Estimated reading time: 6 minutes

Nowadays, we take shipping and container shipping’s rich history and significance in global trade for granted. The most counterintuitive learning for me at Global Shipping Business Network (GSBN) was that moving goods in containers across the seas is relatively easy, but moving data across the supply chain is incredibly hard even in this modern era. 

The most counterintuitive learning for me at Global Shipping Business Network (GSBN) was that moving goods in containers across the seas is relatively easy, but moving data across the supply chain is incredibly hard even in this modern era. 

Indeed, containers simplify the handoffs of goods between various intermediaries involved in trade, enabling efficient and cost-effective global movement of goods. The same cannot be said for documents or data related to a shipment.

However, the game is changing. Global trade has entered a tumultuous new era: Trade 3.0.

This era is characterised by increased complexity and uncertainty, driven by geopolitical considerations, e-commerce, and stricter regulations. There is little room to further optimise the physical movement of goods to address these challenges. Instead, we must turn to the digital realm for efficiency and resiliency by enhancing coordination across the supply chain to handle this complexity. At stake is the very fabric of global trade, the lifeblood of nations.

Trade 3.0

Trade 3.0 is already here.

Historically, from barter to mercantilism, trade has experienced remarkable growth, punctuated by pivotal trade innovations such as money, bills of lading, and letters of credit. In the era of Trade 1.0, the physical constraint of moving goods piecemeal posed a significant challenge. The advent of containers marked the birth of Trade 2.0. Goods could now be seamlessly transferred in 20-foot-long metal boxes between ships, trucks, and trains. This intermodal transportation system reduced logistics costs by more than 95%, lowering the barriers to international trade and substantially contributing to global economic growth.

However, over the past five years global trade has entered a new era. Supply chain professionals have been navigating through one crisis after another, from COVID-19 and the Red Sea crisis to the recent longshoremen strikes. Incoming tariffs and other trade barriers are also acting as catalysts for reshaping entire supply chains. In response to the unprecedented uncertainty they face, corporations are compelled to diversify their supplier base. If that wasn’t enough, regulators have simultaneously ratcheted up the burden on corporations to provide comprehensive audit trails of their supply chains. Welcome to Trade 3.0!

The Trade 3.0 era demands complex supply chains and fast-paced coordination of market participants across the world while maintaining resilience to disruptions without incurring excessive costs. Traditional optimisation strategies in the physical realm – such as using larger ships, automated terminals, or network redesigns – are no longer sufficient.

The only promising avenue left is digitalising the entire trade process itself by facilitating the coordination and data exchange between a group of diverse supply chain participants. To achieve this, a novel type of container, a “data container,” is required to facilitate these data handoffs.

eBL as “the” Data Container

There is substantial momentum behind the electronic Bill of Lading (eBL), including commitments from carriers, legal reform in key jurisdictions and even policy support in certain countries. Yet, if we were solely focused on digitising documents, we would be missing out on the greatest opportunity presented by the eBL adoption. Since each shipment is uniquely associated with its bill of lading, eBL could play the role of “data container” to digitalise the entire trade process.

Beyond being a mere PDF on a blockchain, an eBL requires three additional properties to become the “data container”.

• Firstly, eBLs should serve as the digital single source of truth for a shipment. It can be associated with all relevant data throughout the shipment’s international journey, including certificates of origin, packing lists, commercial invoices, insurance certificates, and visibility data.
• Secondly, eBLs currently function as digital tools to control and grant data access rights for every single shipment. In practice, data should only be written once from the source and shared multiple times. With clear access rights enforced by the eBL data for a single shipment that can be securely shared through a unique “data container” to all parties involved.
• Finally, eBLs provide an immutable and up-to-date timeline of the lifecycle of a shipment. They merge the physical supply chain, the financial supply chain, and the regulatory supply chain into a single timeline. Payment flows can be directly matched with the transfer of cargo rights, and customs and tax departments can verify the declarant’s role and the veracity of shipment information.

What is the value of a data container?

When Malcolm McLean introduced containerisation in 1956, it wasn’t immediately apparent the immense value it could create. The system’s development required numerous iterations, including the standardisation of containers, specialised container vessels, container terminals, truck chassis, and railcars for trains. It wasn’t until the system was fully in place that innovative customers realised its potential, capitalising upon the significant cost savings and competitive advantages it afforded.

Fortunately, data containers can benefit from the existing networks established by physical containers. But this also necessitates a shift in mindset. Today’s customers and carriers alike are looking at eBL as a mere replacement for paper documents. 

Recently, I had a lively debate with a leading carrier about the value created by eBL and the commercial model that a carrier should adopt. When pressed to demonstrate the business opportunities of eBL as a data container, I had to admit that I did not know which use cases would take off and the potential revenue a carrier could generate from eBL as a data container.

But this is no different from how the carrier should view a physical container. It was the customers and their network of trade partners who discovered a way to leverage physical containers to create value. The same will be true for data containers. There are many innovators out there, eager to use this new digital tool to create new value propositions for the customers. The focus should be on use cases that are either highly manual and costly today or entirely impossible due to the lack of data at scale.

Today, carriers are in the driving seat by selecting which eBL to offer to their customers and developing their commercial model for eBL. But ultimately it is the entire trade ecosystem that must determine how to effectively utilise the data container to create value for customers.

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The scope to squeeze additional optimisation in the physical world is narrowing. In this exciting era of Trade 3.0, resilience and optimisation will be achieved through the digitalisation of trade by facilitating the handoffs of data across the supply chain using a data container: the eBL.

Only by leveraging the data container can carriers, freight forwarders, agents, terminal operators, commercial banks, insurance companies, customs, and other stakeholders adapt and thrive in this new world.