World Trade Organization (WTO) predict a moderate to strong growth in the coming years for Global trade. Global trade is subject to numerous controls and regulations. Importers & exporters need to comply with the regulations otherwise penalties, delays and additional costs are the consequence which leads to increase in overall logistics cost.
At times, though the Importers & exporters complies with all the regulations, they may still face with delays & unexpected costs on the shipments that could include customs exams, missing documents, damage, demurrage, per diem, detention for not providing right information etc. and other delays like strikes. Logistics companies who facilitate trade globally need better partnership with customs department of countries to get their cargo cleared on time. Post Covid-19, logistics companies may try to take advantage of the changing rules and regulations and engage in a global trade at a more beneficial partnership with different countries’ customs departments & government clearance agencies for smooth trading experience.
In Global trade countries have their own set of customs regulations. While basic laws are common across the globe, many laws are unique to each country. However, from a customs law’s perspective, countries in a specific geographic region have a higher amount of similarities. For example, countries in the Middle East, Europe etc., have similar customs laws.
Looking at recent global economic growth, companies are exploring more business opportunities overseas are also closely examining export policies and trying to mitigate risks involved. Today ‘The biggest challenge is keeping track of changing rules in global trade’ and this can be overcome by emerging technologies like Blockchain-based digitization. Global exporters are looking for the avenues to transform existing homegrown trade related software applications, integrated ERPs, spreadsheet-based record keeping manual process in the key trade operation areas like:
With digitization kicking in, Blockchain could open multiple opportunities to enhance the efficiency and positively impact major cost factors involved like Manual Processes, Non compliances incidents & penalties. Some of the immediate opportunities including automate manual activities e.g. product code matching, product classification, support functions improvements - duty minimization, export license management. Also, by implementing tamper proof decentralized and distributed digital transaction records like supply chain security & compliance programs will help develop trust in all the stakeholders and reduce penalty incidents significantly.
Global logistics companies from all segments including sea, land and other mode of transport started adopting digital transformation recently. As per latest analysists report global Blockchain technology market in logistics industry is expected to grow by $ 811.51 million during 2020-2024 progressing at a CAGR of 54%.
Our experience in working with multiple brokerage houses and trade authorities, coupled with our technology focused approach we believe that blockchain based solutions will help ease global trade in the next few years, find some examples below:
Wherever you are in your blockchain journey, T-Systems will meet you there and help take you where you want to go. Our holistic blockchain service offering can help you from the idea generation workshops, business case review, technical ‘proof-of-concept’ up to online bookable services. In blockchain we power higher performance from ideation to execution phase till final product implementation.
Since 2018, DATEV eG, Deutsche Telekom, Otto Group IT and the logistics service provider Hermes leveraging blockchain technology for an automating supply chain solution. The BIZZBLOXX project aims to enable medium-sized companies and their tax advisors to handle their e-commerce business on a decentralized platform environment - from contract initiation to shipping and the commercial aspects of the transaction. All individual steps are automatically documented in a tamper-proof manner.
