Surecomp® has announced the completion of successful electronic bills of lading (eBL) transactions, bringing together multiple parties via its collaborative trade finance platform, RIVO. 

Following initial transactions processed in September last year, this second phase focused on streamlining the entire eBL workflow to enhance efficiency and transparency, demonstrating how an error-free process can reduce transaction processing time to just one hour.

Surecomp conducted two separate pilot transactions concurrently, with MSC Mediterranean Shipping Company (MSC), the world’s largest shipping company, acting as the carrier generating the eBL in both cases. 

The first transaction also included MAN Truck and Bus, Commerzbank AG, and Bangkok Bank, while the second involved Voith, another German corporate, Bayerische Landesbank, and Indonesian bank PT Bank BTPN Tbk (Bank BTPN).

Using an integration with the WaveBL platform to efficiently generate the digital Bill of Lading—a document typically presented under a Letter of Credit (LC)—the eBL was then attached to the LC transaction in RIVO. Demonstrating a smooth transition from the physical to the digital realm, the document was centrally accessible and transferable to all parties: the beneficiary, advising bank, issuing bank, and applicant. 

The entire process took only one hour to complete. With live status updates verified simultaneously on the WaveBL platform throughout the process, the clean documents were presented under an electronically issued Letter of Credit (eUCP LC).

This secure and seamless eBL ownership transfer via RIVO will facilitate bank adoption. Having also partnered with other leading eBL solution providers in the market, Surecomp is integrating more providers into RIVO.

By eliminating the need for separate onboarding and training for each one, banks can use RIVO as a centralised hub to access all their eBL providers in the same workflow, seamlessly connecting their eBLs to the LCs.

Ofer Ein Bar, VP Financial Institutions at WaveBL, said, “The WaveBL platform issues thousands of electronic Bills of Lading worldwide every day. Some of the largest global shipping companies already trust us to lead the trade revolution. We are confident in our partnership with Surecomp. The success of this transaction will accelerate banks’ adoption of electronic trade documents, marking a significant step toward global trade digitalization.”

“We were able to prove how centralizing the eBL management on RIVO can significantly enhance the process efficiency and operational stability,” said Enno-Burghard Weitzel, Surecomp’s Chief Solutions Officer. “Aggregating digital documents from various platforms represents a significant departure from the traditional, time-consuming paper-based processes that often take days or even weeks. Fostering eBL adoption by banks using RIVO to centralize the workflow, Surecomp remains committed to pioneering trade finance innovation, and the success of this eBL under LC marks a substantial leap forward in digitizing global trade.”

Shipping is the backbone of international trade. 

According to UNCTAD, over 80% of all trade is transported by cargo ships. Over the past few years, however, we have seen increased macroeconomic and geopolitical tensions that have caused supply chain disruptions, directly impacting the shipping industry.

To help demystify some of the greatest challenges facing the shipping and freight forwarding industry today, Trade Finance Global (TFG)’s Deepesh Patel (DP) spoke with Director of HR Maritime, Richard Watts (RW).

DP: Maritime disruption, or what many call ‘the end of the big boat era’ is the flavour of today’s conference at Commodity Trading Week. We’ve seen huge reductions in volumes that the Panama Canal can handle due to extremely low water levels, port congestion in places like Long Beach, a continuation of the Red Sea crisis leading to 10% increased transit times and CO2 emissions, and many other shipping challenges. How do these supply chain woes impact commodity trading?

RW: Shipping is a very big part of commodity trading. But, when you look at the transportation of goods around the world, the amount of time it actually takes to move goods from A to B doesn’t really matter that much, as long as the supply chain is well-planned and well-organised. 

It’s when things don’t go as expected that you have a major issue. 

We saw the disruption within the Suez Canal, where the Evergiven given got stuck for six days in March 2021. That isn’t a particularly long time, but it became a massive problem for shipping because vessels had to start deviating unexpectedly. 

We’ve seen more and more disruptions over the last couple of years. It may be that global supply chains have become dependent on increasingly delicate systems, but as a result of these disruptions, we are starting to see many trading companies build more robust systems and incorporate contingency plans into their supply chains. 

Take some of the current shipping disruptions that we are seeing now in the world – like the Red Sea or the Panama Canal. These are situations that we have now been able to calculate for and, for the most part, we know how to handle them. 

If a vessel can’t go through the Red Sea, then it can still go around the Cape of Good Hope. If it can’t go through the Panama Canal, it can still go around the Magdalene Straits. 

As long as we know about these in advance, we can make the necessary plans and adjust our supply chains accordingly. Where the big problems arise is with unanticipated disruptions.

For example, if we were to suddenly see the Strait of Hormuz closed tomorrow, then the world supply of oil would nearly get cut off overnight, which would cause major issues. 

DP: For vessel operators, buyers and sellers, and those involved with maritime transport, understanding contractual obligations and wording is absolutely key, especially when things go awry. Dali’s recent collision with the Key Bridge in Baltimore is one example of this. How can we ensure that contractual obligations are tight when accidents such as this happen?

RW: The problem is when everything goes right, you don’t really need a contract because everyone is happy. It’s when things go wrong that people start laying blame and pointing fingers, which is when you need to start identifying what the contract actually says. 

Unfortunately, this is when a lot of people start looking at the contract and realise that it’s not anywhere near as accurate as it should be. But there are also a lot of times when people don’t actually understand what is included in the contract. 

I had a client who recently shipped cargo from Asia to the US east coast and their vessels would always go through the Red Sea and the Suez Canal. In January, just after the attack started happening and vessels started deviating, this particular ship owner also decided to deviate. 

The question became: who was responsible for paying for that added voyage? 

In this case, since the contract didn’t say anything about who would be responsible for this, there ended up being a dispute with the ship owner.

It’s important to realise that it really doesn’t really matter who you agree will be responsible for something like this – because it will ultimately get priced into the contract anyway – what matters is that it is clearly determined ahead of time. 

DP: Why is it important to understand for trading companies to understand their shipping positions with respect to Incoterms? Can you give any case studies? I’ve heard the Ex Works is a pretty bad Incoterm to use.

RW: The Incoterms are really the foundation of our business and are one of the most important aspects of what we do on a day-to-day basis since they determine some very important aspects of our contract. They determine where risk is transferred from one party to another and who is going to pay for what costs. 

But its important to realise that there is plenty they do not determine. For example, Incoterms do not govern the transfer of title, they do not determine when payment must be made, and they do not cover a lot of other areas that people tend to assume they do. 

This is why it’s important to be very clear about what is covered under the Incoterms and to avoid using what we call ‘hybrid Incoterms’, where we take one Incoterm and stick it onto another. 

For example, I’ve seen people try to use something called ‘FOB + Freight’, instead of the correct ‘CFR’ (Cost and Freight). I’ve also seen ‘FOB + Freight Delivered at Destination’, which doesn’t actually have any meaning at all. 

And I even saw a contract recently that called for ‘DES’, which is an Incoterm that doesn’t exist under the latest rules. Does that mean ‘DES’ as per the latest set of rules when it existed? Does it mean the replacement to DES now, which would be either DAP or DAT? When there are multiple interpretations, if something goes wrong in the shipment, it will almost certainly end up in a costly dispute.

To be effective, these things need to be clear within the contract.

DP: Sanctions regimes are hard to keep up with, particularly for cross-border commodity traders. Can you give any examples of why it’s important to ensure you’re compliant, and what could happen if you’re not?

RW: Over the last 20 years, sanctions have become something that’s more and more important to pay attention to. 

Today, it can destroy a company to be in breach of sanctions. Take BNP Paribas, they ended up suffering a $10 billion fine because of sanctions and ended up closing down their trade finance business. 

Trading companies have also realised the consequences of this. In terms of the different sanctions themselves, it’s a question of what your exposure is and what you’re involved with. Some companies take it more seriously than others, but they all should take it very seriously. 

A few years ago, I had a client who had loaded cargo of bitumen from Dubai. The problem is that Dubai doesn’t export bitumen; bitumen comes from Iran. The shipping documentation, which was written in Farsi, ended up in a bank where the employees were Arabic-speaking, making it obvious that something was awry. 

At the time the bank dealt with this directly with their client, and it didn’t end up in the hands of the regulators, but today it would. 

DP: Demurrage charges are another complex yet important topic to understand. Why must charterers understand these risks and their positions?

RW: Demurrage is important to understand for the sheer amount of money that can be involved. 

I was dealing recently with the situation of a large oil tanker, where the penalty for delay was around $100,000 per day. In this case, the intended loading couldn’t occur because of an issue with negotiations, and they had to find a different terminal to load from.

Ultimately, the vessel waited 27 days before loading, costing around $2.7 million. 

Even if you feel comfortable that your counterparty is responsible for the delay – perhaps because there’s a contract that says they are – the question is would you be able to enforce it? Can you actually get that money back from your counterparty even if you win a dispute? 

DP: What are your top tips for commodity traders when it comes to avoiding some of the biggest risks when it comes to maritime transport?

RW: One of the main tips I would give is that if it looks too good to be true, it probably is. 

Don’t chase those business opportunities that promise to make you a quick fortune because it’ll probably be more trouble than it’s worth. 

I would also say the devil’s in the details, so make sure that you are careful. We often say that you make your money in trading and you lose it in operations. You don’t need to, but it’s very easy to lose money in the operations side of the business. 

A wonderful PnL that’s lost through operations still ends up a loss.

After 18 months of collaboration, coordination, and deliberation, international trade experts and the ICC Digital Standards Initiative (ICC DSI) have completed their Key Trade Documents and Data Elements (KTDDE) report.

The KTDDE report, chaired by Robert Beideman of GS1, collates and defines 36 key trade documents, which are vital to the health of the international trade ecosystem. Although these documents have long underpinned the trade industry, they were never harmonised, which created roadblocks for a truly interoperable system.

Though it was a long process, with “Batch 1” of the KTDDE being released in March 2023 and “Batch 2” released in November 2023, this final report marks a milestone for the ICC DSI, and the wider trade world.

Of the 36 key trade documents analysed by the ICC DSI, they broke them down into three categories.

1. Standardised
2. Standards exist, but without interoperability
3. Early-stage standardisation 

Harmonisation of trade documents is a vital first step in global interoperability. Now, the path is clearer for governments and trade bodies to adopt digital trade initiatives. 

The United Kingdom, France, Germany, United States, Bahrain, Paraguay, Belize, Thailand and the Abu Dhabi Global Market have passed MLETR legislation. 

Now, it’s time for others to follow suit with the harmonisation of these 36 key trade documents.

Pamela Mar, Managing Director of ICC DSI, said, “Alignment of data and standards is a prerequisite to a more harmonised, connected digital trade ecosystem. This work– which really is the work of over 50 organisations active in trade standards – is a foundational step. We now need to see widespread adoption as a way to simplify and speed all trade processes, and that’s going to be a target moving forward.”

The full KTDDE report can be downloaded here. 

Final 15 key trade documents definitions 

Administrative Documents used in the Excise Movement Control System (ECMS): “The Administrative Documents in the Excise Movement Control System (EMCS) within the EU, including the Electronic Accompanying Document (eAD) and Simplified Accompanying Document (SAD), are at an advanced stage of digitalisation”.

Advance Ruling Application: “Advance Ruling Applications are in a transitioning stage towards digitalisation, with several WCO members implementing digital solutions. The application’s main purpose is to provide an assessment of classification, origin, or customs value before an import or export transaction”.

ATA Carnet: “The ATA Carnet is in an advanced stage of digitalisation. Its system infrastructure facilitates efficient management of temporary duty-free and tax-free importation of goods”.

Certificate of Inspection for Organic Products: “The CIO is mandatory for certifying organic products, ensuring compliance with specific organic standards of importing and exporting countries. The CIO is transitioning towards digitalisation, with both paper and digital forms currently in use”.

CITES Permit/Certificate: “The CITES Permits or Certificates process has made significant progress towards digitalisation with the introduction of the CITES electronic Permit system”.

CODEX Generic Model Official Certificate: “Food products certificates are a legal requirement in international food trade for the attestation of food safety and fair-trade practices. So far, there is limited use of certificates that are electronically issued and exchanged”.

Consignment Security Declaration: “The Consignment Security Declaration (CSD), developed by ICAO, plays a vital role in ensuring air cargo and mail security throughout the supply chain. It serves as a tool for verifying the regulatory requirement that cargo has undergone appropriate security controls and been issued with a security status”.

Dangerous Goods Declaration: “Dangerous Goods Declaration (DGD) is moving towards digital adaptation, particularly in air transport, as seen in initiatives like IATA e-DGD. However, the current diversity of dangerous goods forms across different modes of transport adds to the complexity of the transition”.

Excise Guarantee: “The Excise Guarantee, essential for securing payment of duties on excisable goods, is in the early stages of digitalisation. Typically issued by exporters/importers to government agencies, and often involving financial institutions, these guarantees are legally mandated in many countries”.

International Veterinary Certificate: “The use of veterinary certificates for international trade in live animals, hatching eggs, products of animal origin, and more has become a legal requirement to ensure that animal health requirements are fulfilled by those exporting these commodities”.

Non-preferential Certificate of Origin: “Non-preferential Certificates of Origin (CoO) are at an intermediate stage of digitalisation. While the layout is mostly standardised, the transition to digital formats is ongoing, with varying degrees of adoption across different countries”.

Phytosanitary Certificate: “The use of ePhyto electronic phytosanitary certificates for international trade in products of plant and forest origin, propagation material and seeds is a legal requirement under the International Plant Protection Convention (IPPC) to ensure that exported products meet plant health and food safety requirements”.

Preferential Certificate of Origin: “The digitalisation of Preferential Certificates of Origin (PCoO) faces challenges due to the complex legal framework of Free Trade Agreements (FTAs), differing standards, and the trend towards self-certification”.

TIR Carnet: “The TIR Carnet, under the TIR Convention, is in a moderately advanced stage of digitalisation. It operates under a well-established international system, allowing goods to travel across borders with minimal customs interference”.

Transit Accompanying Document: “The Transit Accompanying Document (TAD) in Union Transit (UT) and Common Transit—a mandatory document for goods in transit within the EU and in Common Transit countries, typically accompanied by a guarantee letter—is at a high stage of digitalisation”.

Industry analysis and recommendations 

The ICC DSI and its industry partners have identified four key factors that are essential for the next steps of trade digitalisation.

1. Standardisation of electronic documentation
2. Legislative and regulatory support
3. Industry convergence and engagement
4. Adoption at scale

Without these four steps mentioned above, widespread digitalisation is unlikely to occur. While harmonising the 36 key documents is a crucial first step, it cannot be done in a vacuum. Further industry collaboration is needed, otherwise progress will once again stall on the digital innovation front.

However, the ICC DSI has recommendations for realistic next steps to ensure that the industry successfully capitalises on the current progress. 

1. Active participation in digital infrastructure: In order for true interoperability, all actors in the international trade space must participate in the development and fine tuning of digital infrastructure. 
2. Streamlining data exchange with global data standards: Using the best practices for Key Data Elements, outlined in the KTDDE Glossary, it can help leverage standardisation to ensure data exchanges are uniform across borders.
3. Addressing digital identity challenges: Standards like ISO 17442, ISO/IEC 15459 and the ISO Technical Report ISO/TR 6039:2023 already exist, and if used properly, can help with legal identification. 
4. Regulator collaboration and uniform rules for digital information sharing: Governments and regulatory bodies across the world need to collaborate to share best practices and help establish forward-looking frameworks for digital trade.
5. Digital-first strategy and ecosystem-wide engagement: Not all trade players will be at the same digital development point. Many smaller businesses will need more help advancing digitalisation. The important point is advancing a digital-first ecosystem, where all stakeholders contribute to the transition, regardless of individual standing.

The final ICC DSI KTDDE report on all 36 Key Document and Data Elements is a clear step forward for the international trade community. Without establishing a baseline of knowledge and harmonisation, it would be impossible to take significant steps forward.

But the job does not stop here. The ICC DSI gave clear recommendations and analysis of what needs to happen next in order to truly take advantage of the current digitalisation momentum. 

The KTDDE report has done its job, now, it is on the industry to run with it.

In an era where environmental concerns are at the forefront of global discussions, the maritime industry, often seen as a major contributor to pollution, is under increasing pressure to adopt sustainable practices.

With approximately 90% of global trade relying on maritime transport, finding ways to mitigate the environmental impact of shipping has become imperative. Fortunately, innovative approaches are emerging, offering hope for a more sustainable future in the shipping industry. 

The shipping industry is actively steering toward sustainability, addressing environmental challenges and striving for a greener future.

Decarbonising international shipping is a critical endeavour to decrease the industry’s impact on the environment.

There are various challenges and costs that decarbonising shipping requires, which are a shift in technology by adapting low and zero GHG fuels, including operational changes to enhance efficiency and investments for ship design adjustments, alternative fuel production, and green onboard technologies. 

These changes may lead to increased maritime logistics costs, shipping rates, and voyage times. There have been global collaborations as shipping operators work across borders, making uniform enforcement of new IMO rules crucial. To be successful, transition costs must be lowered to support vulnerable economies.

Carrier strategies for decarbonisation

Decarbonisation is becoming a strategic imperative for companies across the shipping carriers. Some compelling reasons why businesses are actively pursuing decarbonisation:

Reduction of energy consumption:

Speed reduction: Slowing down vessels can significantly reduce energy consumption and emissions.

Air lubrication: Innovative hull designs that create air bubbles reduce friction, leading to fuel savings.

Alternative fuels:

Low-carbon fuels: Transitioning from traditional fossil fuels to cleaner alternatives is a key focus in sustainable shipping. Biofuels, hydrogen, and ammonia are being explored as viable alternatives to reduce emissions. LNG (liquefied natural gas) is gaining traction as a transitional fuel, offering lower emissions compared to conventional marine fuels.

Carbon-free fuels: Hydrogen and ammonia are promising candidates for a zero-emission future.

Carbon capture:

Developing technologies to capture and store carbon dioxide emitted during shipping operations.

When combined, these methods contribute to a more sustainable and environmentally friendly shipping industry. By embracing these strategies, carriers can play a pivotal role in achieving global decarbonisation goals. 

Electrification and hybridisation

Electric propulsion systems and hybrid solutions are being developed to minimise emissions from vessels. Battery-powered ships and hybrid propulsion systems combine conventional engines with batteries or fuel cells, enabling more efficient energy usage and reducing greenhouse gas emissions.

Wind-assisted propulsion

Reviving ancient practices, modern shipping is rediscovering the benefits of wind-assisted propulsion. Technologies such as sails, kite propulsion, and rotor sails harness wind energy to supplement engine power, thereby reducing fuel consumption and emissions.

Digitalisation and smart shipping

Digital technologies, including artificial intelligence (AI), blockchain, and IoT (Internet of Things), are revolutionising the maritime sector. Smart shipping solutions optimise vessel operations, route planning, and cargo management, resulting in fuel savings, emissions reductions, and improved safety.

The transition towards sustainability in shipping is a complex but necessary endeavour. By embracing technological innovations, regulatory frameworks, and collaborative efforts, the maritime industry can mitigate its environmental impact while continuing to support global trade and economic growth.

However, achieving a truly sustainable shipping sector requires collective commitment and ongoing investment in research, development, and infrastructure. With concerted efforts from all stakeholders, the vision of a cleaner, greener maritime future can be realised, ensuring a healthier planet for generations to come.

Pacific International Lines (PIL) has become a member of the non-profit organisation, Digital Container Shipping Association (DCSA), to promote standardisation and digital innovation in the container shipping industry.

DCSA’s founding members include 9 of the 10 largest container shipping companies globally, covering about 70% of the world’s container trade. The association was established to speed up digitalisation through the standardisation and harmonisation of data standards, aiming to create an interoperable framework that reduces friction, cost and improves the customer experience.

PIL and DCSA will work together on the development, alignment, and validation of digitalisation standards to boost adoption across the industry.

DCSA standards seek to meet requirements such as paperless trade, cargo visibility, port call optimisation, and equipment management. Having uniform and interoperable data standards and legal conditions across international jurisdictions and platforms will greatly improve delivery schedules. They will also enhance communication and transactions among regulators, banks, insurers, carriers, customers, and stakeholders involved in international trade.

PIL has initiated several digitalisation projects, including implementing an electronic bill of lading (eBL) to shorten delivery times, enhance operational efficiency, and provide customers with a seamless experience. 

An eBL facilitates easier document creation, approval, distribution, and tracking, while reducing potential fraud and removing the risk of losing paper documents during transit.

Mr Lars Kastrup, CEO of PIL, said, “PIL has been actively undertaking digitalisation initiatives and we are pleased to join DCSA to accelerate our journey while growing the industry’s digitalisation capabilities. Digitalisation not only increases efficiency and reduces costs, it also cuts down on our carbon footprint and simplifies transactions for all stakeholders.”

“Complementing our participation in DCSA, PIL has also been working to incorporate standardisation and governance in our data and processes to enhance the way we work and optimise efficiency. For digitalisation to succeed, we need to work together for industry-wide adoption. These comprehensive digital capabilities will help equip international shipping to be more sustainable and future-ready.”

Mr Thomas Bagge, CEO of DCSA, said, “We are thrilled to welcome PIL to DCSA. As we continue our collaboration with industry partners to advance the digitalisation of the container shipping industry, PIL’s participation represents another significant milestone.

“Over the past five years, DCSA and its members have created a digital foundation that allows for the industry to improve the customer experience, reduce cost and help the industry shift towards a more sustainable future.

“We are looking forward to continuing our work with PIL and our other partners to help realise our vision of a fully digitised supply chain.”

DCSA aims to promote sustainability practices, foster interoperability and efficiency across the industry, enhance customer experiences, and unlock valuable insights from data. The goal of DCSA is to achieve this by producing standards that benefit all parties involved in international trade and to secure the broadest adoption of these standards.

Shifting from the transfer of physical paper bills of lading could save $6.5 billion in direct costs for stakeholders, enable $30-40 billion in annual global trade growth and ensure the long-term sustainability of international trade.

In the latest report on “Global Trade Outlook and Statistics” released by the World Trade Organisation (WTO), economists have shared a cautiously optimistic view of the global trade landscape. 

According to the report, inflationary pressures, which have been a significant concern in recent times, are anticipated to ease this year. This alleviation is expected to allow for the growth of real incomes, particularly in more advanced economies, thereby potentially increasing the consumption of manufactured goods. 

An evident recovery in the demand for tradable goods is already observable in 2024, with indices of new export orders signalling improving trade conditions at the year’s commencement.

WTO Director-General Ngozi Okonjo-Iweala said, “We are making progress towards global trade recovery, thanks to resilient supply chains and a solid multilateral trading framework — which are vital for improving livelihoods and welfare. It’s imperative that we mitigate risks like geopolitical strife and trade fragmentation to maintain economic growth and stability.”

The report also highlights some of the ongoing challenges in the global trade sector. High energy prices and persistent inflation have adversely impacted the demand for manufactured goods, leading to a 1.2% drop in the volume of world merchandise trade for 2023. 

This decline is more pronounced in value terms, with merchandise exports decreasing by 5% to $24.01 trillion. However, the trade scenario appears more positive on the services side, with a 9% increase in commercial services exports to $7.54 trillion, partially counterbalancing the decline in goods trade.

Despite these challenges, world trade levels remained robust throughout 2023, staying well above pre-pandemic figures. By the fourth quarter, trade was nearly unchanged compared to the same period in 2022 and had risen slightly when compared to 2021.

The report also delves into the global economic growth forecasts, estimating that global GDP growth at market exchange rates will hover around 2.6% in 2024 and 2.7% in 2025, marking a slight deceleration from 3.1% in 2022 to 2.7% in 2023. 

The discrepancy between steady real GDP growth and the slowdown in real merchandise trade volume can be attributed to inflationary pressures negatively impacting the consumption of trade-intensive goods, especially in Europe and North America.

A special analytical section of the report addresses the potential impact of geopolitical tensions on trade, particularly highlighting the Red Sea crisis. While the Suez Canal disruptions stemming from the Middle East conflict have had a relatively limited economic impact thus far, sectors such as automotive products, fertilisers, and retail have felt the pinch due to delays and increased freight costs.

The report further explores the nuanced effects of geopolitical tensions on trade patterns, noting a marginal impact but no significant trend towards de-globalisation. It mentions the bilateral trade dynamics between the United States and China and observes emerging signs of fragmentation in services trade, particularly in information, computer, and telecommunications (ICT) services.

WTO Chief Economist Ralph Ossa said, “Some governments have become more sceptical about the benefits of trade and have taken steps aimed at re-shoring production and shifting trade towards friendly nations. The resilience of trade is also being tested by disruptions on two of the world’s main shipping routes: the Panama Canal, which is affected by freshwater shortages, and the diversion of traffic away from the Red Sea. Under these conditions of sustained disruptions, geopolitical tensions, and policy uncertainty, risks to the trade outlook are tilted to the downside.”

The report provides an optimistic view for certain regions, predicting that Africa’s exports will see the fastest growth in 2024, albeit from a low base. Other regions, such as the CIS, North America, the Middle East, and Asia, are also expected to witness moderate growth in exports. However, European exports might lag behind, reflecting slower growth.

The report offers a mixed outlook for global trade, with signs of recovery and growth amidst prevailing challenges and uncertainties. The full report, including detailed data and analyses, is available through the WTO’s publication platforms.

Enigio has announced that the International Group of P&I Clubs (IG P&I) has approved trace:original, facilitating the issuance of electronic bills of lading by carriers and freight forwarders. These documents are now accessible beyond closed systems, reaching every participant in the trading sequence.

This endorsement by IG P&I marks a considerable stride towards establishing a trade document environment that is both open and adaptable, further allowing for the insurability of trace:original electronic bills of lading (eBLs).

Towards an adaptable trade document environment

Given the unique nature of each trade transaction, documentation must be versatile enough to meet a diverse array of requirements for consistent utility. Central to trace:original is the concept of document-centric trade, where each document, containing all the necessary data and assets, is freely transferable, avoiding reliance on a centralised database. 

This approach empowers users to manage their data and digital assets according to their preferences and requirements.

Furthermore, trace:original ensures that the specifics of each transaction are embedded within the document itself, moving away from a one-size-fits-all central rulebook. Enhancing interoperability, trace:original is compatible with any document standard, including ICC DSI, FIATA eFBL, BIMCO eBL, and DCSA B/L.

Enhancing accessibility within the trade document ecosystem

The vision for a fully digitalised trade document chain is predicated on the principle of universal access to necessary documents for all chain participants. trace:original documents are designed to be freely transferable, allowing free transfer to any party without necessitating any form of onboarding or subscription by the recipient.

These digital trade documents can be circulated as required until the transaction reaches completion, embodying a ‘pay once, use indefinitely’ model.

Patrik Zekkar, CEO of Enigio, said, “Trade documents confined to closed networks have limited reach. With this understanding, we developed trace:original to foster an open ecosystem where documents are freely movable within and across platforms without the prerequisite of platform dependency. This system is designed to be lightweight and open, facilitating integration into existing system infrastructures through simple API connections, whether as a standalone solution or as an integrated component.”

Customer expectations are higher now than ever before.

For many firms, mastering the intricacies of supply chain management can be the difference between thriving and being left behind by the competition. 

One strategy that has revolutionised this field is Just-in-Time (JIT) delivery. 

Rooted in Japanese manufacturing practices and widely popularised by its successful implementation by Toyota in the 1970s, JIT is more than just a logistics strategy; it’s a philosophy that intertwines efficiency, quality management, and continuous improvement. 

This post delves into the various facets of JIT delivery, exploring its definition, impact on suppliers, benefits to manufacturers, and the pivotal role of purchasing departments in its implementation. 

What is Just-in-Time delivery?

JIT delivery is a supply chain management strategy aimed at reducing inventory costs and improving efficiency. 

Its core idea is to align raw material orders from suppliers directly with production schedules. Companies employing JIT strategies typically order smaller quantities of materials to be delivered right before they are needed in the production process rather than maintaining extensive, costly inventories.

By minimising inventory levels, companies can reduce the costs of storing, managing, and insuring inventory and also reduce waste by preventing overproduction and excess inventory. 

However, JIT delivery requires precise coordination and strong relationships with suppliers. It can be vulnerable to disruptions in the supply chain, such as delays in supplier deliveries or sudden changes in customer demand, as was experienced during the COVID-19 pandemic. 

Successful implementation of JIT delivery involves meticulous planning and often requires a cultural shift within the organisation to embrace flexibility, quality management, and continuous improvement.

Does Just-in-Time delivery benefit suppliers?

JIT delivery presents a mix of benefits and challenges for suppliers. 

On the positive side, this method can forge more robust and collaborative relationships between suppliers and buyers since suppliers must become more integrated into the production schedules of their clients, often leading to a more stable and predictable business environment.

For example, suppliers can use real-time tracking tools to monitor the progress of customer orders and adjust their own production schedules accordingly. 

Suppliers can then plan their production and inventory management more effectively with better visibility into their customers’ needs, ensuring their deliveries align closely with real-time demand. 

Additionally, the JIT philosophy, which emphasises efficiency and minimising waste, can encourage suppliers to streamline their processes. This pursuit of continuous improvement often leads to more efficient operations and innovations in managing production and delivery schedules.

However, these advantages are balanced by notable challenges. 

The JIT system requires suppliers to be highly flexible and responsive to changes in demand, which can sometimes strain resources and require a more adaptive production process. 

Moreover, the emphasis on timely deliveries places significant pressure on suppliers, as any delay can have a ripple effect throughout the supply chain, potentially leading to strained relationships and financial penalties.  

For instance, if a supplier is unable to meet a deadline due to unforeseen circumstances, it may be required to pay for expedited delivery to ensure that the customer is not affected, even though such costs may be unexpected and unplanned.

Another consideration is that JIT typically involves smaller, more frequent orders rather than large bulk purchases. While this can aid in reducing inventory costs, it might also lead to increased transportation costs and lower economies of scale.

What benefits do the manufacturers receive from JIT delivery?

JIT delivery offers several significant benefits to manufacturers, fundamentally reshaping how they manage their production and inventory.

Firstly, JIT significantly reduces inventory costs. By receiving goods only as needed in the production process, manufacturers can minimise the capital tied up in stock, leading to lower storage and insurance costs, as well as decreased risk of inventory obsolescence.

Such a lean approach to manufacturing also encourages a smoother production flow, with less clutter and fewer delays caused by excess inventory, often resulting in shorter lead times and faster turnaround times, which can be a crucial competitive advantage.

However, it’s important to note that these benefits require a highly coordinated supply chain, reliable suppliers, and a relatively stable economic environment. 

Many of the pandemic-era supply chain disruptions stemmed from overly optimised supply chains. For instance, many companies had to reduce or completely suspend their production due to shortages of key components, which could have been mitigated if they had contingency plans in place to ensure the availability of backup sources.

Manufacturers must invest in building strong relationships with their suppliers and often need to adapt their internal processes to fully realise the advantages of JIT delivery.

What can purchasing do to implement JIT deliveries?

As their decisions directly impact inventory levels and production efficiency, purchasing departments play a crucial role in the successful adoption of JIT, something that will require a strategic shift in purchasing practices. 

To start, purchasing needs to develop a deep understanding of the production process. This involves close coordination with the manufacturing team to determine the precise materials needed and the timing of their requirement. Without precise coordination, the overall picture will not come together.

The next step is building solid relationships with suppliers. This needs to go beyond standard supplier relationships and often involves collaborating with suppliers to improve their understanding of the company’s production needs and schedules. In some cases, suppliers may even need to be located nearby or have the ability to deliver quickly to meet the JIT requirements.

Investing in technology can be a game-changer. Advanced forecasting and inventory management systems can provide real-time data, improving the accuracy of order quantities and timing. These technologies enable purchasing departments to make informed decisions based on current production needs and market trends.

Finally, behind any successful JIT delivery scheme, there must be a culture of continuous improvement where employees and leadership are open to reviewing and adjusting strategies as needed

Implementing JIT deliveries is a comprehensive process that requires purchasing to align closely with production needs, build strong supplier relationships, embrace flexibility, leverage technology, and continually seek improvements. 

Having been exposed to a wide range of shipping documents and Incoterms over the past decade, I have reflected on some of the best practices and crucial elements that should consistently be followed for trouble-free import and export processes. 

Although we are moving towards the digitalisation of customs and paperless trade, the transfer of essential shipping information remains a necessity. This can be achieved through various means such as electronic data interchange (EDI), advance shipment notifications (ASN), emailing PDFs, or attaching physical copies of documents to parcels, among other methods.

Sometimes certain discrepancies can be noticed when dealing with various shipping documents and one of the most common mistakes is applying the incorrect Incoterm. 

Currently, it is mandatory to state Incoterms in the UK’s import declarations. This requirement stems from the transition from the old UK customs system, CHIEF, to the new Customs Declaration Service (CDS), along with the introduction of new demands.

The newest version of Incoterms was released in 2020 and these are governed and revised every 10 years by the International Chamber of Commerce. Although not mandatory to be stated in the shipping paperwork, once they are agreed upon and used – the Incoterms become legally binding. 

Numerous trade and customs-related institutions, organisations, and private companies offer training in Incoterms. Understanding these terms helps clarify the rules and obligations between sellers and buyers. It also instils confidence in situations such as resolving insurance claims if any issues arise with the goods during transport.

While many companies adhere to commercial practices and may not always exercise or seek their rights under a specific Incoterms rule, often depending on customer relationships, it’s important to note that Incoterms also determine the allocation of risks and costs. Therefore, it is crucial for businesses to at least understand the Incoterms that are relevant to their operations and when trading goods.

There are advantages and disadvantages of various Incoterms, we’ll focus on the EXW (Ex-Works) Incoterm, what its misuse can lead to, what are the risks and propose a different Incoterm that could be more suitable in various scenarios.  

What is Ex Works (EXW)?

According to ICC’s Incoterms ® 2020, EXW places maximum responsibility, risks and costs on the buyer which is visualised in the ICC’s practical wallchart (that can be downloaded for free here)

1.  Under EXW, at the named place, the exporter of record makes the goods available for collection. In many companies, this is quite impractical (causing EXW to often be misused). Typically, a vehicle arrives at the exporter’s (named) premises and the goods are loaded by the exporter’s forklift driver. However, under EXW (Ex Works) terms, this shouldn’t occur. Instead, the buyer’s transport company should arrange for a vehicle equipped with a tail lift or a Moffett, which tends to be more expensive. Upon arrival, the driver of this vehicle is responsible for loading the goods. Numerous companies consider it impractical, and misunderstandings often arise about the obligations of each party, particularly when loading heavy goods. This involves not only arranging special equipment but also conducting risk assessments and method statements properly. Effective communication and preparation among all parties involved, including the seller, transport company, health and safety personnel, buyer, and others, are essential.

2. Under EXW, sellers/exporters are not obliged to raise an export declaration and apply for any export licenses (if goods are subject to export controls). From the importer’s (buyer) perspective, this would also be very troublesome, as it is the seller who has the most knowledge about the product it sells/exports. The buyer might not be aware of the technical specifications and may not have access to any technical drawings, which are necessary for: 

1. Accurately classifying goods under the Harmonized Tariff Schedule (HTS) and Applying for an export license 

However, what often happens, in order to accommodate for the customer (buyer), the exporter arranges transport and/or an export declaration, which is not in accordance with rules under this Incoterm. 

Legal obligations and proof of export under EXW and FCA

One of the most crucial aspects to consider is the legal obligation pertaining to the proof of export evidence. Under EXW, it’s the buyer’s (importer’s) responsibility to arrange for an export declaration, however, the buyer may not provide a copy of it, as it is not obliged to do so.

This poses a problem for the seller (exporter), as the exporter is then unable to prove to the authorities the goods left the country (were exported). The seller may lack complete knowledge about the goods’ final destination if they are diverted elsewhere, as the seller is not responsible for arranging the transport. 

Typically, the exporter’s commercial invoice would be zero VAT rated. Strictly speaking, in order to legally apply zero VAT to the invoice, there should be evidence of goods being exported. In the case of a lack of proof of export, authorities have every right to demand the VAT to be paid back by the seller (exporter). 

What is the best Incoterm for an export declaration?

The safest Incoterm to adopt when the exporter is responsible for arranging the export declaration and is loading the goods upon the vehicle’s arrival is FCA (Free Carrier).

Under FCA these activities are the responsibility of the seller, therefore my recommendation would be to use FCA instead of EXW (e.g. FCA Company XYZ, Bristol, UK, Incoterms 2020) and ensure the FCA Incoterms are stated clearly on the shipping documents or correctly transferred by electronic means.

Although EXW Incoterm was slightly revised in 2020 version (as opposed to 2010 version) to tackle the issue of sea transportation and Bill of Lading’s transfer (and article A6/B6 explains this change in more detail), ICC’s Publication No. 723E explains that businesses should make careful considerations, before using EXW for domestic sales.

For the above reasons, I strongly urge traders to think about the EXW implications and consider using FCA Incoterm instead. 

A prolonged drought beginning last year has led to a 36% reduction in ship crossings at the Panama Canal, a crucial global trade passage.

Panama’s authorities announced on Wednesday that the new restrictions are likely to have a more substantial economic impact than initially anticipated.

According to Panama Canal Administrator Ricaurte Vásquez, the canal could suffer a financial loss between $500 million and $700 million in 2024 due to lower water levels. This figure is markedly higher than the earlier estimate of $200 million.

The intense drought in Central America has disrupted operations along the 50-mile (80-kilometre) waterway, leading to a backlog of ships and casting doubt on the canal’s dependability for global shipping. The situation raises concerns about its impact on international trade.

“It’s vital that the country sends a message that we’re going to take this on and find a solution to this water problem,” Vásquez stated.

This disruption coincides with a critical period. Hostilities involving Yemen’s Houthi rebels in the Red Sea have forced ships to avoid this key route for consumer goods and energy supplies, exacerbating the situation.

The combined effect of these events is causing delays in shipments and increased transportation costs globally. Analysts note that companies considering rerouting via the Red Sea, a major passage between Asia and Europe, to bypass Panama Canal delays now face limited options.

On Wednesday, Vásquez announced a reduction in daily ship crossings to 24 from the usual 38. He also noted a 20% decline in cargo and a decrease of 791 ships compared to the same period last year in the first quarter of the fiscal year.

Vásquez acknowledged the noticeable reduction for Panama but mentioned that improved water management and increased rainfall in November have maintained adequate water levels for 24 ships to pass daily until the end of April, the onset of the rainy season.

The drought is attributed to the El Niño weather pattern and climate change. Canal authorities emphasise the urgency for Panama to find new water sources for both the canal and human consumption. The lakes supplying the canal also provide water to over half of Panama’s population of more than 4 million.

“The water problem is a national problem, not just of the Canal,” Vásquez commented. “We have to address this issue across the entire country.”