MURMURS of concern have been expressed in the forwarding community over the WiseTech acquisition of US supply chain software provider E2open.
WiseTech’s CargoWise platform dominates the Australian market and there are fears the deal removes a competitor.
The US$2.1bn deal was announced back in May.
IFCBAA chief executive Scott Carson said since the acquisition announcement, “a number of our members have expressed concerns to us that this acquisition may lead to one less industry software provider being available to them, in a market where there is already only a small number of competitors”.
“Cargowise software is generally regarded as the premium industry service offering in the market, in addition to being regarded overall as being the most expensive,” Mr Carson said.
“We would hope and expect that this acquisition would not result in substantially increased pricing for Expedient software (owned by E2open) and that this service offering would continue to operate separate to Cargowise, noting that we would monitor this situation post-acquisition.”
Mr Carson said IFCBAA would continue to monitor service provider charges.
Freight and Trade Alliance director Paul Zalai said the E2open footprint in Australia was “reasonably small” with most players already using WiseTech’s CargoWise.
“We have had a couple of people who have taken the time to express concerns to us [about the merger], albeit we haven’t been inundated,” Mr Zalai said.
“There also has been some commentary on social media. But if anything, it is probably a bigger issue overseas.
“The broader point is that business competition is healthy and we are encouraged by new entrants into the Australian market.”
A WiseTech spokesperson said there were no technical or other barriers to other players developing and providing a competitive service.
“In addition, Australian Border Force provides a substantial list of existing providers of these types of services and makes technical documentation available to any software developer wishing to develop and supply customs clearance software to Australian customers,” the spokesperson said.
“Freight forwarders benefit from this freedom of choice.”
In addition to existing choices, the WiseTech spokesperson said they were aware of “at least one new player planning to enter and other players could enter if they considered the commercial opportunity warranted it”.
The competition regulator is still to sign off on the deal and the ACCC told Daily Cargo News that “they were aware the transaction had completed”.
The WiseTech spokesperson said they did not consider there were any competition issues.
“We will assist the ACCC with any queries they may have in respect of the completed transaction,” the WiseTech spokesperson said.
“We are a competitive and valuable supplier of customs clearance software… However, if customers wish to change to another vendor from our products, they are free to do so without any limitation.”