Pairpoint (Vodafone and Sumitomo Corporation’s Economy of Things (EoT) business), Deloitte, and Nexxiot’s recent partnership aims to deliver a digital trade compliance service, enabling companies to automatically verify data on their cargo’s movement and content. Learning from previous attempts to digitalize global trade must occur if the platform is to achieve success.
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Tracking and Audit for Customs Compliance
Pairpoint (Vodafone and Sumitomo Corporation’s Economy of Things (EoT) business), Deloitte, and Nexxiot recently partnered to deliver a digital trade compliance service, allowing companies to automatically verify data on the movement and content of their cargo. The service uses Pairpoint’s Digital Asset Broker (DAB) platform, Deloitte’s Know Your Client and Know Your Cargo services, and Nexxiot’s container tracking and monitoring solutions.
Integrating Nexxiot’s cargo telematics solution enables autonomous asset data collection and shipping containers to become intelligent agents capable of communicating autonomously to report tracking information. The data are collected, and an audit trail is created by Pairpoint’s DAB platform, enabling reporting of goods origin and integrity.
Addressing a Very Sore Pain Point
As any business in the United Kingdom that trades with the European Union (EU) will tell you, ensuring compliance with new regulation can have serious effects on internal operations. U.K. retailers that source goods from EU suppliers have had to set up entire departments and create new roles to deal with the changing customs arrangements. While this may seem like an isolated concern, increasingly stringent regulations are being imposed around the world as governments push for End-to-End (E2E) visibility of product journeys. The costs stemming from disruptions to freight, delays, and additional administration tasks continue to creep up on organizations and are having a serious impact on their bottom lines.
Pairpoint, Deloitte, and Nexxiot’s partnership is a strong push for the use of telematics in streamlining compliance with regulations, and could see significant success for a few reasons:
- Port authorities are increasingly only processing shipping containers if a full audit trail is provided.
- Using a telematics solution not only speeds up the reporting process, but also means that the container does not need to be opened for assessment, maintaining its integrity, and removing many manual check requirements.
- Gathering continuous, comprehensive tracking, and condition data gives companies all the information they need to ensure compliance with multiple country specific regulations.
Entering a Challenging Space
Attempts to digitalize global trade have not been uncommon. Blockchain applications were the flavor of the day for some time, but as ABI Insight “IBM and Maersk’s TradeLens Platform Discontinuation Points toward a Need for Greater Industry Buy-in If Enterprise Blockchain Ventures Are to Succeed” discusses, industry enterprise buy-in remained an immoveable barrier to the platform’s success. While the new service discussed here is not on the same scale as previous blockchain ventures, they do heed certain warnings for organizations stepping into the realm of cross-border digitalization. The number of parties involved is vast and variable; not all agents along the supply chain are open and able to interact with new systems and processes; and any increase in digitalization and asset connectivity will feed cybersecurity issues and data ownership concerns.
The DaziT program introduced by Swiss Customs in 2018 and due for completion in 2026 is on a strong trajectory to incorporate vehicle telematics for its customs clearance procedures. Geofences have been installed at border crossing points, which when passed through signal a risk analysis to be undertaken and then notify the driver through an app as to whether a customs check is required. The program has also focused heavily on standardizing and centralizing master datasets, as well as incorporating strict data management workflows to improve management quality. A key intention of the program is to leverage telematics to facilitate full automation of these procedures. Customs would only require a small proportion of the telematics data to automatically activate customs declarations. Practical tests of the process have confirmed viability, and uptake is only limited by fleets’ telematics adoption.
For organizations looking to leverage telematics to streamline customs processes, the Swiss program is proving to be an exemplary strategy to follow, focusing on data quality and facilitating change management first; offering universal methods of tracking and communication to begin the process and smooth the transition; and communicating with relevant authorities and businesses through working groups to foster collaboration and reposition the program as necessary.
For telematics providers, such partnerships and programs represent the industry’s awareness and desire to use telematics for streamlining one of the most complex areas of the supply chain. If the technology is to be successful in digital trade compliance, providers should take a proactive approach to identifying how their technology can be best used for reporting processes; ensure the tracking data can be adaptable to overcome the lack of standardization; and pinpoint areas of the world battling with incoming regulations that will yield the greatest interest and adoption in the coming years.