Small online sellers that engage in cross-border trade lack in-house capabilities for managing trade logistics and compliance. Governments around the world seek to facilitate firms’ trade compliance with trade single windows that enable sellers to submit all documents associated with a trade transaction electronically to all pertinent government agencies in one place. Payoffs from single windows are significant. For example, in Kenya, the average time spent on processing applications dropped by 50 percent, the number of documents required for processing halved and traders saved time previously spent on visiting various agencies. Costa Rica reaped $16 in economic gains from every $1 invested in the single window; without the system, exports would have on average been 2 percent lower. Digitizing customs clearance is found to cut border compliance time for imports on average from 110 hours to 37 hours and to significantly reduce corruption in customs.
Single windows have shortcomings, though. They have yet to enable interoperability and sharing of data among the various agencies as well as private entities in any one trade transaction, such as freight forwarders, shipping lines, ports, banks and logistics and insurance companies. For example, in Thailand, the Thai National Shipping Council (TNSC) has found that traders moving goods in and out of Thailand deal with 21 processes that require altogether 30-40 documents and multiple data re-entries that are made manually 50-60 percent.
Thailand, Singapore, and Japan have worked to solve the lack of interoperability in the trade ecosystem by adopting what could be seen as “single windows plus”, blockchain-based national trade platforms that enable interoperability across the trade ecosystem and trade-related B2B, B2G, and G2B transactions and services, and that especially help SMEs engage in trade.
The Networked Trade Platform (NTP) introduced in 2018 was developed by Singapore Customs in collaboration with the Government Technology Agency of Singapore (GovTech) and is intended to serve as a trade and logistics ecosystem connecting businesses, government agencies, and community systems and platforms in a common platform that enables business-to-government (B2G) and business-to-business (B2B) services. For example, shippers can use the platform e-Freight Management services to share data with their supply chain partners; marine cargo insurance services to quickly secure cargo insurance; and trade permit preparation services that transmit and populate shipping information seamlessly from shippers’ internal systems to NTP, reducing the time for trade declaration applications from up to four days to 1-2 days. The NTP also helps shippers with price scanning and route calculation services based on a user’s input regarding cost, cargo and efficiency, and banks and non-bank lenders accelerate credit analytics.
Further apps are being developed on the platform, for example to help banks screen SMEs seeking trade finance, and enable shippers to crowdsource products and services they need through the trade cycle, such as via consolidated data on freight rates, warehouse locations, trade finance and insurance rates, data on free trade agreements and tariffs and rules of origin, and so on.
The NTP brings the entire trade ecosystem into a common open innovation platform, which businesses and service providers can use to develop new applications to support needs of individual businesses, especially SMEs. For example, NTP users access a cloud-based enterprise resource planning (ERP) system that includes financial, purchasing, sales and inventory management functionalities and generated digital structured data for trade. These data will be stored within NTP for easy sharing with downstream trade partners, to reduce the time and cost of systems integration and maintenance.
The NTP was developed through close collaboration with the private sector. The project team met with over 250 individuals from more than 130 companies across the trade and logistics community to understand businesses’ pain-points in the trade process[EV1] .The team also ran five ideation workshops with industry players, developers, and small and medium-sized enterprises. According to estimates, NTP, which cost some $100 million to develop, could generate up to $400 million in labor time savings annually for businesses using it. Singapore is also exploring how blockchain can be used to connect NTP to trade platforms in other countries, such as Hong Kong, for all sides to exchange digital trade documents fast-track and secure trade in key trade corridors.
The private sector is working closely with the government to create Thailand National Digital Trade Platform (NDTP) as a means to streamline export and import processes, reduce document handling costs and erroneous entries, and eliminate redundant procedures on a blockchain-based platform. The NDTP also serves as a one-stop information exchange platform to enable exporters and importers to interact more efficiently with private and public sector players in the trade ecosystem. The platform enables digital sharing of all trade documents such as purchase orders, invoices, shipping instructions, sea waybills, certificates of origin, export permits, and insurance policies.
The Thai National Shipping Council (TNSC), which forms part of the private sector umbrella organization Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), is leading the NDTP effort. TNSC ran a proof of concept for the NTDP in 2019, and is also working toward an interoperability pilot with the Japanese national trade platform. The TNSC is also discussing furthering interoperability with Singapore’s national trade platform. TNSC aspires to connect the NDTP and Thai government’s national single window, leveraging the ETDA’s digital ID that exporters and importers can use when interacting with the various public and private sector players in the trade ecosystem.
The Thai government launched several other initiatives to facilitate ecommerce that essentially serve as the digital backbone for the NDTP. One relates to the creation of a national digital identity that will be interoperable between the public sector and private sector and enable eKYC for companies to quickly open bank accounts and access ecommerce-related documents, such as e-tax invoices and e-receipts, and secure e-timestamps. ETDA has created the “ETDA Connect” as an open ID connect protocol and the so-called National Root CA, the underlying structure that handles e-signatures and encryption. Thailand also established an e-authentication framework designed to facilitate cross-border ecommerce transactions in the ASEAN and create common standards for authentication, building on the U.S. National Institute’s for Standards and Technology (NIST) work on authentication standards. Digital standards would also help national trade platforms, such as those of Japan, Singapore, and Thailand, to interoperate.