Key developments in digital agri trade
A conversation with essDOCS, a provider of paperless global trade management solutions, on the rapid digitalisation of agri-commodities trade, accelerated by the coronavirus crisis yet set to permanently transform the way we work.
“The world is digitising at an unprecedented rate, and shipping and trade finance are now catching up with this global mega-trend” said Alex Goulandris, Co-Founder of essDOCS, adding that “according to the International Chamber of Commerce, the Covid pandemic has accelerated digital trade by 5-10 years.”
Today, the company operates an expansive digital trade network spanning over 58,000 companies, banks, logistics providers and 380 Chambers of Commerce. Its solutions are used globally to digitise warehoused commodities as well as bulker, tanker, breakbulk, container, barge and truck movements.
“Adoption and use of our two core digital platforms, CargoDocs and essCert, has been exponential in certain markets,” says Alex, adding that “the trade community’s drive to digital trade is increasingly catalysed by governmental activity, such as legislative reform to remove digital trade friction and recognise the validity of eDocs at the local law level, as well as with critical digital initiatives such as the IPPC ePhyto Hub.”
CargoDocs is a paperless global trade management solution which digitises and automates trade operations, finance, logistics, compliance and visibility, while essCert digitises certificates of origin plus other trade-related documents issued by Chambers of Commerce or other authorities.
Digital Trade uptake is soaring in certain areas
“Between January and April 2021, we saw a 639% increase in electronic CargoDocs bills of lading compared to the same period last year. We also saw a 45% increase in essCert electronic certificates of origin, where many Chambers of Commerce are now over 80% paperless.”
Digital Trade Finance
“On the trade finance side, we saw a 350% increase in documents electronically presented to banks. Bank branches using CargoDocs grew by 40%, and banks onboarded will soon exceed 50, as another wave of banking groups enter the final stages of go-live.”
essDOCS also has a number of partnerships which support Digital trade finance, allowing access to wider banking ecosystems.
Agri Digital Trade in Focus
“There are currently over 100 Agri houses using CargoDocs in North and South America, Europe, APAC and Australia. One key development in this space was the launch and rollout of the BDT (Barge Digital Transformation) platform, spearheaded by the US National Grain and Feed Association (NGFA), whose digital trade body (NGFDS) partnered with essDOCS to provide a solution digitising up to 100k negotiable barge bills of lading transacted in movements within US waterways annually.
This solution is now processing around 200 Barge eBoLs s daily, and that number will increase significantly as we enter peak season. BDT is a fantastic example of how industry stakeholders can come together and focus on transitioning their markets to digital trade, incrementally, but then swiftly.”
Significant Government & Regulatory Support for Digitalisation
Another key success in digital agri trade is the IPPC ePhyto Hub, which has seen major expansion in the past year. The Hub eradicates the need for each NPPO to build an interface to their 200 or so counterparties, instead creating a central Hub. Today, the platform connects over 90 countries, and as of end-March, was processing around 90,000 ePhytos per month.
Alex went on to provide other key developments illustrating the growing government support for trade digitisation, including Singapore’s recent enactment of the UNCITRAL Model Law on Electronic Transferable Records (MLETR), which effectively grants electronic BoLs the same legal status as paper BoLs. Abu Dhabi and Bahrain had already enacted MLETR and several other countries are in the process of updating local legislation. In India, the country’s Ministry of Shipping publicly requested that its authorities update their processes and regulations to enable widespread eDocs use, both as a final step in digitising import processes, but also to ensure business resilience and remote working.
More recently, the G7 signed the G7 Digital & Technology Ministerial Declaration, committing to passing laws that grant electronic instruments and documents the same legal validity as paper.
Digital Trade has seen explosive growth recently, with new initiatives, solutions, startups and industry consortia being announced at a phenomenal rate. As this market matures, essDOCS expects to see a number of failures, some pivots out of digital trade, plus an acceleration of acquisitions. An acceleration of partnerships and solution inter-operability are also expected, which will be key to delivering the promises of trade digitisation.
With regards to essDOCS itself, the company is starting its rollout of CargoDocs Express. “Express is a modular, app-based global trade management solution digitising all key post-trade processes,” said Alex. “It provides flexible options and packages to pick-and-choose Apps to support existing solutions and provide enhanced capabilities.
Apps will range from Deal, which will digitise post-trade confirmations and sales of goods contracts, to Transport Management, Document Management, including all export documents, LOIs etc, Finance Management, Compliance Management, including digital customs clearance, and internal and chain visibility for documents, payments, emissions and cargos. Most importantly, it is interoperable with our Classic solution, meaning existing users will not need to migrate to benefit from these new Apps.”