Panjiva: Using government data as a platform for international trade

The White House doesn’t yet have much to show yet for its efforts to make the government more transparent. But, unsurprisingly, the private sector is forging ahead where there are business opportunities. A fascinating example is Panjiva, a company that processes publicly-available trade data about any business that ships anything into the United States through any seaport in the country. And today, it is launching a new service that lets other companies with international trade data provide what they know on top of Panjiva’s service.

The result Panjiva is going for: More accurate data about potential business partners, that companies here can use to decide who they want to work with. Or as the tagline on Panjiva’s homepage says: “Factories are closing. Is yours? Need an alternative?” The aggregate data that Panjiva pulls in is also being used by analysts and finance reporters to keep closer tabs on volume of trade. For example, Panjiva can show how imported goods are affecting US long-haul trucking companies (it’s been bad), or where and when trade volumes are stabilizing (like they have been recently).

Making sense of messy data

Panjiva’s core service is based on analyzing raw data about port shipments provided by the US Customs service, part of the Department of Homeland Security — then letting people search its directory of more than 20 million shipping records about more than 700,000 companies. The behind-the-scenes process is still a bit arcane by web standards. While the data is free and technically available to the public, you have to request it from the department, then pay to get it shipped to you on a compact disc. Once Panjiva has the data, it does its own analysis to chart information like changes in shipment volume, then publishes the results on its web site. Panjiva’s analysis includes a graph a company’s trade volume into the US over months and years — a good indicator of whether a potential business part is going to be around for awhile — as well as the company’s products, its contact information, and much more. For a random example, check out the screenshot below. You can see data like the volume (in kilograms) of material that Chinese aluminum company Alnan Aluminium Co, Ltd is shipping into the US.

For additional insight into how a foreign company is doing, Panjiva also compares the department’s data with a few hundred other sources including audits by a variety of international accounting firms, and government data from China and other leading US trade partners. Beyond hard-knuckled business decisions, Panjiva is also working with a number of non-profit organizations like Social Accountability International to show which foreign companies have been independently verified to meet international human rights standards.

Panjiva’s wealth of data helps US companies figure out who to do business with — or not. Its clients include The Home Depot and VF Corporation (owner of Nautica, The North Face and Wrangler clothing lines). Panjiva, backed by Battery Ventures, also has revenue streams in place — although it’s not disclosing how much it’s making. If you want access to all of its historical data on a company, verified contact information, or other potentially crucial pieces of information, you have to buy a single company’s profile or subscribe to the full service. It is also building complementary features, like Panjiva Alerts, which notifies companies of unusual activity among companies in their supply chains.

Building a defensible business

There are a wide range of other services that provide business directories and credit ratings, although I’m not aware of any that provide as much detailed analysis. However, the fact that the data Panjiva uses is publicly available — and potentially quite valuable — means there may not be a ton of client lock-in compared to potential competitors. So the news today is about the company’s attempt to become the platform for trade data and analysis. Panjiva, founded in 2006, is quite literally executing on a theme described by Tim O’Reilly and John Battelle in a recent essay on the evolution of “Web 2.0” over the last five years — cooperating data subsystems. They wrote, “vendors who are competing with a winner-takes-all mindset would be advised to join together to enable systems built from the best-of-breed data subsystems of cooperating companies.”

The new service, called onPanjiva, is letting any other data provider, such as governments, credit bureaus and non-profit organizations, apply to integrate its data with Panjiva’s service. In an effort to bring together as many other data providers as possible under its own umbrella, Panjiva is making the application process and participation free. For businesses looking it to be included, Panjiva says it hopes to use its service to drive revenue to those partners — so presumably there will be a revenue-sharing component within its own service, or obvious links to related for-fee services provided by partners. The application deadline is August 31st.

If Panjiva can get traction through this new effort, it may be able to make itself the best-of-breed service for analyzing business supply chains long before rivals try to do the same thing.

[Image of world trade streaming under the Golden Gate Bridge via my camera phone.]