GET THIS. OVER 5.7 MILLION SEA CONTAINERS SLIP IN and out of U.S. ports every year. Over 40 percent of them sail out of Chinese ports. Right from tenders sent out while choosing a freightline to carry a container, to the documents that track the goods at lading, in transit, and at port of entry, to a whole bunch of customs-dictated legal documents, paperwork flies around the world on fax machines. Not surprisingly, Murphy has a big say in all this. Remember that crystal soap dish you picked up at Wal-Mart this January for just 99 cents? It was because the container got held up at a port and didn’t reach the store in time for the Yule tide.

Aaron Sasson, Anil Nair and Vijay Sundaram used to meet for a soccer game on the weekends. Sasson had just sold Scopus Technologies, a company he founded and took public, to Siebel. Nair had been a director at the company. Typical of the late 90s, the trio mulled over possibilities of another startup. “We didn’t think of building a new technology that could find new business opportunities,” recalls Sundaram. “Businesses were sinking under myriads of problems, and we focused on solving problems. The technology may not even be the differentiator.” It took a while to get around to this way of thinking.

The trio’s camera panned the ancient industry of shipping, and they realized the huge market in the underlying processes that moved millions of containers across the seas. The quagmire in this industry was compounded by innumerable charters, non-standard paperwork processes, information gaps between shippers, carriers and receivers, geographical laws, and so on. The trio realized that the business required tight information integration, automation, and robust business processes that could work with every member of the supply side.

In 1998 GT Nexus was founded, and very quickly the founders brought in John Urban, a key executive at APL, one of the world’s largest shipping lines. To generate supplier side interest, GT Nexus started a consortium panel of key players in the shipping line business, holding its first meeting in Singapore. “It wasn’t that we were saying something new,” says Sundaram, “but what we presented as customer research, and the advantages of an automated business process solution found resonance with the audience.” Three months later, GT Nexus presented a business plan of what it would endeavor to deliver.

With forethought rarely seen in that year, GT Nexus wove together a charter of governance that would guide the consortium. “Here was competition coming together with an unknown entity called GT Nexus,” says Sundaram. “They had to be assured that what we developed would not compromise their businesses, competitive edges or strategies.” The governance model bought the startup tremendous support and assured the longevity of the relationship.

For the next year, the company worked with each of the consortium’s member, understanding the transaction processes, information flow, and the lacunae that created failures. “Some companies even had their own satellites which tracked ships, but the information was finally delivered around on paper,” says Anil Nair, the technology head at GT Nexus. “The suppliers had to move from this model to an electronic one, where a ringside view of real-time status could be developed.” GTN, the web portal, was built on a Java 2 Enterprise Edition (J2EE) platform, using software from BEA Systems Inc.’s WebLogic and Vitria Technology Inc.’s BPM (business process management) in addition to proprietary technology from GT Nexus, GTN’s Web-based front-end links directly into each carrier’s back-end proprietary system.

“We did not seek to deploy proprietary enterprise applications that needed long cycles,” says Nair. “Our product was a front-end that simply looped to the applications already in place within the company.” Hosted over private logistics networks, GTN’s web portals have brought uniformity in information exchange right from order to destination.

In this model, the private logistics network serves as the information “nerve center” for the enterprise and its trade partners, enabling suppliers, 3PLs, forwarders, carriers, brokers and end customers to seamlessly connect with the enterprise and with one another to coordinate the global movement of goods and information. This centralization of process and data within a single, standardized network guarantees that partners are acting on information that is accurate, up-to-date and available from anywhere in the world, any time day or night.

Today, GT Nexus has some large corporations like Home Depot on its client list. Others include Mitsubishi, Hewlett-Packard, KB Toys, P&G, DuPont, and LG Electronics. At Home Depot, GTN products have helped in improving the giant’s efficiency in moving around the over 100,000 containers it brings into the U.S. annually. “The transportation market is over $1 trillion,” says an analyst at Forrester. “Inefficiencies account for a large part of this bill, and end-to-end solution providers will find good opportunities in this space.”

Most large companies run their businesses internationally, not globally, says Jack Maynard at Aberdeen. Large companies usually have an assortment of foreign subsidiaries that are self-contained businesses running their own systems that don’t work well with each other. Throughout the enterprise, functional silos further frustrate a seamless approach to global logistics management. “There has to be convergence if only because these applications are functionally related and need to exchange information,” says Sundaram, and that is where GT Nexus sees its market expansion.

“Today, we build our products suites with integration and security as key necessities, not next version strategies,” says Nair. “Our system is evolving as one that manages the major elements of global logistics, but also that has links into other external systems such as warehousing and trade compliance where we will probably never have applications.” It has been a fair voyage so far for this Alameda, CA company. What do the winds portend?