At the end of 2004, TradeBeam Holdings, Inc., a leading provider of global trade management (GTM) solutions that streamline global trading processes for enterprises and their partners, announced that it has acquired the assets of Open Harbor, a leading provider of international trade logistics (ITL) solutions. TradeBeam solutions include import and export compliance and global trade finance solutions like open account and letter of credit (LC) management, but also inventory management, shipment tracking, and supply chain electronic management (SCEM). The vendor has over 3,000 customers with users in over 100 countries worldwide. Terms of the deal were not disclosed.
Founded in 1999, Open Harbor possessed deep expertise in trade compliance, including a comprehensive centralized repository of global trade content (harmonization engine) containing millions of trade rules from more than sixty countries, in a one-to-one relationship manner. The company was considered a leading player in the landed cost management arena. Customers leveraged its technology and experience to gain crucial accurate pricing for international orders based on an aggregate of product cost, shipping costs, and fees charged by exporting and importing countries. However, the failure of Open Harbor, however, was not caused by lack of market demand and opportunities, but unfortunately by poor management.
Almost any business process, particularly GTM practices need to have access to trade experts that can interpret and apply trade regulations to improve operational and financial performance and Open Harbor was no exception. TradeBeam, on the other had focused more on the application side of trade management, such as creating shipment tracking, insurance, event management, and other applications central to the actual movement of goods.
Nowadays even small shippers can leverage import/export software through third parties. Specialized software and managed service providers working behind the scenes make it possible for carriers and freight forwarders to offer selected services to their customers, such as landed-cost calculators, product classification, and document preparation, often on a fee-per-transaction basis. For example, international shipping and freight companies DHL and FedEx partnered with Open Harbor and NextLinx respectively. NextLinx, database carries nearly 20,000 HTS product classifications and more than 40 landed cost components for 100 countries, accounting for about 95 percent of the entire world's trade.
TradeBeam believes that Open Harbor brings a logical extension to its current offering, because customers will now have enhanced access to the latest global trade content of more than sixty countries, as well as landed cost management functions. The move continues the strategic expansion of TradeBeam's product footprint, which covers the entire life cycle of global trade across order, logistics, and financial settlement activities—all to improve operating efficiencies and working capital. This should also provide a complimentary vertical focus, since Open Harbor had developed solutions and attracted clients in the hi-tech and automotive markets.
As seen by this move by TradeBeam, the GTM space is consolidating and point solution providers are disappearing. The leaders seem understand that to truly improve global trade, one must be able to manage both the physical and financial supply chain. Across the entire trade transaction export/import compliance, document management, SCEM, security and contract issues must be managed along side purchase order processing, LC management, pre- and post-shipment financing, reconciliation, invoice presentment, foreign exchange, and insurance management.
Product integration between TradeBeam and Open Harbor should be complete by the second half of 2005, with TradeBeam pledging to maintain uninterrupted service and support to a key group of Open Harbor clients during immediate transition phase and post contract execution. TradeBeam has also been communicating with Open Harbor's customers to understand their specific circumstances, the scope of their projects, and to jointly agree on terms to work together to ensure business goals are aligned for both companies.
Founded in 1999, Open Harbor possessed deep expertise in trade compliance, including a comprehensive centralized repository of global trade content (harmonization engine) containing millions of trade rules from more than sixty countries, in a one-to-one relationship manner. The company was considered a leading player in the landed cost management arena. Customers leveraged its technology and experience to gain crucial accurate pricing for international orders based on an aggregate of product cost, shipping costs, and fees charged by exporting and importing countries. However, the failure of Open Harbor, however, was not caused by lack of market demand and opportunities, but unfortunately by poor management.
Almost any business process, particularly GTM practices need to have access to trade experts that can interpret and apply trade regulations to improve operational and financial performance and Open Harbor was no exception. TradeBeam, on the other had focused more on the application side of trade management, such as creating shipment tracking, insurance, event management, and other applications central to the actual movement of goods.
Nowadays even small shippers can leverage import/export software through third parties. Specialized software and managed service providers working behind the scenes make it possible for carriers and freight forwarders to offer selected services to their customers, such as landed-cost calculators, product classification, and document preparation, often on a fee-per-transaction basis. For example, international shipping and freight companies DHL and FedEx partnered with Open Harbor and NextLinx respectively. NextLinx, database carries nearly 20,000 HTS product classifications and more than 40 landed cost components for 100 countries, accounting for about 95 percent of the entire world's trade.
TradeBeam believes that Open Harbor brings a logical extension to its current offering, because customers will now have enhanced access to the latest global trade content of more than sixty countries, as well as landed cost management functions. The move continues the strategic expansion of TradeBeam's product footprint, which covers the entire life cycle of global trade across order, logistics, and financial settlement activities—all to improve operating efficiencies and working capital. This should also provide a complimentary vertical focus, since Open Harbor had developed solutions and attracted clients in the hi-tech and automotive markets.
As seen by this move by TradeBeam, the GTM space is consolidating and point solution providers are disappearing. The leaders seem understand that to truly improve global trade, one must be able to manage both the physical and financial supply chain. Across the entire trade transaction export/import compliance, document management, SCEM, security and contract issues must be managed along side purchase order processing, LC management, pre- and post-shipment financing, reconciliation, invoice presentment, foreign exchange, and insurance management.
Product integration between TradeBeam and Open Harbor should be complete by the second half of 2005, with TradeBeam pledging to maintain uninterrupted service and support to a key group of Open Harbor clients during immediate transition phase and post contract execution. TradeBeam has also been communicating with Open Harbor's customers to understand their specific circumstances, the scope of their projects, and to jointly agree on terms to work together to ensure business goals are aligned for both companies.
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