ENABLING a secure and means of electronic payment is probably the most important challenge facing shipping's aspirations.
In most cases, even when sites are transactional, users must come off-line to effect payment and also sometimes earlier in the process. Questions of security and trust between unknown trading parties are similarly important in ensuring that the internet delivers the means to conduct trade swiftly and efficiently. The ability to achieve secure transactions and payment, particularly in liner shipping applications, has until now been held back by the need to develop a bill of lading that would function electronically, without the need for a paper copy document of title. A method of producing a hybrid between the traditional bill of lading and the waybills used by courier companies had been investigated for some years by John Richardson, during his work on electronic document applications for P&O Nedlloyd. `Everybody was asking the wrong question when they talked about EDI,' recalls Mr Richardson.
`Just exchanging documents electronically wouldn't provide the security that shippers needed. What the industry needed was a waybill with specific clauses that would satisfy insurers and let banks avoid indemnities.' In time, Mr Richardson's endeavours came to the of Jacob Katsman who first founded CCEWeb in 1996 to create an internet-based commodity exchange. Over the next three years, his company evolved into a b2b network connecting all parties in the trade and transport chain.
Reading the P&O Nedlloyd Merchants Guide written by Mr Richardson, he realised that his idea could provide the last piece of the jigsaw that CCEWeb needed to a complete payment and trade system. The result of combining complex, legally-binding electronic documents with secure payment is @GlobalTrade, an open payment and trade management system for completing and financing trade deals. @GlobalTrade supports trade processing between buyers and sellers who are unknown to each other, including financial institutions, carriers, forwarders and surveyors in the same web space. Financial institutions can offer their trade clients a Visa-branded payment card that combines a trusted brand with a reliable letter of credit. Users can thus employ straight-through processing from application for letter of credit to credit advice, document issuance, compliance checks, transfer and assignment of proceeds, payment and customs clearance via the internet. @GlobalTrades alliance partners include Indentrus, which provides electronic identity verification, and Authentica, which enables users to retain ownership and control of electronic documents. The buyer can thus verify electronically that merchandise has been shipped on time and the quantities and agreed. The need to pay cash advances and delays caused by discrepancies in paper-based processing are eliminated. `We've really based the system on industry standards, so this is evolution, not revolution,' says Mr Katsman.
`Users can manage many transactions, shippers and exporters get paid faster, courier charges are eliminated and letters of credit are fast-tracked so it's a full offering.' Officially launched in September this year, @GlobalTrade has industry also has powerful backing in P&O Nedlloyd, APL, PBB Logistics and cargo surveyor SGS, who have signed up to a pilot that will run between March 2001 and early autumn. CCEWeb is canvassing new partners for the project and hopes to add another big carrier name to the trial before the end of the year. Despite the leverage of @GlobalTrade's primary partners, Mr Katsman points out that the system should make it much easier for small and medium-sized companies to deal with each other internationally. `The system is based on the transport chain,' adds Mr Katsman. `So it was important that we trial the system globally, using credit card systems people were familiar with.' Browser-based but providing integration through the use of XML-enabled Portable Document Format files, the system requires no investment in proprietary systems, a particular advantage to financial institutions. `We felt it was important that there was no need for integration with legacy systems,' says Mr Katsman.
`We have made the investment, so for users, the costs to entry are marginal. The system supports e-commerce, paper or a blend of both, so users can do business even with partners that aren't on the internet.