Buy or borrow? (page 3)

-- Logistics Management, 3/1/2005

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Need to integrate import data with internal systems.Large importers often need to capture data at the line-item level and feed it back into ERP or

financial systems, says Duncan Jackson, vice president, product development and marketing for TradeBeam, a GTM services provider. Online GTM services aimed at small and mid-sized shippers aren't designed for those types of applications.

Importance of risk management. Importers face significant risks if they fail to comply with federal laws, regulations, and voluntary programs that focus on having adequate processes in place for ensuring compliance. (The Sarbanes-Oxley Act and C-TPAT, the Customs-Trade Partnership Against Terrorism, are two examples.) Purchased software that tracks and analyzes each shipment from purchase order through payment may be more appropriate for some companies than third-party offerings that focus on transportation, says Jackson.

The choice ultimately depends on a company's vision of the role international trade plays in its corporate strategy: Whether it's seen as a series of discreet activities or a complex web of interconnected transactions merging the physical and financial supply chains, says Jackson. It's up to the importer to decide which type of software and services best supports its own vision.

What About DHL?

DHL, which is investing heavily to compete with UPS and FedEx in North America, had been offering trade automation services through a partnership with software provider Open Harbor. But a visit to DHL's website turns up a message informing customers that the company's Trade Automation Service is "undergoing further improvements."

"DHL is currently exploring further developments to improve upon our existing international trade content and suite of services," said Public Relations Manager Robert Mintz in an e-mail. That effort includes interviewing customers to better understand their needs and respond accordingly, he added.

Industry insiders say the service was taken offline due to the collapse of Open Harbor, whose assets were acquired by rival TradeBeam Holdings in December. Open Harbor had been financially shaky for some time despite infusions of cash. Despite those travails, Open Harbor had developed "extremely rich" regulatory content covering trade between 60 countries representing more than 85 percent of world trade, says Duncan Jackson, TradeBeam's vice president, product development and marketing.

Executives at DHL and TradeBeam declined to comment on their relationship or on the implications of Open Harbor's demise. But according to one software company executive, who asked not to be named, it's widely believed that DHL is now working on "something huge" in trade automation.

For Rent: Import/Export Software

Although the FedEx and UPS suites of GTM products are widely used, they aren't the only options for shippers that want cost-effective, third-party access to such services. A number of carriers, freight forwarders, and third-party logistics companies are offering some type of global trade management (GTM) software to their customers. Some of those products have been developed in-house, and others are offered in collaboration with GTM software vendors. Providers often use GTM software to manage activities they perform on behalf of customers, and some offer customers access to all or part of that information. Just a few examples:

Expeditors International of Washington, for example, offers its Tradeflow system directly to its customers. Tradeflow includes a full range of GTM capabilities, plus other supply chain visibility tools and a transportation management system.

Hellmann Worldwide Logistics will create a customized classification database that includes products and part numbers, tariff numbers, and a rationale for assigning that classification.

Cendian Chemical Logistics, DHL Danzas Air & Ocean, EGL Global Logistics, International Trade Services Corp., Maersk Logistics, FedEx Trade Networks, and Vector SCM collaborate with NextLinx to provide trade management solutions for their clients.

TradeBeam counts UTi, GlobalLink Logistics, JAS Forwarding Worldwide, and Pilot Air Freight among its clients.

Some forwarders and 3PLs work with Vastera to jointly provide compliance services for mutual clients and exchange data, but they don't "resell" Vastera's products.