Emerging document and data processing takes off in global commerce
For consumers, it is unimaginable how much effort is needed to ensure the smooth functioning of international trade, especially in these turbulent times, where enormous challenges follow one another. An extra layer of fantasy is needed to even attempt to understand the ocean of paper documents and digital information needed to come together to create a successful global business event like importing goods into a country.
From the (not yet distant) world of printers and couriers
More than 200 document exchanges, on average, are required to process a shipment, according to IBM. This in itself is a huge undertaking – not only to complete, print and organize at the end, but to coordinate, control, check, validate, approve, request additional information and send by mail. It’s even worse if something needs to be audited, when a document is missing, or becomes suspicious for some reason. Each of these exchanges is the occasion for a catastrophic mistake that can even bring down a company, or at the very least result in the loss of precious time and money.
For decades, progressive companies and agencies have prototyped and introduced various digital systems and solutions; however, these still only solved a single or partial problem, and not for all chain participants. More often than not, documentation still traveled in envelopes with couriers and was referenced in digital data entries, or scanned with scanners and used as a copy – with no ability to transfer possession of the original document, and with capabilities to audit that would bring the dark ages to mind, at best. In hindsight, it seems silly, when you remember how it was done (and still is, in too many places).
By a hodgepodge of effort
Even though digitalization was not a top priority for global trade – and shipping in particular – over the last decade, it has just started to cause rapid change, even revolution in many places.
National and global efforts have accelerated with the drafting and passage of e-commerce document laws. At higher levels, international memoranda and international trade digitalization standardization frameworks have been confirmed. Industry and labor bodies have emerged everywhere with their initiatives to help regulate the digitization of the global flow of goods.
However, it is beneficial to dispel the fog of discussions on standards, frameworks and content from numerous panels at all levels of every possible union, and focus on relevant and real developments. These may seem bold before implementation, but they show significant gains in every KPI imaginable after being used on a larger scale.
The lessons of futuristic Egypt
The Egyptian government has just recently built the NAFEZA One-Stop Shops for Global Trade Facilitation – in simple terms, a system to connect all participants, ports for sea, air and land transport, and government entities, with trade operators. from all over the world, to more easily support In processing. The goal was to simplify and unify processes, while increasing efficiency and productivity, reducing the error rate and gaining a better understanding of trade flows to Egypt. The immediate benefits for the Egyptian government include the integration of 26 government agencies associated with the clearance of goods and the establishment of a reliable national data warehouse.
The final missing pieces of the puzzle were how to ensure fast, reliable, transparent and immutable transfer of relevant documentation from around the world and at the same time assure all participants that no one can tamper with a record, as well as ensure a timestamp and a reliable signature. of documents. They have integrated the locally built one-stop shop NAFEZA with the global platform CargoX for Blockchain Document Transfer (BDT), which is based on a public Ethereum blockchain.
As Gamal Kotb, Managing Director of MTS, the public provider of the NAFEZA platform, explains: “MTS needed access to the outside world to obtain documents and other services. We researched this area and decided to enter into a partnership with CargoX, to provide a one stop shop system for those exporting to Egypt. This community sees us through the CargoX platform and their solution. »
Now let’s talk about the practical benefits, to avoid sounding too academic. Egypt has achieved increased transparency for all participants, elimination of red tape and a reduction in the average cargo release time from 29 days to 9 days, with a notable reduction in demurrage and storage charges containers. Compliance costs for shippers have also been reduced from over $600 to $165 or less as a result of moving to blockchain as a means of sending important documents in their Advance Cargo Information (ACI) filings. .
Africa leaps ahead, while Europe is just getting started
Let’s not forget that the first electronic implementations of Advance Cargo Information Systems (ACIS) have been launched in the African states of Burundi, Kenya, Uganda, Rwanda, Tanzania and Zambia!
Looking at the African continent as a whole, it is very diverse, but offers many opportunities to leapfrog with modern technology, especially in the area of import and export processing. Countries with enormous natural resources that wish to gain insight and maintain oversight of the trading landscape can easily move forward to ensure better transparency, prevent falsification of documents, and audit any trading activity or subject as needed.
A few hours’ flight north, the European Union, Africa’s traditional trading partner, has just concluded an agreement on the EU’s new single window environment for customs, which will help the old continent to streamline the digital customs cooperation and facilitating trade. This will replace the old Import Control System (ICS), which will be phased out by 2024.
Fastest and most logical processing
Going back to the 200 exchanges of information required for a single trade shipment draws a parallel with the Rubik’s cube. Every time someone mixes it up, there’s an exact number of moves needed to put it together in the shortest possible time. We see people putting it together in seconds (even underwater), and it’s amazing to watch – compared to hour-long tries, which more often than not don’t even end in success.
I try to imagine modern global trade and shipping systems with this exact metaphor. The shortest possible time to complete tasks, the best and most logical process, and a complete overview of what’s going on in the process, and who needs to do something at any given time. Although the digital nature of the approach, remote participation in any process, as needed, comes with maximum transparency and accountability at all times.
Oceans of floating paper business documents transform into streams of electronic business documents and data. And anyone can ride the wave!