Impact of Digitalization on International Trade
The introduction of technology in trade has transformed the world. Many business areas have benefited from the changes technology has made in operations regarding speed, security, and efficiency. This article will look at digitalization's impact on international trade, especially regarding documentation. Examples of international trade documentation include issuing electronic bills of lading and digitally submitting the export declaration form.
The change process did not significantly affect documentation in the shipping process until COVID-19. The pandemic had a profound impact on the way documentation for international trade was handled. Many containers with exported goods could not be processed due to the lack of proper documentation and paper-heavy processes.
Did you know that export documentation can span as much as 50 pages and be passed back and forth among up to 30 stakeholders? Imagine the impact digitalization can have on international trade!
What is the impact of digitalization on international trade?
Digitalization has profoundly impacted international trade in the following terms:
1. Increased reach for smaller companies to international markets
2. Improved operational efficiency and cost reduction
3. Better transparency in the whole process and traceability of goods
4. Data assimilation to help you make informed decisions on the next steps
5. Quicker payments and easier access to trade finance solutions
6. Efficient and secure handling of documentation
Let’s dive deeper into how digitalization is transforming international trade:
Simplifies Paperwork
The export process requires many documents, typically including the bill of lading, the invoice (commercial and proforma), the certificate of origin, the packing list, the bill of exchange, the export license, insurance documentation, and the export declaration form. Today, the process of producing and submitting documents securely and fraud-proof is possible due to the security measures used by platforms that enable this. Digitalization also ensures that access is given only to authorized people.
Better accuracy and fewer errors
Manual documentation processes are prone to errors. Digitalization addresses this challenge by using intelligent parsing. Software in platforms that support documentation can cross-check the data filled in forms to minimize mistakes. Features like saving data, retrieving information using a one-time password, etc., ensure that the data filled in forms cannot be tampered with.
With digitalization, you can avoid the painstaking process of manually filling forms and leverage cross-referencing information across different forms to avoid errors.
Processing speed and quicker clearance
When you digitalize the documentation process for international trade, you can retrieve and submit your documentation with a few clicks. Processes like customs inspections and clearances become faster due to the instant availability of documentation. This, in turn, speeds up the process of sending and receiving goods.
Transparency and traceability
Digitalization can improve transparency in the entire export process. When required, the source of the goods, country of origin, and all the stakeholders involved are available. Whether it is the manufacturing process or the supply chain aspect of the product, all the information is easy to access.
Reduces documentation costs
Smaller and medium-sized businesses often hesitate to enter international trade due to the sheer volume of documentation required and the attached cost. However, with digitalization, the documentation process has become quicker and cost-effective, encouraging businesses of all sizes to enter export trade.
Eases the regulatory compliance process
Compliance and regulatory requirements differ from country to country, which can be challenging for businesses. However, with the digitalization of the documentation process, exporters can quickly produce the proper documentation to meet these requirements.
Improved collaboration across stakeholders
The export process involves many stakeholders, including transporters, freight forwarders, shipping agents, factory personnel, warehouse staff, customs officials, financiers, insurance agents, and more. When you digitalize the documentation process, communication and collaboration among all these stakeholders become quicker and easier.
At LeRemitt, we are committed to making international trade simple, convenient, and economical. We offer a centralized trade documentation platform to ensure that you, the exporter, have an efficient and secure resource for easier operations. The result? Improved compliance, reduced costs, enhanced security, and overall operational efficiency!
Want to get started? Click here to contact us!
