Frictionless Trade: How New Technology Will Power International Trade

Johnny Hugill

25 October 2018

Johnny Hugill introduces PUBLIC’s latest report Frictionless Trade and outlines how new technologies have the potential to transform how the UK conducts trade with other nations, and why this is more important than ever for its future as an international trading partner after Brexit.

There has never been more public and political interest in this country surrounding international trade. Although the outcome of the UK-EU trading relationship after Brexit is still far from clear, it has been widely reported that a disruption to the status quo, especially the UK’s withdrawal from the Customs Union, risks creating major bottlenecks at our ports and borders.

The latest port freight statistics from the Department for Transport, for instance, suggest that if the UK leaves the EU with no streamlined trade arrangements put in place, 14 million vehicles per year will become subject to customs and immigration checks: a situation that many commentators have claimed will amount to a national crisis.

Technology could be crucial to overcoming these problems. Around the world, new and innovative uses of technology have been applied to solve major logistical challenges just like these, helping to deliver the secure and efficient flow of goods and information between multiple trading stakeholders. From Antwerp to Rotterdam, to Dubai, to Singapore, technology is shaping how international ports and borders conduct their business.

The ambitions of this report, however, go beyond providing solutions to the specific and narrow technical challenges that might arise from the UK’s withdrawal from the European Union. Rather, it demonstrates that – across the entire supply chain – established and emerging digital technologies have the potential to absolutely transform how the entire sector functions.

International examples abound, a brief review of high-tech initiatives in this sector shows the potential for new technologies and data-driven platforms:

First, to maximise the efficiency of ships coming in and out of ports, visualised port-call optimisation platforms can help port operators to better manage ships, cutting time and money wasted for ships currently forced to sit idle until they can come into port. One such platform, co-developed by Dutch startup Teqplay and the Port of Rotterdam, has allowed vessel operators to cut waiting times at the port by up to 20%.

Once ships are in port, autonomous, unmanned gantry cranes are now capable of handling and discharging cargo, with some systems capable of handling 2.35 million containers each year. A smart IoT network at the Port of Valencia includes 200 cranes straddle carriers, trucks, and forklifts in the terminal, collecting information on location,  status of operations, and energy consumption.

For the problem of monitoring people crossing the border, 3D biometric recognition systems offer a solution. This could allow people to cross borders and have their identity automatically verified via a network of cameras connected to an app on their smartphone, without having to undergo passport checks at the border. Australian airline Qantas recently announced that it was implementing a similar facial recognition trial for international passengers at Sydney Airport.

Finally, Israeli startup AiDock has shown real promise in cracking the widely discussed customs problem. A graduate of world-leading maritime innovation hub theDock, the startup has developed an automated customs clearance platform that reduces the admin burden on freight forwarders and speeds up the customs process. AiDock’s system uses artificial intelligence to process and analyse all of the import documents required and generates customs clearance files automatically.

Two things stand out about these initiatives. First, they have all been delivered by government support and investment, and sustained by deep relationships between the public and private sectors. This is why we recommend that the UK government takes the initiative and invests in building the country’s  first ‘Smart Port’ initiative, inspired by the success of similar ventures in Rotterdam and Hamburg.

Second, startups and SMEs have made a significant contribution to the innovation landscape. This is hardly surprising: given the complexity of the trade sector, and the number of different interactions involved in the trading processes, startups with niche but deep expertise in one of these areas can have an enormous impact.

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In our report, we showcase the 65 leading TradeTech startups from around the world: almost all of them do something different, but they all offer considerable value to shippers, freight forwarders, port operators, border agencies, and governments.

At this inflexion point in the UK’s international trading landscape, technology – especially new trade startups – has the potential help the UK to establish itself as a high-tech trading hub. Whatever the outcome of Brexit, we must seize this opportunity – or risk failing to keep up with the pace of innovation in borders and ports across the world.

PUBLIC’s report, Frictionless Trade, is out now. Read the full report here.

Join us at The GovTechSummit in Paris on 12 November 2018 to bring entrepreneurs to the public sector!

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