TradeCard, an electronic system that can complete an international transaction in a matter of minutes, is spreading its tentacles throughout the world trade community, adding a major freight forwarder here and a global bank there.
The World Trade Centers Association's TradeCard, introduced earlier this year, is being used by a growing number of international traders who see advantages over the current paper-based system.TradeCard recently formed alliances with ABN-AMRO Bank of the Netherlands, which is the largest foreign bank in the United States, and BAX Global, one of the world's largest freight forwarders.
A patented, Windows-based software application, TradeCard allows company officials to buy and sell directly from their desktop computer over a secure electronic network provided by GE Information Services.
''Our goal is no less than to automate and improve the entire international trading process,'' said Harvey Seegers, president and chief executive of GEIS.
''We have an opportunity to eliminate about one-half of the processing costs for every trade transaction - a huge opportunity for savings and productivity,'' he said.
''As a full-service trade bank, we feel that it is important to offer TradeCard as one of our international capabilities,'' said Walter ''Buddy'' Baker, group vice president of ABN-AMRO's International Trade Advisory.
Companies can import goods from more than 48 countries using the TradeCard software.
''The TradeCard service results in faster, cheaper and easier trade transactions,'' said Guy Tozzoli, president of the World Trade Centers Association.
''This is the world's first credit card for trading, although it is not a card but a revolving line of credit for paperless trade,'' Mr. Tozzoli said.
Current methods of international trade are costly and paper-intensive, with up to 70 percent of documents being discrepant, Mr. Tozzoli said.
TradeCard's patented electronic ''compliance engine'' guarantees zero discrepancies, and an 80 percent reduction in paperwork, he said.
TradeCard is owned and operated by Full Service Trade System Ltd., an affiliate of the World Trade Centers Association, the world's largest international trading association.
Based at the World Trade Center in New York, the association was founded in 1970 and comprises more than 300 world trade centers in 97 countries servicing more than 500,000 international companies.
GEIS, Rockville, Md., is one of 12 key businesses of General Electric Co. It manages the world's largest electronic trading community of more than 40,000 trading partners.
BAX Global will link into TradeCard as a participating freight forwarder.
''TradeCard is a perfect fit with BAX Global. It brings our customers' international purchasing and trade finance up to the same level of automation that they have reached with us in transportation and logistics,'' said Tom McFarland, director of international services at BAX Global.
''Until now, very sophisticated systems have been in place for domestic purchasing and logistics, while international trade has been archaic,'' he said.
Conventional trade requires the freight forwarder to handle a large quantity of documents for each transaction. Creating, sending and storing these documents is subject to human error and delays and discrepancies, Mr. McFarland said.
The TradeCard software system is a high-tech alternative to traditional paper-based trade finance methods such as the letter of credit or open account.
Importers and exporters can create and send their trade documents electronically in minutes directly from their desktop computers.
The freight forwarder then receives the packing list and shipping instructions electronically and can complete the on-line documentation in moments.
Amendments may be made at no extra cost and the electronic communications between trading parties can ensure timely resolution of any discrepancies. BAX Global is a transportation and logistics management company with more than 500 offices in 119 countries and is a subsidiary of Pittston Co.
IT'S ALL IN THE CARD
Freight forwarders and importers interested in trying the TradeCard service should call (800) 905-TRADE.
The system ties together all of the major participants in an international transaction, but leaves control in the hands of the importer and the exporter.
The electronic system allows creditworthy importers and exporters to benefit from trade financing, nearly paperless trade, a faster business cycle, and services such as EDI messaging, inspection services, insurance and supply-chain management.
''TradeCard gives a company complete inventory control for international transactions and reaches into every part of the company,'' Mr. Tozzoli said.
Mr. Tozzoli said he conceived the system for small and medium-sized companies, but found that it also is useful for large companies seeking to cut costs and reduce transaction times.
Using the TradeCard system, the importer and exporter complete the trade directly from their desktop computers. They create an electronic document called the purchase order/pro forma invoice, or Popfi, which the exporter may use to apply for pre-export financing.
The importer receives and authorizes the Popfi via TradeCard's private business network. The funding institution (a participating bank) authorizes the credit, but actual payments are made outside of the system.
Once both parties to the trade authorize the Popfi and the funder authorizes credit, payment is irrevocable.
The exporter then creates a packing list and sends it to the freight forwarder, who is also tied into the same system. The exporter sends instructions for transport, insurance and inspection at the same time.
Users are also able to request quotes for insurance through Sedgwick Insurance Ltd., a major insurance broker based in London.
DELIVERING THE GOODS
Finally, the exporter delivers the goods to the forwarder, who prepares the commercial invoice, waybill and other required documentation.
The system is highly reliable and secure, Mr. Tozzoli said.
''There is a triple level of data security, including passwords, digital signature authentication and encryption,'' he said.