Port of Rotterdam and C4DTI are working on it
This summer, the Centre for Digital Trade & Innovation (C4DTI) and the Port of Rotterdam Authority will support a pilot to transport a shipment of meat from New Zealand, via Singapore and Rotterdam to the UK, without having to manually transfer all kinds of documents. This sounds simple, but in practice it is not. If we can achieve this, it will save considerable costs in international trade.
Anyone wanting to have a container transported from A to B has a lot of paperwork to deal with. “The same information needs to be uploaded into various systems,” explains Raoul Tan, Head of Digital Trade at Port of Rotterdam. “The exchange of information and documents between cargo owners, carriers, financiers, insurers, customs and other bodies is barely automated. This is inefficient and fairly error prone.”
ANZCO Foods, one of New Zealand’s largest exporters, recognises the opportunity of going paperless. “We’re excited to see how the pilot transaction will benefit our company as we handle regular shipments between New Zealand and our sister company in the UK,” says Leigh-Anne Furby from ANZCO Foods.
According to estimates by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT), over 80% of global trade relies on paper documents. This includes a wide variety of documents such as bills of lading, customs declarations, certificates of origin, commercial invoices, packing lists, and more. The sheer volume of paper documents circulating in global trade is staggering, with billions of documents exchanged annually.
Billions and trillions
In a recent study, McKinsey estimated that if the electronic bill of lading obtained 100% adoption across the industry, it could unlock around 18 billion dollars in gains for the trade ecosystem through faster document handling and reduced human error among other improvements, plus 30-40 billion dollars in global trade growth, as digitalisation reduces trade friction. A study by the World Economic Forum (WEF) estimated that digitalising trade documents could even save up to 1.1 trillion dollars a year by 2028, with potential cost savings of up to 15% per transaction.
What are we waiting for? “Unfortunately, it’s not that simple,” says Tan. “We are used to working with a large number of documents, but actually it’s all about the information. We need to think more in terms of data instead of documents. To do that, we need to work with global standards so that everyone speaks the same ‘language’. Then there are obviously various technical hurdles to overcome, but legal challenges are also around the corner. For instance, in a digital flow like this, when is the transfer of responsibility and liability between parties for the cargo?”
Environment where paper is no longer used
Port of Rotterdam and C4DTI are jointly taking up that gauntlet. C4DTI is an International Chamber of Commerce (ICC), United Kingdom branch-led, global initiative based at Teesside University. Nick Davies, director of C4DTI: “Our vision is a modern, digital trading system that is cheaper, faster and simpler for all companies, amongst others by creating an environment where paper is no longer used. This pilot fits in seamlessly with that. It’s not just about splatting existing documents on a screen and calling that digitalisation. It is about taking a step back and asking how you would manage trade processes if you were starting now with all the digital technologies at our disposal?”
“Ultimately, all everyone needs to know is the answer to three questions,” Davies continues. “What is it – the Certificate of Origin? Who owns it – the Bill of Lading? And who is paying for it – the Promissory note, LoC, etc.?. As Raoul says, we can capture and assure the data needed to answer those questions and dispense with the need for the forty or so documents that could be involved. And if we capture that data, do the physical assurance and manage the cashflows in the same safe, secure and private digital environment, then that’s where we get real transformation.”
The Rotterdam port’s ambitions are closely linked to this. Tan: “Innovative technology plays a key role in the twin transition of green and digital. It helps us make the port of Rotterdam as efficient as possible. Because anything that is not efficient is also not sustainable. Better insights also enable sustainable decision-making. Our approach is based on three pillars: seamless, sustainable and connected. By seamless port, we mean a port with short turnaround and berthing times for ships, smooth processes and high customer satisfaction. Together with market players, we showcase the possibilities of digital tools to support these goals and also push for adoption to maximise the impact. This helps us reduce CO2 emissions and thus transform into a sustainable port.”
Involved organisations
TradeWindow is a technology company focusing on infrastructure for paperless trade. “This is a fantastic initiative for New Zealand exporters to the UK. Using the momentum of the recently signed Free Trade Agreement, paperless trade will lower costs, improve efficiency, and broaden access to this increasingly important trade route,” says Adrian Collier TradeWindow’s Chief Product Officer.
Tan continues: “What you see is that to achieve sustainable and paperless trade corridors, you need broad international cooperation. For example, various regulatory institutions require physical documents to be handed over. You then just have to comply with that. That also applies on this route from New Zealand, Singapore, Rotterdam to the UK. Fortunately, all authorities have agreed to this digital pilot. Everyone is very aware that this is going to be the future. It’s nice to be able to contribute to that.”
Davies adds: “As Raoul suggests, the digitalisation of trade is a team sport and the more input we have from carriers, lawyers, insurers, ports, governments and, most of all, the shippers themselves, the better the outcomes will be across the supply chain. I call on anyone with an interest to lean into what we are doing and get involved. This will not be the last pilot we run and by doing more, we will learn more and be better able to implement the trade platforms of the future.”