WebModal ,
 Please read the following message from Dan Reck regarding WebModal.  Thank 
you.

----- Forwarded by Cathy Phillips/HOU/ECT on 02/14/2001 07:25 AM -----

	Daniel Reck
	02/13/2001 01:48 PM
		 
		 To: Cathy Phillips/HOU/ECT@ECT
		 cc: 
		 Subject: WebModal



At Monday's EGM meeting, Mike McConnell asked me to describe the WebModal 
acquisition EGM made last week.  Following is a brief description of the 
freight capacity market and what WebModal gets us:

Market

The US market for logistics is $600bn annually.  We are pursuing the largest 
homogenous segment which is long-haul truckload and intermodal.  That market 
is $50-$100bn annually, depending on who you ask and whether you include 
dedicated fleets.

The interesting thing about these markets is that they are extremely 
fragmented and massively intermediated.  There are over 100,000 trucking 
companies (carriers) in the US and thousands of independent brokers (brokers 
in this market act as credit principals).  10-20% of all loads are conducted 
in the spot market (brokered) and the rest are done under 1-3 year contracts 
that are generally non-firm, but define the relationship between each shipper 
and their chosen carriers or intermediaries.

On the rail side, the US railroads act as wholesalers, selling their capacity 
to Intermodal Marketing Companies (IMCs).  The IMCs then retail or broker out 
that capacity to shippers.  The difficult part of ground intermodal is that 
the rail haul makes up only the long-haul component.   The trip from the 
origin warehouse to the origin rail yard and then the delivery from the 
destination rail yard to the destination warehouse has to be done by truck.  
This first and last mile transportation is called "drayage".  

WebModal

WebModal developed a system to price and schedule intermodal moves so they 
look identical to truck.  They have a database with prices and schedules from 
all the RRs and 48 drayage companies that gives them complete US coverage.  A 
buyer can type in their scheduling and equipment requirements and receive 
instantaneous quotes for zipcode to zipcode service.

Because of the inherently different cost and performance structures of rail 
and truck, the pricing differences between the two modes of transportation is 
significant.  For any move greater than 500 miles, intermodal is generally 
20-30% less expensive than a single driver truck move.  The substitutability 
of intermodal and truckload should allow us to trade the spread in price.

The WebModal acquisition gets us a team with tremendous industry expertise 
and a good head start as we enter this market.  The next move will be to 
build a truck intermediation capability.  

I encourage you to meet Chris Kravas the CEO of WebModal.  He will be 
spending all of his time in Houston when he is not on the road.

Please give me a call if you have any questions.

Thanks,

Dan Reck
mark.frevert@enron.com, mike.mcconnell@enron.com, jeffrey.shankman@enron.com, 