio de la Torre e Hijos 290 0 290 396
Express Sinaloa Division Ensenada 130 148 278 200
14
15 Transportes de Nuevo Laredo 275 0 275 549 •To acquire some of these initial “key” carriers
16 Bravo Logistics 267 0 267 500 NetLogistiK will:
17 Transportes COR 176 80 256 445
• Offer preferential treatment (e.g. sorting
18 Autolineas America 250 0 250 800
19 Express Anahuac 250 0 250 450 priority)
20 Nafta Express 250 0 250 300 •Offer stock options for early enrolment (as
Transportadora Hercel 250 0 250 200
21
Transportadora Egoba 240 0 240 320
UOL did)
22
23 Cia de Transportes de Mar de Cortes 205 8 213 0 •Offer option to purchase stock in first
24 Fletes Sotelo 200 12 212 1,200 round of financing
Transportes Aguila de Cd Juarez 175 36 211 120
25
26 Auto Express Perla 204 0 204 296
•Capture large shippers (e.g. Xerox, Coca-
27 Transportes Quintanilla 200 0 200 514 Cola, etc) as an incentive to bring large
28 Servicio de Transportes Jaguar 200 0 200 400 carriers
29 Comercial Intern de Transportes y Carga 200 0 200 200
30 Express Santa Fe 200 0 200 200 •Use non-cash incentives such as
31 Fletes Maya del Sureste 100 100 200 100 advertising
32 Jose Antonio de Luna Diaz de Leon 100 100 200 100
33 Transportes Sotres 80 120 200 100
34 Autotransportes de Carga Fremo 80 120 200 80 • Medium size-carrier firms are expected to be
35 Transervicios 186 10 196 450 attracted through participating shippers (i.e.
Central de Fletes Monterrey 192 0 192 345
36
37 Transportes Monterrey 130 60 190 80
shippers will promote the use of NetLogistiK with
38 Transportes Pitic 160 22 182 315 their traditional carrier firms).
39 Ryder Capital 150 20 170 300
40 Transportes Gonzalez 150 15 165 380
41 Integradora de Transportes Golfo Istmo 150 0 150 150
42 Transportes Unidos Tampiquenos 150 0 150 150
43 Fletes Pegaso 150 0 150 141
44 Transportes del Golfo y Noreste 133 0 133 178
45 Auto Express Mercurio 132 0 132 157
46 Servi Transporte Viga 130 0 130 175
47 Aguilas de Occidente 100 30 130 100
48 Transportes Mon-Ro 125 0 125 450
49 Transportes El Ola 125 0 125 170
50 Auto Fletes Regionales 120 0 120 150
34