By Peter Kosmina, TradeWindow Country Manager – Australia

Next time you meet a friend for coffee, pause for a moment to think about the sheer volume of data that is exchanged just to bring this coffee to your table in this café, this town or city, this country.

International trade is a fast-moving, high-risk, high-cost environment, which only works efficiently when each individual party can trust and verify each piece of information, even something as simple as your morning coffee.

The reality is that, according to Boston Consulting Group, every cross-border trade transaction typically requires the collaboration of over 20 entities to produce 10 to 20 documents.

Impressively, this involves the exchange of approximately 5,000 data fields, covering areas such as compliance, operations management, trade data, commercial contracts and so on.¹

Trade data is neither one-directional nor one size fits all.  Traditional ‘supply chain’ thinking keeps us trapped within the paradigm of a 20^th-century mechanical metaphor, when the future is digital, multi-dimensional, instant, lower-touch and lower carbon – a ‘supply network’, rather than a chain.

The very concept of the traditional supply chain essentially defines a linear, sequential process: one player in the chain completes a required action, and it is then passed on to the next person or organisation in the chain.

To some extent this is what happens with the physical movement of goods – they can only ever be in one place at one time, moving consecutively through the chain – but as these so-called supply ‘chains’ become more complex, so too does the way that the data moves and is interacted with.

For example, solutions such as TradeWindow Cube and other solutions in the market enable relevant stakeholders almost anywhere in the world to access, view and edit data in real time.

This was not possible when the data being transferred was solely paper-based and being flown – or shipped – from port-to-port and party-to-party along the chain. This is not an abstract problem.

Experts from Melbourne Business School and Accenture, believe Australia is facing its most acute existential crisis since World War II. They attribute this to the fact that we conduct 98 per cent of our trade through ports, compared to the global average of 90 per cent, and global disruptions in sea freight and increasing cost of container shipping pose heightened challenges for Australia.²

With economies being literally held over a barrel by constraints in our ‘supply chain’, isn’t it time to look for every edge, not just in delivering documentation, but its accuracy, timeliness, and security?

What’s in a name?

Unlocking the potential of ‘digital’ means tackling the traditional siloes of trade (commercial, logistics, finance, and government) and embracing a view of trade as a network or web, rather than a ‘chain’ of linear, consecutive links that rely on each other to hold the integrity of the chain.

After the recent upheavals in supply chains, we are beginning to see more organisations and players across the industry shift their thinking to supply networks to build resilience into their business models.

Where traditional supply chain objectives were to optimise cost savings and service levels while delivering top-line growth, the focus now is on building a resilient supply network that achieves the desired level of reliability, at the minimum possible cost.³ Furthermore, as customer expectations have radically transformed due to ‘one-click’ shopping with next-day delivery, the role of supply chains has shifted from a business enabler to a business differentiator,⁴ and one that needs disruption.

Freight Forwarders across the globe are becoming exponentially busier because their customers are demanding more ‘real time’ information which the forwarders are still scrambling to deliver because of siloed and/or inadequate information sources. For example, some truckers have latent reporting structures, meaning it could be hours (end of the day or even next day) before a container event such as proof of delivery is reported, or due to highly manual internal systems to capture and share data, finding out about cargo movements is a slow and laborious task. Those that often bear the brunt of this increased customer expectation are the people working on the ‘front line’, ironically in areas often referred to as ’back-office’ operations.

With the growth in supply networks, and all the data and access points across the networks, managing the integrity and security of data is paramount. This is where blockchain can shine and restore trust in trade, according to the World Economic Forum. The use of such cloud-based ledger technology means that records cannot be manipulated, faked, or duplicated – all while increasing transparency and visibility along the supply network.⁵ 

We are seeing this first hand at TradeWindow, where our customers have a permanent record of a product’s journey at every touch point – including everything from location and the time of arrival to the temperature of the container throughout the journey – it also creates a record of every data-driven action across the entire network. Our customers and their trade stakeholders, all the way through to end consumers, enjoy the collaboration, increased transparency, and real-time data on which to base their decisions.  One of our business customers, ANZCO Foods, reports a 63.4% gain in productivity and a major reduction in time spent on documentation, reducing the load on the team by 40-50 emails per day.

The next time I’m in that café it would be nice to think of all the parties working together to enable the seamless networks of data and trade, not just the traditional supply chain, flick pass, offload.

[1] Boston Consulting Group, 2019: ‘Digital Ecosystems in Trade Finance: Seeing Beyond the Technology’: https://www.bcg.com/digital-ecosystems-in-trade-finance-seeing-beyond-the-technology 

[2] Australian Financial Review, 2022: ‘Supply chain fragility an ‘existential threat’ for nation’: https://www.afr.com/work-and-careers/education/supply-chain-fragility-an-existential-threat-for-nation-20221004-p5bn5u

[3] Australian Financial Review, 2022: ‘Supply chain fragility an ‘existential threat’ for nation’: https://www.afr.com/work-and-careers/education/supply-chain-fragility-an-existential-threat-for-nation-20221004-p5bn5u

[4] From supply-chains to supply networks: https://www2.deloitte.com/nl/nl/pages/enterprise-technology-and-performance/articles/from-supply-chain-to-a-supply-networks.html

[5] World Economic Forum, 2017: ‘How blockchain can restore trust in trade’, https://www.weforum.org/agenda/2017/02/blockchain-trade-trust-transparency