The success of recent interoperability trials between two different electronic bills of lading (eBL) platforms, edoxOnline and CargoX, underscores advances made by the trade finance community. With Swift as a connecting network, these trials help accelerate digital trade. Avanee Gokhale, global lead for trade strategy at Swift, highlights that digital trade will drive unprecedented operational efficiencies. Specifically, businesses will benefit from reduced manual data entry, data-led reporting, and improved fraud mitigation.
Economic Impact of Trade Digitisation
According to the International Chamber of Commerce (ICC) and the Boston Consulting Group, trade digitisation could boost trade revenues by up to 20 per cent. Furthermore, it can cut processing times by 60 per cent and save global trade banks up to US$6bn annually. McKinsey also estimates that the scaled use of eBL could unlock an additional US$40bn in global trade.
Connecting Digital Islands Through Swift
Swift aims to deliver instant and frictionless cross-border transactions by ensuring interoperability between emerging platforms. Currently, many platforms risk becoming unconnected “digital islands.” Therefore, Swift explores how to interlink central bank digital currencies (CBDCs) and enable interoperability between multiple tokenised asset platforms. In a new set of interoperability trials, the organisation is driving the adoption of digital trade solutions worldwide.
The Role of eBL in Modern Trade
An eBL is a digital version of a document used in transporting goods by sea, air, or land. It contains the same information as a paper document, including details about the shipper, the consignee, and the goods. Because ocean carriers issue around 45 to 50 million bills of lading per year, the industry must work together to digitise trade. For instance, the Digital Container Shipping Association (DSCA) committed to issuing 100 per cent of bills of lading digitally for container shipping.
Overcoming Technical Challenges
Today, efficient transactions require all stakeholders to use the same platform. However, there are currently ten authorised eBL platforms that are not connected. This lack of integration forces parties to sign up for multiple providers, which is time consuming and costly. To solve this, Swift is working with the FIT Alliance and eBL platform providers to develop an interoperable model. This solution uses APIs to pass data between different platforms, meaning customers only need to sign up for one provider.
Success in Interoperability Trials and Future Steps
In recent months, Swift developed a proof of concept using an Electronic Transport Document API. A series of interoperability trials were conducted in early 2023 to understand the potential of the solution. This stage validates the solution with authorised eBL platform providers and banks. Furthermore, the industry is consulting on a supporting legal interoperability framework. These steps make supply chain processes more transparent, efficient, and reliable for everyone involved.
Courtesy: gtreview.com
