InformationWeek

March 27, 2000

Online Marketplaces:
Tradiant Takes Different Route
Services such as newsletters and chat rooms differentiate shipping industry exchange

By Matthew G. Nelson

Illustration by Dennis Harms sign on the the conference room door reads: "Loose lips sink ships!" It's an appropriate warning for startup Tradiant Inc. as it develops a battle plan to build an online marketplace to bring an ancient business--the transportation of goods over water--into the 21st century.

The company is building an electronic marketplace to connect the shippers of goods with the ocean-going carriers that transport those products to foreign markets. Tradiant wants to connect shippers, especially small and midsize companies, with cargo carriers via the Internet.

The origins of Tradiant show that ideas for marketplaces can pop up in the most unlikely places. Co-founders Aaron Sasson and John Urban came up with the idea at a PTA meeting at their children's school. "We were sitting in the back," says Sasson. "I'm coming from technology, and he's coming from shipping, and the light just kind of came on."

Tradiant chose a location that should work in its favor. It's based in Alameda, Calif., an island just off the shore of Oakland in the San Francisco Bay that was once home to a U.S. Navy base. That puts Tradiant next door to one of the busiest shipping ports in the country, and only a few miles from the heart of the Silicon Valley. That should help bring on board talent from both industries.

What attracts attention from potential customers are the executives who came over from the shipping industry itself. President and CEO Urban has never spearheaded an Internet startup, but he has 20 years' experience working for the fifth-largest ocean transportation company, American President Lines, which owns 76 cargo ships and 250,000 containers worldwide. He's using his contacts to find partners and customers.

"I spend a lot of the day working with our people to drive carrier relationships," Urban says. And carriers joining the Tradiant system are attracting shippers such as Vinay Upasani, president of Intelcons Inc., a trading company that ships 50 to 70 containers a month internationally. "That's very important. Somebody who has no exposure to the industry wouldn't have been able to get so many shipping companies interested in this kind of arrangement," Upasani says. "It's their contacts and their arrangements that make them interesting. That's what's working."

Launching just this week, the site is already growing beyond expectations. Thirteen carriers and more than 200 shippers have signed on for the service.

To keep things on track, the Tradiant staff gathers in the conference room at 7:30 each morning to strategize, work on site design, discuss hiring, and chart the progress they're making in the crucial effort to recruit partners to trade across their network.

The Tradiant site is designed to be a gathering point for shippers and carriers to haggle over pricing, destination, and the quantity of goods to be transported, while streamlining the process for carriers to make the most use of the space they have available. "The cargo carrier business is hundreds of years old. The immediate view of this within the industry is that this is a threat," says Vijay Sundaram, VP of marketing at Tradiant. "We had to find a way that we could create value in the marketplace."

The way Tradiant intends to create value is charted out on the butcher paper that covers the conference room walls. It lists carriers such as Farell Lines, K-Line, and Maersk, and the routes they take around the world. While large shippers pay a staff to keep track of all these carriers, smaller companies can't afford to. That provides Tradiant with its opportunity: creating partnerships with carriers, gathering information about them and their services, and presenting it to potential customers via an online marketplace.

"Tradiant is one extension or arm of our own organization that can do the investigation of the marketplace for our needs," says Upasani. "So this is an exciting opportunity for small and medium-sized companies like us." His international trading company, in Trabuco Canyon, Calif., ships mostly high-quality steels to Bangladesh, China, India, the Philippines, and Vietnam. "We're really not a very large company," he says. "We don't have an independent shipping department in our company that can focus on all the changes that happen in shipping all the time."

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