What a staggering irony we’re facing! The technology to send a robot to Mars exists, but the $25 trillion global trade industry is still shuffling around four billion pieces of paper (see Bloomberg article “The 4 Billion Pieces of Paper Keeping Global Trade Afloat”). Let that sink in for a moment. We’re navigating the cosmic ocean but drowning in a sea of paper on Earth. It’s as if time has stopped, trapping global trade in a 19th-century bottleneck while the world whirls ahead.
A Fractured Fairytale
Picture this: your cargo, brimming with the fruits of human ingenuity, is on its way from Brazil to Europe. But the real protagonist in this tale is not the cargo; it’s the paper trail it leaves behind. This humble sheet, known as the bill of lading, embarks on its own odyssey — sometimes even taking flights. The swath of paper it begets along the way — verification, insurance, customs — is nothing short of a bureaucratic Hydra. Decapitate one head, two more shall take its place.
The Cost of Paper — More Than Just Trees
Yes, we’re talking about a jaw-dropping 16.4 hours to process a single bill of lading, according to McKinsey. But it’s not just about lost time; it’s about misplaced trust. The International Chamber of Commerce estimates that roughly $50 billion per year in global trade is fraudulent. The paper — so easy to forge — becomes the weapon of choice in a $9 billion swindle over the last decade. And yet, less than 2% of global trade has been digitised. This isn’t a system; it’s a time bomb wrapped in legalese and red tape.
The Blockchain Salvation
Here’s where blockchain struts onto the stage, not as a disruptor but as a saviour. Imagine a ledger so transparent that it illuminates the dark recesses of trade, a ledger that can’t be tampered with. Each transaction forms a block; each block is a beacon of trust. The bill of lading metamorphoses from a piece of paper into a digital asset, fortified with smart contracts that automate the trust, the verification, and the very essence of trade.
Blockchain not only eviscerates the opportunity for fraud but shaves off the inefficiencies that have shackled the industry. It’s a leap, not a step. A leap from vulnerability to security, from opacity to transparency, and from inefficiency to streamlined grace.
The Role of Artificial Intelligence
But why stop at blockchain? If we’re reimagining trade, let’s pull out all the stops. Enter Artificial Intelligence. AI acts as the cerebral cortex to blockchain’s limbic system. While blockchain secures the transaction, AI optimises it. Predictive analytics, real-time monitoring, and data-driven insights — AI can make sense of the noise (from structured and unstructured data), turning raw data into strategic decisions.
The Turning Tide
The UK’s recent Electronic Trade Documents Act is a watershed moment. It’s not just a law; it’s a philosophical shift. Similarly, Singapore and soon France are embracing digital documents as legally binding. They’re not just changing the rules; they’re changing the game.
The NotCentralised Factor
At NotCentralised, we pride ourselves on our ingenuity and focus on innovation. Whether it’s Digital Escrows, Digital Bank Guarantees, Private GPT models or working with Zero-Knowledge Proof technology, we are at that cutting edge. If you’re interested in the types of innovations we’re building here then make sure you get in touch.
The transition to a digital-first approach in global trade isn’t just necessary; it’s existential. We’ve been held hostage by a legacy system, teetering on the edge of obsolescence. But remember, every revolution begins with a single act of defiance. Defy the paper, embrace the digital, and let’s write the future in lines of code, not ink.
So, when you’re sipping that Brazilian coffee in the heart of Australia or Europe or Asia, give a nod to the invisible lines of code that made it all possible. Blockchain and AI are more than technologies; they’re the architects of a new world order in trade, and in this new world, trust isn’t just a word; it’s coded into the very fabric of commerce.