Business-to-business marketplaces utilising electronic payment systems are springing up continually, posing some threat to traditional providers of documentary credits that do not fit these new business models as well as some the electronic alternatives. Judging how serious an impact e-commerce will have on paper-based methods of payment has also become a pastime for some ¯ and a new opportunity for research consultants.

Documentary credit practitioners may be comforted by a study by Mercer Management Consulting, Optimum Logistics and the Journal of Commerce of traders and distributors in several sectors, most of whom said the Internet had not solved their biggest problems. The study probed 142 executives in the chemical, steel, forest products, liquid bulk and other related industries, regarding the use of the Internet in bulk material supply chains.

While 75 per cent of respondents used the web to support trading activities, many said the Internet fails to address the most fundamental problems ¯ poor communications, documentation problems, paper intensity and low quality of customer service. The study also found only 15 per cent of respondents using the Internet for value-added financial services, including letters of credit as well as financing, ship broking and insurance.

Reasons preventing participants going online to do business included concerns over security, the quality of services on offer, up-front costs and difficulties integrating new and legacy systems.

The question would seem to be whether stable e-logistics platforms are just around the corner (as promised) or whether they are still a distant prospect. Industry observers suggest fast growth in the next couple of years, a conclusion that seemingly assumes reasonably stable platforms. Delloite Consulting in June 2000 identified nearly 1,500 electronic marketplaces, a figure that analysts suggest could reach 20,000 by 2003.

Goods worth an estimated US$23 billion were traded via electronic marketplaces in 1999 according to Gartner Group analysts. They too reckon a sufficient mass of traders will find platforms stable enough to write business worth US$2,700 billion on by 2004 when, according to Gartner, 20 per cent of total world trade will be transacted online.