It’s almost six months since the Electronic Trade Documents Act (ETDA) entered force, and recent progress at the World Trade Organization (WTO) 13th Ministerial Conference (MC13) suggests there is even more to come on trade digitalisation. But how are firms putting the legislation to use?
CuetheBBQ
The Times reported this week on how CuetheBBQ, an importer of barbecue charcoal and wood, has been using electronic trade documentation to bring containers from South Africa to the UK. It recently shipped a 40ft container of wood from the country, where it cuts down invasive species trees to provide its supplies while also improving the local environment.
The firm ships up to twelve containers a week, and the move to electronic trade documents has yielded considerable savings. With quicker access to documentation for freight handlers and border officials, including digital invoices and declarations, the firm says it is saving between US$100 and $200 per container. Costs have come down to $15 a consignment.
Less friction
The shift has meant better visibility and predictability for all consignments and eased the resolution of delays at ports of entry.
Managing director of the firm Jody Cleworth told the Times:
“The transfer of this information has always been very siloed, but with the ability to create digital documents attached with the underlying data, you can automate it.
“It allows us, as a small business, to use products that allow for a more frictionless experience. It’s an opportunity for small companies to take advantage of new technology.”
The Institute of Export and International Trade (IOE&IT), in collaboration with CargoX software solutions, helped CuetheBBQ to make the move to electronic documents. CargoX supported the firm to create electronic documents with its Blockchain Document Transfer (BDT) platform. This enables secure electronic exchange of documents across a company’s supply chain.
‘More than a step forward’
Marco Forgione, director general of IOE&IT, said:
“Cue the BBQ’s ability to more easily move goods from South Africa to the UK during these shipment trails highlights how technology is enabling faster and more cost-effective international trade.”
“The transition from paper to digital documents is more than a step forward for UK trade and businesses; it is a leap towards effectiveness, sustainability and a seamless global economy.”
“As we transform the landscape of international trade with the power of digital documentation, business can gain the benefits of speed, accuracy and environmental responsibility that it enables. IOE&IT is helping businesses of all sizes to start their journey through digital transformation for trade and we hope to continue to be able to support businesses in the future.”
Bank implementation
Lloyds Bank hit a milestone for UK digital trade last year when it completed the first transaction under ETDA, having in 2022 completed the first UK digital promissory note using a contract law precursor to the Act.
Last week, Lloyds took another step towards trade digitalisation by joining a trade digitalisation platform, WaveBL, according to the Fintech Times.
The move is intended to allow its clients to make use of electronic bills of lading (eBLs), and follows on from the bank’s signing of a declaration promising to support use of the documents in October last year.
Lloyds’ head of trade and working capital products, Rogier van Lammeren, said that “paperless trade is the future,” promising “economic growth, increased efficiency, reduced risk and environmental sustainability”. He added:
“Our clients now have easy access to a global platform for [eBLs] to complement our existing suite of digital trade documentation solutions – enabling them to capitalise on opportunities quickly and securely, while reducing their impact on the environment.”
The IOE&IT perspective
Speaking to the Daily Update, head of Task Force at IOE&IT, Sonia Gutierrez, said:
“The gradual uptake of digital trade practices under the ETDA signals a growing acknowledgment among firms of its operational and strategic advantages. Although the legislation came into force in September 2023, the digital platforms and infrastructure are still in the developmental stages.
“Nevertheless, tech companies are actively incorporating the newly standardised eBLs into their systems and promoting its adoption through demonstrations at logistic events.”
She added it was “imperative” for stakeholders from freight forwarders to banks, customs brokers and beyond to “collectively embrace these changes”.
Implementing the changes would “not only streamline burdensome administrative processes but also enhance safety and confidence in ownership control, especially when tied to payment mechanisms like letters of credit”.