Electronic commerce software, which it is claimed will cut the cost of international trade by more than half, has been announced by GE Information Services, backed by the World Trade Centers Association and major financial institutes.
By automating the paper-based processes between exporter, importer, financial institute and freight forwarder, which have existed for centuries, Tradecard brings credit-card style convenience to international trade.
It wraps up the separate processes of trade finance, pre-export finance, domestic and international inspection services and online insurance in one digital process under the control of the importer and exporter.
Tradecard will be operated by Full Service Trade System, a Bermuda-based company, and trading partners will connect to each other over GEIS' VAN.
Nations Bank, the third largest US bank, is the first financial institute to offer credit to importers and exporters via Tradecard. Royal Bank of Canada took part in early pilots and Bank of America and ABN Amro Bank in the Netherlands are reviewing the system. London-based insurer Sedgwick is developing marine cargo insurance instruments for Tradecard.
"We have the opportunity to eliminate over one half of the processing costs for every trade transaction - a huge opportunity for savings and productivity," said Harvey Seegers, CEO of GEIS.
The savings will be realised by all parties in the trading process, said Seegers, because they will be connected in a complete information loop - rather than in the one-to-one relationships which currently exist - using enhanced EDI, which integrates domestic and international EDI.
The Tradecard service begins with the importer applying for a line of credit from a Tradecard funding institution. Assuming credit is granted, the importer and exporter create a purchase order pro forma invoice (Popfi) which is matched against the shipping requirements. Once the terms of the electronic trade have been met, payment is released through the normal channels.
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