Digilogistics.com, which is a neutral Web-based exchange for logistics and transportation service providers and users via the Internet, gets its revenue through charging a transaction fee.

In addition to the trading service, the company enables its 6,000-odd customers to manage the logistics process.

'Our transaction in the last three months amounted to US$2 million (HK$15.56 million),' Mr Chan said, adding that more than 500 transactions had been carried out so far.

Companies can buy and sell cargo space with multi-modal transportation. Later, Digilogistics will enable companies to carry out other logistics service and related services, such as warehousing management, fleet management and freight settlement.

As transportation of goods from manufacturer to end-user involves many complex proce dures, Digilogistics offers participants in the logistics industry a secure and comprehensive solution.

Participants like shippers, forwarders, trucking companies, shipping lines and airlines can carry out container booking, price negotiations and tracking of all procedures and goods through Digilogistics' Web site.

Asked about the launch of the company's phase two project, Mr Chan admitted it was three months behind schedule as the company wanted to incorporate new functions into the system.

He added that Digilogistics, which had formed strategic alliances with China Total Logistics Networks (Shenzhen) and other e-commerce firms such as epulppaper.com and 1stop-toys.com, would incorporate its partners' technology and global logistics network into its phase two project.

In addition, Digilogistics has formed a strategic alliance with Nasdaq-listed Descartes, a leading global e-logistics software provider, to provide logistics software technology.

Phase two is scheduled to be launched next month, with newer functions and features.

Mr Chan said Digilogistics, which had signed a memorandum of understanding with more than 20 firms, was studying their requirements and would help them build logistics platforms.

Asked about the response of small and medium-sized enterprises to its services, he said they were not too excited but the bigger players, including multinational companies were interested.

He added it was a normal trend for the big players to adopt changes to the industry first before the small and medium-sized players followed suit.

'The Internet penetration was not high in the business-to-business (B2B) in Hong Kong,' Mr Chan said, adding that logistics was still a luxury for small companies.

Only big companies were taking advantage of the Internet and others would follow suit in one or two years' time, he added.

Mr Chan said the logistics services industry was growing fast in the mainland, unlike in Hong Kong where it is pro-actively promoted by the government.

He said one of the company's service providers, China Total Logistics Express, had recently established a joint venture with Shenzhen International Airport to provide logistics services because investors were willing to invest.

'It is all about improving the information infrastructure,' he said.

Mr Chan noted the trend was not only happening in Shenzhen, but also in Shanghai, Beijing and Tianjin.

And as more organisations ventured into logistics, Digilogistics would benefit from the increased business, he said.

He added that Hong Kong would expand together with the Chinese market.