This article was published before we became the Chartered Institute of Export & International Trade on 10 July 2024, and this is reflected in references to our old brand and name. For more information about us becoming Chartered, visit our dedicated webpage on the change here.

Ecosystem of Trust - Digital Trade

The UK’s ambition is to have the “most effective border in the world” by 2025. To have the most effective border, the intent is to build an Ecosystem of Trust facilitated by the latest technology and infrastructure.

The plan is that businesses will benefit from simpler and faster processes for export and import thereby reducing barriers to trade and administrative burden.

For the UK authorities, border systems will need to continue to fulfil their regulatory functions – ensuring customs and sanitary rules are adhered to, tariffs collected and illegal goods blocked on entry, among others.

Ecosystem of Trust

The six ongoing ‘Ecosystem of Trust’ pilots are therefore important for paving the way for a future border that will simplify trade for businesses, while ensuring the government can oversee compliance.

According to the Institute of Export & International Trade’s (IOE&IT) director of strategic projects and international development, Kevin Shakespeare, the Ecosystem of Trust programme is about ensuring supply chain information can be obtained as early as possible, in real-time and digitally. This will enable authorities to make quicker decisions, managing risk on the basis of secure and reliable trade data.

The IOE&IT is involved in one of the six pilots as part of a consortium that includes several supply chain technology firms, including IOTA Foundation and Supply Chain Tracking (SCT) Technology. Built on the Trade Logistics Information Pipeline (TLIP) technology developed to establish a digital trade corridor in Kenya last year, the pilot will oversee shipments of tea bags, coffee and cut flowers from Kenya to the UK.

Digital seals

Eric Gill, the founder and CEO of SCT Technology, tells the IOE&IT Daily Update that the use of ‘digital seals’ has a fundamental role in the pilots, tracking the physical movement of freight and monitoring its location to watch out for potential ‘tamper events’ and diversion from authorised routes.

The term ‘digital seal’ describes a tag which uses the Global Positioning System (GPS) to triangulate its position and then uses the mobile phone network (GPRS) to report back to SCT’s consignment management application, CMA 3T.  The tag is connected to the freight (such as container or trailer doors) by a cable so that, if removed or cut, a real-time ‘tamper alert’ is sent back to CMA 3T.

Eric Gill - Ecosystem of Trust

[Pictured: Eric Gill, founder and CEO of SCT Technology]

When the tag reports to CMA 3T its location is plotted against pre-configured geofences, which are effectively areas or zones – such as the exporter’s premises or the departure port – that are ringfenced on a digital map.

Gill explains:

“This technology allows us to automatically advise the users – be they the authorities, hauliers or goods owners – when a tagged shipment leaves its origin and arrives or departs at any checkpoint – such as inspection sites and ports.

“It can monitor any deviation from an authorised route as well as any in-transit flows – i.e. you can see the shipment is being held up or any delays on the route – and this is done in near real-time. With the Ecosystem of Trust pilots, the relevant authority or body is therefore able to take timely action as needed.

“Whether its HMRC, Border Force or Defra, they really want to be able to have the knowledge that a shipment has been securely sealed at the origin, with the documentation certified and securely packed, and to then have visibility that the shipment is in transit to the UK port of disembarkation.”

The technology can effectively be used to track a shipment from the arrival port to the final destination premises, possibly – when instructed – via an inland border facility (IBF).”

Digital corridors

While supply chain tracking and visibility technologies have been developing and improving for several years now, the Ecosystem of Trust pilots will use the latest technology provided by SCT’s CMA 3T platform to establish permitted ‘digital corridors’ through which authorities can ensure goods are moved.

In effect, authorities can instruct hauliers to carry goods on a certain route – whether that’s simply crossing the border to the importer’s destination or mandating that the lorry travel to an inspection facility for checks. If the lorry deviates from this path, an alert would be issued to the authorities. Gill explains:

“If they would want to look at a shipment that we have flagged up as having a corridor deviation or a tamper alert, they would go into the CMA 3T software to see the details of exactly where the lorry has been, when the deviation happened and where.”

Gill doesn’t envisage digital seals being put on all freight entering the UK, but instead thinks a targeted approach will help the UK to adopt a more intelligent, risk-appropriate approach to border checks.

“The actual percentage of shipments coming in at somewhere like Dover that are being inspected is very low. The authorities therefore have a real interest in being able to gather more intelligence as to which shipments they should pull over to inspect and why.

“The government can identify particular goods and routes that will need to be tagged, and for lower risk movements, you won’t need to have a digital seal.”

Business benefits

For businesses, the benefits of greater supply chain visibility are well known – understanding where your goods are and when they should arrive is obviously good information for any importer or exporter.

The CMA 3T platform will give firms even richer information for better decision-making though. Gill explains:

“A lot of people talk about being provided an estimated time of arrival, and that is actually tricky to do as there are so many variables, several of which simply cannot be electronically recorded. We instead monitor what we call a ‘coming your way’ status on our dashboard.

“When you log in you can have a nominated zone, which could be where you work or the warehouse where your goods come in. You can set your zones so that you know if the goods are 20 miles out, 12 hours away, and so on. 

“This enables the haulier and the logistics organisation to plan their resourcing better. Over, say, the next 12 hours, they can estimate how many trucks are on their way, how many are likely to arrive overnight.”

On-the-ground trust

Jens Munch Lund-Nielsen, the head of global trade & supply chains at the distributed ledger technology firm IOTA Foundation, last week told the IOE&IT Daily Update that the success of the pilots will pave the way for more digital corridors to be established, which he says “will improve access to markets without even needing to negotiate things like tariffs”.

Lund-Nielsen made the case that “immutable” data, secured by cloud-based blockchain technology, was a game changer in making programmes like the Ecosystem of Trust possible.

It’s clear, however, that technologies like digital seals and geofencing also have a key role in ensuring authorities can trust that the on-the-ground movement of goods is compliant, ensuring that the UK’s future border fulfils its core regulatory functions, as well as simplifying trade for businesses.