INTRODUCTION
GHELS represents an optimum opportunity for e-logistics technology providers to maximize their solution's value proposition to existing customers. This synergistic use of GHELS will enhance their customers' return on technology investment by increasing their global shelf-to-shelf logistics efficiency, as originally intended at no direct additional cost.
In order to properly understand the incomparable attributes of the World Logistics Council in the market place, we need to present in brief WLC's distinguishing elements.
WLC's unique elements can be divided into the following categories:
- Target Market
- Business Model
- GHELS Technology
- GHELS Global Network Strategy
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1. TARGET MARKET
Today the top 100 e-logistics companies have targeted specific players in the industry, who can afford the high costs involved, resulting in robust, yet highly localized, vertical in-house systems. These vertical systems are important, but they have not been built based on providing efficiency and security as required by the interdependent global economy. When employing a vertical system mistakenly attempting to enhance the efficiency and security of a horizontal process, the result will be the current highly fragmented Global Logistics Industry (GLI).
The World Logistics Council's target market is the GLI. The reason behind the creation of the World Logistics Council was to provide a comprehensive solution achieving efficient and secure global logistics while addressing the needs of all the GLI participants involved. Therefore we have identified the common denominator of the GLI, the shipment. We then focused our efforts on this common denominator, and have accommodated all shipment participants involved. Because the shipment crosses multiple organizations small and large including worldwide governments, GHELS will standardize and simplify the shipment process, thus maximizing efficiency and security of the GLI.
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2. BUSINESS MODEL
According to a study by Inbound Logistics / April 2006, the top 100 e-logistics information technology providers have developed solutions which are based on a vertical approach, and they charge either per employee user (ranging from $50,000 - $500,000, based on a transactional fee), or a periodic subscription. Selling software or periodic subscriptions is a business model based on a vertical orientation and is not global. Practically speaking, it is not feasible to charge each individual entity involved in the shipping process. Such transactional-based systems are inherently inefficient since an army of personnel would be needed to handle the billing and collections for this $4 trillion industry.
A unique business model is imperative to expedite GHELS adoption resulting in rapid global deployment. While the World Logistics Council's business plan is all-encompassing, we recognize that simple economics will always be an integral part of any lasting solution. As such, the GHELS generates economic benefits in the range of 10-20% of operating costs across the flow of cargo shipments. We will charge the carriers 2% on the freight rate and the rest of the GLI participants will use the GHELS system free of charge.
Although the intention is not to monopolize this vast industry, any solution must nevertheless be responsive across international markets and economies. After all, what can be affordable in a specific market place might not be affordable for the rest of the world. Additionally, if a lane participant did not pay his bill he would lose access to the system, resulting in a gap in the efficiency and security of the shipment flow.
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3. GHELS TECHNOLOGY
In terms of market strategy, features, and functionality, the cargo portals that exist today lack the comprehensive approach offered by the World Logistics Council. In recent years, various "E-Freight" systems have attempted to address the fragmentation of the GLI. These systems, however, have failed to provide a comprehensive global solution. This failure is due to a variety of reasons: The lack of a technology to address the holistic "door-to door" shipment flow process, the various systems' inability to benefit and address the concerns of all involved players, and finally, the misguided emphasis on a transaction-based revenue strategy to achieve global logistic integration of the growing $4 trillion industry. Vital participants, such as individual shippers, ports, loading companies and surveyors, were summarily excluded as the systems had no way to charge them for transaction services.
The GHELS patent, which pre-dates these existing “E-Freight” systems, is a product of intellectual property via multiple international patents. (For further information on the patent, the PCT Patent Analysis can be provided upon request)
GHELS delivers a comprehensive private sector approach to improve international cargo security by delivering a system that combines commercial efficiency with security compliance. The GLI is primed to adopt the GHELS which provides global integration – a holistic “door-to-door” approach – for all participants. It accommodates corporate as well as individual shippers, generates commercial economic benefits and security compliance to all trading partners, offers ease of connectivity with a horizontal design for proprietary systems to “plug in”, and allows quick and easy portal access for smaller companies.
In summary, GHELS competitors take a much more narrow approach to the global shipping industry. As illustrated throughout this business plan, global shipping and logistics consists of a complex web of interdependencies. To effectively enhance the operation of these networks, all of the various parties involved must be accounted for. The World Logistics Council took all participants into account when the system was designed and patented.
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4. WLC STRATEGY
The top global 100 e-logistics companies have been established based on building and deploying their own tailored solutions in the marketplace, failing to recognize the needs of all parties involved. These approaches are natural when targeting only specific participants of the GLI. The infrastructure of the present top 100 e-logistics companies do not address:
- Monopolistic concerns
- Dependency on one system provider
- Concern of a slow global deployment
The World Logistics Council has a unique deployment strategy for GHELS, recognizing that geo-political acceptance, global rapid deployment and the need to address potential concerns of a monopolistic power over an industry so vital to today's interdependent global economy are of paramount importance. Therefore, the GGN was built with the above concerns in mind. For further details please refer to Rapid Global Deployment section.
Current E-logistic companies have approached the market by selling their logistics software solution with their own limited resources. This approach is time consuming and does not reach out to other organizations. GHELS will create the WLC to provide a new multi-trillion dollar market opportunity for major organizations around the world. Such major organizations include financial and insurance institutions, data system integrators, and shipment tracking providers. The market opportunity created by GHELS will produce a strong strategic partnership between the World Logistics Council and well-established global organizations. Diligent efforts by these major organizations will secure a rapid global deployment. The top 100 e-logistics companies' business models do not create a similar optimal financial opportunity. Therefore, their deployment strategy cannot even begin to compare to WLC's approach.
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A BRIEF SOLUTION COMPARISON WITH SELECTED E-LOGISTIC COMPANIES
Company |
Inttra/G.T. Nexus |
Descartes |
Freight Desk/Cargo Portal Services |
Bolero/Vastera |
GGN |
Category |
Ocean Carrier Portal |
Logistics Market Place |
Forwarder Portal |
Content Provider |
GHELS |
Business Model |
Transactional |
Subscription |
Transactional Application Sale |
Transactional Application Sale |
All |
Orientation |
Vertical |
Vertical |
Vertical |
Vertical |
Horizontal |
Target Market |
Ocean Carrier |
Subscriber Only |
F.F./C.B./C.S. |
F.F./C.B./C.S. |
All |
Shipper |
Corporate |
Corporate |
Corporate |
Corporate |
Corporate Individual |
Mode of Transport |
Ocean |
Any |
N/A |
N/A |
All |
Global Cargo Security |
N/A |
N/A |
OSC |
OSC |
Yes |
Today's e-logistic companies have adopted a narrow and limiting business strategy resulting in costly software with a fragmented approach to the industry. In order to have a successful solution strategy worldwide for the GLI, all elements of the strategy must be derived from the concept that in order to cater to a global horizontal process, one must create a global horizontal solution.
The GHELS comprehensive target market, cost-effective business model, patented non-intrusive technology system and WLC strategy are all imperative elements to ensure geopolitical acceptance and rapid global deployment. Without one of these key elements, any system will fail to meet the demands of the GLI.
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