- The Covid-19 pandemic is speeding up a technological transformation of global trade as supply chains.
- Ship operators and importers to accelerate their investments in technology to smooth out kinks, reduce delays and ultimately cut costs.
- Manufacturers are going to deploy “internet of things” technology to, among other things, track inventory in real time and monitor equipment.
The Covid-19 pandemic is speeding up a technological transformation of global trade as supply chains play catchup in shifting from paper to digital transactions, says an article published on Bloomberg website.
Invest in technology to smooth out kinks & reduce delays
That’s an emerging industry view as the ongoing disruptions force manufacturers, ship operators and importers to accelerate their investments in technology to smooth out kinks, reduce delays and ultimately cut costs.
Among those on the front lines: Bertrand Chen, the chief executive of Hong Kong-based Global Shipping Business Network, a nonprofit technology consortium set up to simplify the business of trade through the use of blockchain. Its backers include some of the world’s biggest shipping lines and terminal operators.
Chen, who has a background in finance, said GSBN’s technology can facilitate the secure sharing of data that’s needed to settle trade.
For example, the company’s product — Cargo Release — is said to have cut the process of physical exchanges of documentation at Shanghai port to less than two hours instead of as many as three days by stripping out the process of queues and in-person interaction.
“There’s no more people going to a shipping line counter to present documents,” Chen said in an interview. He says the pandemic disruption will force through change in the industry.
Adapting to Tech
“You will have more digitization and more people adapting to technology,” he said. “What people haven’t been able to do for the last 20-30 years suddenly will happen due to Covid.”
The Asia Development Bank last month warned that the global trade finance gap rose 15% to $1.7 trillion in 2020 and say solutions include global standards and legislation for the digitalization of trade’s eco-system which would generate data, increase transparency, improve interoperability and ultimately boost access to trade finance.
Meanwhile, a report this month from HSBC economists titled “Smart Supply Chains” said manufacturers are going to deploy “internet of things” technology to, among other things, track inventory in real time and monitor equipment so they know when a machine is likely to go down.
“The COVID-19 pandemic has underscored the importance for businesses to embrace digital solutions more than ever before,” according to the HSBC report.
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