This article was first published on IOTA - Medium
A large part of today’s trade is still based on paper documents and antiquated processes that slow down international trade and have a significant impact on the economy. Trucks and containers standing idle (and thus increasing CO2 emissions and pollution), cash flow tied up in goods at ports awaiting trade documents to be produced and lack of inventory visibility/status, are a few drawbacks (among many) of this disconnected system. Missing documents, inadequate global location tracking, and diluted or forfeited data, are all daily challenges facing this industry.
It is estimated that if all countries in the world increased their cross-border performance to only 50% of the world’s best, it could add 5% to global GDP. These are calculations not even including the effect of using DLT solutions across the full supply chain.
Global trade and supply chains are highly complex and involve many actors — both public and private. An enormous amount of data is produced along value chains but often only a fraction is captured and utilized. Information is often only shared peer-to-peer along the value chain as it is logged in different software systems and shared in paper copies. As a result, the original data is shortened, wrong, or misleading when reaching actors further down the chain. Rarely does the original packing list from the producer reach the Customs Authorities in an importing country. Thus making their risk assessment process slower and inaccurate.
THE SOLUTION IS INCREASING VISIBILITY & ACCESS TO ORIGINAL DATA
The promise of DLT is to set data free from proprietary actors’ systems and formats to be available on demand and in response to any event. Despite the increased sharing availability introduced by DLTs, data will still only be available to approved authorities or businesses. This would allow not only for efficiency gains, but also provide a broad range ...
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