TradeCard Newsletter

Newsletter

TradeCard News - October 2004
Financial Supply Chain Automation - The Hosted way to Procure-To-Pay

Welcome to TradeCard's monthly e-mail newsletter - a summary of the latest news from TradeCard.

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Be sure to check out the third installment of "Principles of Global Trade." Each month's principle is based on our members' experiences.

We'd also love to hear from you. Send trade tips, suggested topics, or questions for our management team to sales@tradecard.com

PRINCIPLES OF GLOBAL TRADE: AUTOMATION OPTIMIZES CREDIT THROUGH THE SUPPLY CHAIN
NOTES FROM THE ROAD: ROBERT LIN, VP BUSINESS DEVELOPMENT, ASIA PACIFIC, DISCUSSES THE REAL-TIME- ENTERPRISE.
HEADLINES: RECENT ARTICLES THAT HAVE FEATURED TRADECARD
EVENTS: UPCOMING TRADESHOWS, CONFERENCES, WEB SEMINARS AND MORE

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PRINCIPLES OF GLOBAL TRADE * PRINCIPLES OF GLOBAL TRADE *

This is the third installment of our ten-part series.

PRINCIPLE 3: Automation optimizes credit through the supply chain

A good credit rating reduces the cost of trade finance. With web-based services, a large buyer can leverage its credit rating and assist smaller trade partners. Many schemes are available in traditional banking, under the umbrella terms Vendor Financing or Early Payment Programs, but only web-based schemes offer the financial institutions providing the credit as well as the buyer complete visibility into each transaction. Going even further, the internet allows buyers for the first time to fund the program themselves because the program administration consisting of collecting and matching documents, usually handled by financial institutions, is performed by new web-based procure-to-pay systems, taking all the manual paper-shuffling out of the process. Greater visibility lowers the risk of things going wrong and buyers feel more comfortable participating in an early payment program that benefits both parties.

When banks finance a single supplier, they have to take into account the risk of the buyer and the supplier. However, when supply chain partners collaborate, especially if they are members of an online trading community, they can easily work together to reduce the overall risk, and mutually benefit from the savings made. An early payment for the supplier can offset longer payment terms from the buyer and provide greater working capital flexibility. The buyer on the other hand benefits through late payment without any negative impact on vendor relationships and possible discounts.

Reduce your credit costs with Early Payment Programs
Leverage your good credit history to benefit your trade partners
Practice efficient real-time credit management on the Internet
Collaborate online to speed the purchase-order-to-payments cycle
Join with your trade partners to negotiate better trade finance terms

Find out how Burton Snowboards benefited from TradeCard's early payment program with Trak, one of their suppliers based in Canada. Click here for more info http://www.tradecard.com/news/pressreleases/burton.html

NOTES FROM THE ROAD * NOTES FROM THE ROAD * NOTES FROM THE ROAD *

In this month's column, Robert Lin, VP Business Development, Asia Pacific, discusses the real-time enterprise.

International trading companies need to move goods and payments rapidly, reliably and transparently. The financial institutions that handle credit and payment transactions need to achieve the same efficiency. The challenge is that both traders and banks primarily use paper-based systems - plus fax, e-mail and telephone - when it comes to the financial processes that connect them and their trading partners. The results? Insufficient communication, bloated working capital levels - and mistakes that can trip up the flow of goods.

It is not surprising, therefore, that the holy grail of forward-looking traders and their banks is the "Real-Time Enterprise (RTE)," in which the goal is to make all transactions online and almost instantaneous. The Real-Time Enterprise is a general business concept, and in the context of global trade, its practitioners constantly pursue faster, more transparent transactions.

Of course, it has always been profitable to speed up business operations, but there is a new sense of urgency because such results are now readily attainable. Real-time transactions have always needed electronic communications, but the private networks and EDI systems used in the past were expensive and limited to large companies or closed user groups. Now, the Internet has slashed costs, made possible strong security irrespective of network quality, and provided ubiquitous access to every company regardless of size.

Application of online technology to the physical movement of goods has already become a mature industry, and off- the-shelf technologies for bar coding, scheduling, and portals have transformed the logistics industry. Today, technology is available to introduce the concept of the real-time enterprise to the financial side of trade transactions (often called automation of the financial supply chain), as well as to the physical goods side. A growing number of buyers in the US and Europe have introduced web-technology over the past few years and their Asian suppliers are following suit. Real-time visibility into your transactions allows not only to address problems such as delays early on, but enables a new level of transparency on the financial side resulting in better cash and working capital management.

HEADLINES * HEADLINES * HEADLINES * HEADLINES * HEADLINES * HEADLINES

Recent TradeCard headlines with some article excerpts:

Looking to Cut Trade Finance Costs? - October 2004 - World Trade Magazine
The article talks about benefits that Internet trade finance has been bringing to exporters and importers, banishing paperwork, and trimming financing expenses: Holly Harrington, director of purchasing at U.S. toy maker International Playthings, in Parsippany, New Jersey, used to rely on letters of credit to handle all of the payments to the Asian supplier network that manufactures 90 percent of her company's products. But, four years ago, an Asian vendor introduced Harrington to TradeCard, one of the newer breed of Internet-based payments platforms that are now reshaping global trade finance. Adopting the platform has saved International Playthings a lot of hassle as it moved from a paperwork system to an electronic operation.

And, it replaced letters of credit entirely. "They used to cost us a bundle, we've probably saved $50, 000 a year in bank fees," Harrington says. Now, for each transaction, its vendors pay a small fee ($100), and it pays nothing. Click here to read the full article.
The Case for Trading Up - October 14, 1004 - Far Eastern Economic Review
This is a profile of TradeCard's Chairman and CEO Kurt Cavano in the magazine's regular column "CEO Call":

KURT CAVANO, CEO and chairman of TradeCard, doesn't just want his company to succeed, he wants to fundamentally "change the way people do international trade."...The firm can have a buyer in Texas working with a seller in Hong Kong, who manufactures in China and uses a freight-forwarder headquartered in Japan. Cavano is particularly pleased with the word of mouth his firm is generating. "You can always sell something to somebody if you try hard enough," he says, "but when your customer starts selling your service to other people for you...that's when you know you're doing something right."
TradeCard: More online transactions expected after quota lifting - Kurt Cavano discusses the state of the textile industry - Webcast on the Hong Kong Trade Development Council website. To watch this webcast video, please click here http://webcast.tdctrade.com/040924_03/e.htm
Letters of Credit Get Badly Needed Update - September 2004, Purchasing B2B Magazine
The article covers TradeCard and savings it delivers, particularly through integrated financial services. Read the full article at: http://www.bizlink.com/purchasingfiles/issue-4-6.html
Supplier Financing: Should You Lend a Hand? -- Frontline Solutions
In this column, Kurt Cavano describes how buyers and suppliers can work together to optimize financing in their supply chain: http://www.frontlinetoday.com/frontline/article/articleDetail.jsp?id=127904

Other TradeCard headlines included:

TradeCard CEO Kurt Cavano helps cut the paper out of international trade - October 1, 2004, Business Next (in Chinese)
One Third of TradeCard's Customers are in Taiwan - September 28, 2004, Economic Daily News (in Chinese)
Asia Pacific: China Report - October 2004, gtnews.com
Technology for Corporate Finance and Treasury in China - September 27, 2004, gtnews.com

EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS

In the coming months, TradeCard will participate in:

HONG KONG, November 3-4. 4th Annual Supply Chain Management CEO Summit organized by the Hong Kong Article Number Association. TradeCard will moderate a summit session, as well as participate in the exhibition.
SCOTTSDALE, ARIZONA, November 15-17. Kurt Cavano will speak at the Vendor Compliance Federation.
SHANGHAI, December 6-7. Ruth Kan from TAL Apparel and Kurt Cavano will jointly give a presentation on trade platforms in Asia at the "4th Annual Trade Finance in Asia" conference organized by Euromoney Seminars.

Be sure to check our web site for updates on where we'll be next.

This newsletter can also be viewed at the Hong Kong General Chamber of Commerce website at www.chamber.org.hk/hknewsletters/