IBM, Vastera team for trade management

IBM Corp.'s Public Sector unit recently forged an alliance with Vastera Inc., a developer of trade logistics software, to help streamline the flow of goods and information across international borders.

To effectively control and move goods, real-time collaboration among a host of players — forwarders, carriers, brokers, financial institutions and government agencies — must be improved, company officials said.

Vastera provides this real-time capability through a software suite called TradeSphere, which automates processes associated with moving goods, including ensuring compliance with country-specific trade regulations, generating international shipping documents, collaborating with trading partners, performing global logistics functions and supporting the financial settlement processes.

The detection and verification module of TradeSphere ensures that goods are shipped to legitimate businesses by compiling and cross-referencing lists of individuals and companies that may be fronts for criminal organizations or terrorists. The Customs Service uses that technology, and the Commerce Department relies on other Vastera products, according to the company.

IBM will capitalize on the relationships Vastera has with federal agencies and regulatory authorities to expand the market for its platforms and database products, according to Jerry McNerney, senior research analyst of the supply chain service at AMR Research Inc., a consulting firm based in Boston.

The government is requiring "better compliance and document management over goods being moved across borders," and this alliance will give IBM insight into global trade management, McNerney said.

The two companies will jointly market Vastera's TradeSphere software to work with IBM's eServer platforms and WebSphere e-business software. The two companies will also make TradeSphere compatible with IBM's DB2 database. IBM plans to provide consulting, customization and integration services for joint customers.

WebSphere will make Vastera's solutions compatible with back-office systems such as SAP AG's, said Steve Zell, supply chain solutions alliance manager at IBM.

Vastera's TradeSphere addresses homeland security needs by focusing on five areas, said Greg Stock, the company's vice president of marketing and alliances.

The first is product classification, which ensures that all shipped items are properly classified. "Everything is related to getting the right classification code," Stock said. "If it is wrong, a company can wind up paying the wrong tariffs."

Detection and verification helps financial institutions check lists of known criminals and terrorists. License management ensures that individuals and companies are properly licensed to ship goods. Document management software ensures that goods have the correct documentation for border clearance. And visibility and control software tracks shipment status and location at all times, Stock said.

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