Competitive Landscape

Although the TradeBeam's solution has been (and will be) indisputably competitive, especially in light of Vastera's logistics product gaps, the GTM market is characterized by early adopters and is rapidly evolving. Even a company of TradeBeam's current stature—one with several years of existence, less than $20 million (estimated) in annual revenues, an immaculate financial position, and a slew of marquee customers—might not be able to maintain its competitive position against current and potential competitors in the long term, especially against international brokers, freight forwarders, logistics companies, and other companies with greater financial resources, name recognition, and other resources. Competition might also come from in-house development efforts, consulting companies, other software companies, and third-party development efforts. The market is competitive, rapidly evolving, and highly fragmented, and one should only expect the intensity of competition to increase in the future.

Just as banks, such as JP Morgan Chase, are changing their roles, so will the roles of third-party logistics (3PL) providers, which are focused predominantly on the management of the shipment bookings through proof of delivery process and logistics costs management. As user companies continue to embrace the value of broader GTM solutions, logistics providers will be looked upon to provide leadership and to add more value to the entire order life cycle, including purchase order management, total landed cost modeling, insurance and claims, import/export compliance, security regulations, and more seamlessly integrate invoice reconciliation and trade financing systems.

Like other parties in global trade, 3PL providers must still mitigate their risks of providing correct and timely documentation relative to documents for transportation, customs, and settlement, such as LC. They will also be liable for trade compliance issues such as denied parties and anti-boycott and will need a corporate wide solution to protect them from liability. TradeBeam will likely prefer to partner with banks, 3PL providers, or even some logistics management vendors like G-Log or Xporta, given the currently complementary nature of their offerings. These entities, however, might likely decide to grab a bigger slice of the GTM pie through acquisitions such as that by JP Morgan Chase of Vastera or through in-house developments and competency building.

Additionally, the number of stand-alone GTM vendors is quickly dwindling, given the fairly recent mergers of SSA Global and Arzoon (see SSA Global Forms a Strategic Unit with an Extended-ERP Savvy); TradeBeam and Open Harbor, Qiva, etc.; and Kewill and TradePoint (which had previously acquired ClearCross). One should expect GTM software technology and managed services to continue to merge. These acquisitions may also indicate that further, accelerated restructuring in the logistics services market is inevitable. Currently, there is a plethora of point solution providers that specialize in narrow areas, from land cost calculation, visibility, collaboration, export compliance, trading document generation, hazardous material handling; they may move to more complete transportation management capabilities.

There are, however, a number of remaining players in several niches, just enough to muddle the message and nibble at the potential revenues of full-fledged GTM players. For example, we could talk about the remaining ITL players like NextLinx, Precision Software, Intermart, Nistevo, MercuryGate, Xporta, Tarrific.com, OCR Services, Impporters Software Services, MSR Customs Corp., Questaweb, GT Nexus, and LOG-NET, global settlement players like Bolero.net, TradeCard and S1, and a number of other vendors that, arguably, are more specialized in SCEM, visibility, and shipment tracking like Viewlocity, Descartes Systems, Management Dynamics (through recently acquired BridgePoint), Timogen, etc. But, none of these vendors handles all the requirements of automating global e-business. Furthermore, some of these vendors have apparently already merged with or acquired other companies to provide more complete offerings.