Cargo shippers sail to the Net
The group, which includes APL, a unit of Neptune Orient Lines of Singapore, and eight other international shipping companies, is investing in Tradiant Inc., a closely held Alameda, Calif., company. The companies declined to specify the size of their investments but said the new service will enable customers to book cargo, track and trace shipments and speed up documentation online.
Tradiant was founded a couple of years ago by entrepreneur Aaron Sasson, the company's chairman and chief executive. Vijay Sundaram, Tradiant's vice president for marketing, said the venture hopes to standardize communications between carriers and their customers and reduce cargo transaction costs 60%. Tentatively called Global Transportation Network, the Internet service is expected to be launched during early or mid-2001.
The venture follows the pattern set by other transport industries, including railroads and trucking, that have set up their own Internet services rather than leave them up to third-party start-ups. Some of the middlemen have set up auctions to drive down freight rates.
"The insiders are asserting themselves. They're saying, 'stay out,' " said Theodore Prince, a principal of Transgistics LLC, a consulting and investment partnership based in Richmond, Va.
Hans Hickler, an APL senior vice president, said the container-shipping industry is better-positioned to provide services than intermediaries, especially since the business is "still frighteningly manual and paper intensive."
John Gurrad, a vice president of the U.S. unit of Mitsui O.S.K. Lines of Tokyo, another member of the group, said the industry's new venture has the "potential to eliminate or reduce the need for intermediaries."
Plans for the new Internet venture follow by a few weeks an announcement by Maersk Sealand, a unit of A.P. Moller Group of Copenhagen, and four other container-shipping companies that they would join forces to create an Internet service with the working name Inttra.
For their part, some third-party start-ups say there is a place for what they do even with the industry efforts. Eyal Goldwerger, CEO of GoCargo.com, a container-shipping Internet auction based in New York, said, "We're allowing customers to choose the best vendor with the best prices and best service. It's a market like any other."
In addition to APL and Mitsui, venture participants are CP Ships, a unit of Canadian Pacific Ltd., Calgary, Alberta; Hanjin Shipping Co., Seoul, Korea; Hyundai Merchant Marine Co., Seoul; "K" Line, a unit of Kawasaki Kisen Kaisha Ltd., Tokyo; DSR Senator Lines, Bremen, Germany; Zim Israel Navigation Co., Haifa, Israel; and Yangming Marine Transport Co., Keelung, Taiwan.