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GUEST COMMENT International import and export processes require a radical rethink 

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As it stands, no region is close to being self-sufficient when it comes to global trade. Every part of the world relies on trade with others for more than 25% of at least one important type of goods, demonstrating the importance of global trade policies and processes. In fact, approximately 40% of global trade is “concentrated”, where importing economies rely on three or fewer nations for their share of global trade. 

What this tells us is that global trade requires a radical rethink, writes Tim Lawrence, director of the Digital Supply Chain Hub, Digital Catapult. To ensure that supply chains are robust, resilient and ready to overcome unforeseen challenges and disruptions, something needs to change, and this is where advanced digital technologies will play a key role. In the months to come, Digital Catapult will consider how advanced digital technologies might transform global import and export processes to unlock new opportunities for efficiency, sustainability, and economic growth, with the launch of an international accelerator programme.

The need to rethink and reform global trade policies
Recent events have underscored the need to rethink international import and export policies. Global trade is critical for economies to grow, as it directly impacts a country’s gross domestic product (GDP). Maintaining a balance between imports and exports is essential for economic stability, as fluctuations can distort the trade balance and devalue the currency, affecting everyday life. Effective logistics and supply chain management plays a key role in achieving this balance, ensuring robust and resilient trade processes that support economic growth.

In a recent report, KPMG found that poor logistics and supply chain management pose critical threats to a country’s successful cross border trade. Tracking orders, determining liabilities for in-transit goods, and meeting promised delivery timeframes can all be more challenging in cross-border trade due to multicarrier handoffs and border delays. This is where embracing new solutions to transform global supply chains and logistics will be important, particularly as the World Trade Organisation (WTO) expects global trade to pick up this year following a contraction in 2023. 

In light of expectations for increased global trade, adopting solutions underpinned by advanced digital technologies will be critical to meeting demand, maintaining balance of exports and imports, and driving economic growth for countries that rely significantly on trade partners. 

How advanced digital technologies may be the answer
In the realm of enhancing supply chains and logistics, advanced digital technologies are set to serve as pivotal tools for optimisation and enhancement. In 2021, the International Chamber of Commerce (ICC) asserted that the best way to boost trade across the G7 – by $9 trillion by 2026 – is by digitalising the trade ecosystem, using new technologies and innovations. Adopting new solutions and advanced digital technologies will enable global trade to be more efficient, inclusive and equitable, particularly in light of new legislation.

The Electronic Trade Documents Act (ETDA) is now in force in the UK, with similar legislation coming to Germany. This law aims to streamline cross-border trade by digitising commercial transactions, regulatory compliance information, and cargo logistics. The ETDA’s benefits are immediately accessible, with a reported 80% reduction in border waiting times, 18% decrease in shipping costs, and a 30% improvement in profitability.  These digital improvements also facilitate easier access to trade capital and help meet ESG compliance requirements. 

The UK government’s Ecosystem of Trust pilot programme supports these findings, showing a 60% reduction in government data requirements and a 17% reduction in decision-making time. The legislation, applying to documents governed by English and Welsh law, covers about 80% of global bills of lading, with similar laws being considered in Germany, Singapore, and Commonwealth countries

At Digital Catapult, we work with a range of advanced digital technologies including artificial intelligence (AI), quantum, machine learning, the internet of things (IoT), immersive and more to consider how these technologies might solve industry challenges including those that exist within the supply chain. AI for example can enhance demand forecasting, optimise inventory management, and streamline route planning. IoT enables real-time tracking of goods, improving visibility and compliance, and quantum computing can help solve complex optimisation problems. 

At Digital Catapult, we aim to harness these technologies to address supply chain challenges, make sustainability gains and unlock new opportunities for our commercial partners. One example of how we have achieved this is with the Logistics Living Lab project. The project was launched to cut the carbon emissions of empty lorries on roads across the UK, applying digital technology to create a shared public infrastructure for managing delivery vehicle slot filling, routing, and tracking. This will enable logistics companies to collaborate where necessary, and still compete in new and more efficient ways, while enhancing UK manufacturing capability and making progress towards net-zero. 

Tim Lawrence, director of the Digital Supply Chain Hub, Digital Catapult

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