Tim Lawrence, Director of the Digital Supply Chain Hub at Digital Catapult, calls for a new digital approach to trade regulation.

No region is close to being entirely self-sufficient when it comes to global trade. In fact, every part of the world relies on trade with others for over a quarter (25%) of at least one important type of good. 

This tells us that global trade policies and processes are critical to the success of global supply chains, particularly in light of the fact that approximately 40% of global trade is “concentrated”, whereby importing economies rely on just three or fewer nations for their entire share of global trade. 

As such, calls for a radical rethink of global trade are mounting in parity with increasing disruption to supply chains across key sectors. Public and private entities are racing to ensure that supply chains remain robust and ready to overcome unforeseen challenges, and advanced digital technologies will play an important role in this transformation. 

Digital Catapult’s new international accelerator will look to play a critical role in transforming global import and export processes by leveraging advanced digital technologies, with a view to increasing the efficiency, sustainability and resiliency of global supply chains. 

The growing importance of transforming global trade practices

An uncertain geopolitical climate is prompting many businesses to reconsider their import and export processes. Global trade is critical for economies to grow, directly impacting a country’s gross domestic product (GDP). Maintaining equilibrium between imports and exports is also essential for achieving economic stability. 

This is because fluctuations in trade can have economic implications including devaluing currency and leaving citizens worse off. This is where logistics and supply chain management will play a critical role in achieving the right balance between exports and imports, ensuring robust and resilient trade processes that drive economic growth in the long-term. 

The need to transform import and export processes becomes even more important in light of research from KPMG, which found that poor logistics and supply chain management poses a critical threat to a country’s successful cross-border trade. Tracking orders, determining liabilities for in-transit goods, and meeting promised delivery time frames can be more challenging in cross-border trade due to multicarrier handoffs and border delays. 

New solutions to transform global supply chains and logistics will therefore be critical to solving these challenges, and are even more important as the World Trade Organisation (WTO) expects to see global trade pick up this year following a contraction in 2023. 

How advanced digital technologies may be the answer 

Advanced digital technologies are set to serve as pivotal tools for optimisation and enhancement in the realm of supply chains and logistics. 

The International Chamber of Commerce (ICC) affirms this, noting that the most effective way to boost trade across the G7 will be by digitalising the trade ecosystem, using new technologies and innovations. Doing so, the ICC claims, will boost trade by $9 trillion by 2026, and the acceleration of digitalisation in the sector is driven in large part by new legislation such as the Electronic Trade Documents Act (ETDA). 

The 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, but require countries to embrace digital solutions to comply with the legislation and to yield the best benefits from it. 

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. 

Using AI for example, business leaders can forecast demand, optimise inventory management, and streamline route planning, in addition to complying more with the ETDA by automating reporting processes and reporting their ESG activities more accurately. 

What Digital Catapult is doing to transform global trade 

In my role as Director of the Digital Supply Chain Hub, a national programme working to advance and accelerate the understanding and inclusion of digital technology in UK supply chains, I oversee projects that not only improve logistics and supply chains in the UK, but overseas too. 

We recently launched our first international accelerator with BAE Systems and Leonardo UK  to enhance the efficiency of import and export trade processes.  As part of the programme, we will work with technology providers who can help to solve the challenges, providing funding of up to £85,000. 

The programme titled International Supply Chain Accelerator: Seamless Trade Across Borders, will leverage advanced digital technologies such as AI, distributed ledger technology (DLT), and IoT to solve challenges set out by BAE Systems and Leonardo UK. 

Sharing data for trade transformation 

The first challenge will consider how participants at all stages of the supply chain can standardise and share high quality data effectively. The second challenge will focus on enhanced transparency and visibility of the export and import process steps in the supply chain. 

This is something that technology provider Kavida has achieved, developing a new solution that aims to solve the lack of visibility and control that procurement and supply chain managers in UK SME manufacturing experience after placing an order. Using Kavida’s platform, advanced digital technologies can provide business leaders with the location, condition and expected arrival time of products, and offer further detail on orders that might be of risk. Kavida is an alumnus of the Digital Supply Chain Hub, going on to raise £900,000 in funding, and is testament to the innovation we develop for broader industry at Digital Catapult. 

With approximately 40% of global trade concentrated among a few nations, the need for innovative solutions is paramount, and advanced digital technologies present a significant opportunity to revolutionise import and export processes. At Digital Catapult, we help organisations of all sizes to leverage technologies to address supply chain inefficiencies and enhance global trade, and this is why we have announced the international supply chain accelerator. 

Any company interested in being part of the programme can apply here

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