TradeTech for Greener Supply Chains

Knowledge Graph of Debate

Session report

Yasar Jarrar

The potential of technology in the supply chain is generating excitement among participants, as seen in their positive sentiment. For example, Dubai Chamber and Dubai Customs have implemented a virtual freight and logistics quarter, resulting in a significant improvement of approximately 50% in costs and efficiency. This highlights the positive impact of technology on the supply chain industry.

However, some participants believe that the actual implementation of trade tech is still in its early stages, leading to a negative sentiment. This is mainly due to the fragmentation in regulation and understanding of data. There is a clear need for universal standards for supply chain emissions as the existing regulations date back to the 19th century. The rapid progress of technology has outpaced the understanding and updating of regulations, which urgently needs to be addressed. Consequently, there is a negative sentiment towards the slow implementation of effective and universal standards by regulatory bodies and governments.

Participants also anticipate a fragmentation of trade routes, with a neutral sentiment towards the prediction of pockets of excellence in certain trade routes. This implies that some trade routes may be more technologically advanced than others. The successful implementation of trade tech requires cross-border and global connectivity. However, the challenge lies in determining the appropriate platform and governance for these cross-border discussions. The UAE exemplifies a unique approach through the establishment of a cross-border sandbox, allowing for the adaptation and testing of robust regulations. This demonstrates the agility and speed of the UAE in embracing technology and innovation.

The importance of harnessing technology’s potential across various sectors, such as trade, healthcare, and education, is emphasized. It is argued that technology can play a crucial role in driving progress and achieving the related Sustainable Development Goals (SDGs).

Addressing the technology skill gap is deemed urgent for the successful implementation of sustainable technologies. For instance, U.S. Steel estimates that it would take approximately 30 years to retrain their staff for the decarbonization of some steel products. Bridging this gap requires concerted efforts to ensure the effective adoption of sustainable technologies.

The significance of scale and the need for reality checks in scaling sustainable technologies are positively emphasized. Participants agree with the notion that scaling sustainable technologies requires careful consideration of real-world limitations. This implies the need for practical and realistic approaches to achieve scale in the adoption of sustainable technologies.

Governments are viewed as key actors in closing the gap between technology disruption and regulation, and there is a positive sentiment towards the idea that governments can drive change through incentives and targets. However, punitive measures are not seen as the most effective approach. Instead, the benefits of adopting sustainable technologies should outweigh any negative consequences.

The inadequate enforcement of regulations is negatively perceived. It is recognized that past targets have often been missed, highlighting the need for stronger enforcement to ensure compliance.

The main challenge in implementing technology in the supply chain lies in surrounding aspects rather than the technology itself. This emphasizes the importance of addressing related issues such as regulation, governance, and skill development to fully harness the potential of technology in the supply chain industry.

There is a positive sentiment towards viewing the additional cost of sustainable options as an insurance against a degrading future. This suggests a shift in perspective, recognizing the long-term benefits and value of investing in sustainable practices.

Government procurement is identified as a significant driver in accelerating the transition towards green practices. With government procurement accounting for a substantial portion of global GDP, it can have a transformative impact on promoting sustainable practices across various industries.

The need for a public-private regulatory global body is positively mentioned. It is argued that the private sector is often more advanced in terms of knowledge and implementation of technology compared to governments. Therefore, involving the private sector in global meetings and discussions is crucial to ensure effective and up-to-date regulation.

In summary, the potential of technology in the supply chain generates excitement among participants. Challenges related to regulation, governance, skill development, and enforcement need to be addressed for successful implementation. The importance of cross-border discussions, universal standards, and regulatory bodies keeping up with technological advancements is emphasized. Additionally, the role of governments, bridging the technology skill gap, and the significance of public-private cooperation are highlighted. The sentiment is generally positive, recognizing the transformative power of technology in promoting sustainable practices in trade, healthcare, and education.

Angel Donev

MERSC, a global supply chain company, is fully committed to making global supply chains greener by leveraging technology. One of their key goals is to become carbon neutral by 2040, and they have already taken significant steps toward achieving this target. For instance, they have recently launched their first vessel that runs on green methanol, a sustainable fuel alternative. This initiative is a clear indicator of MERSC’s dedication to reducing carbon emissions in the shipping industry.

To monitor and optimize fuel consumption, MERSC’s ships are equipped with approximately 7,000 Internet of Things (IoT) sensors. These sensors provide real-time data on fuel usage, allowing for immediate adjustments and improvements in efficiency. Additionally, MERSC operates an advanced operations centre that utilises analytics to monitor sea conditions and optimise shipping routes. By leveraging technology in this way, MERSC is able to reduce fuel consumption, limit carbon emissions, and minimise the environmental impact of their operations.

In addition to their focus on greening supply chains through technology, MERSC also recognises the need for efficiency in land logistics. They aim to optimise container transport through the use of technology, as there is currently significant inefficiency in this area with excessive empty miles performed by truckers. By implementing technological solutions, such as improved container swapping between customers, MERSC seeks to streamline land logistics and reduce waste.

However, MERSC acknowledges that the barriers to scaling technology in supply chains are not purely technical. Rather, they believe that change management is a significant challenge that needs to be addressed. While technology may be readily available, navigating and implementing changes on a large scale can be hindered by various factors such as legislation and on-ground execution. MERSC emphasises the importance of change management in order to fully leverage the potential of technology in supply chains.

Furthermore, MERSC recognises that well-defined standards and flexible implementation are crucial for managing change and successfully scaling technology. By establishing clear guidelines and allowing for adaptable practices, the adoption and integration of technology can be made smoother and more effective.

MERSC also believes that incremental connection to a global network can create additional benefits and incentives. As more individuals and businesses join the network, the advantages and opportunities multiply, generating motivation for others to connect and engage. By encouraging incremental connections, MERSC aims to expand the benefits of a global network and stimulate further technological advancements.

In terms of consumers’ preferences, MERSC has observed that there is a willingness to pay more for greener options. This is evidenced by the fact that 2% of all cargo carried by MERSC is already pre-paid on alternative fuel sources. Furthermore, companies like Apple have actively embraced carbon neutrality, showing that sustainability and responsible consumption are becoming increasingly important factors for both businesses and consumers.

MERSC also believes that penalties and carbon taxes have a role to play in driving change towards greener supply chains. The International Maritime Organization has committed to improving sustainability in the shipping industry, and studies conducted by the Boston Consulting Group indicate that the introduction of carbon taxes can lead to an uplift in the cost of living. By implementing penalties and carbon taxes, a balance can be struck that encourages companies to adopt sustainable practices and contribute to a greener future.

In conclusion, MERSC is deeply committed to making global supply chains greener by leveraging technology. They have set ambitious targets and are already implementing sustainable solutions, such as green methanol-powered vessels and IoT sensors to monitor and optimise fuel consumption. However, MERSC acknowledges that change management issues, such as legislation and on-ground execution, can impede the widespread adoption of technology. To successfully scale technology and drive change, well-defined standards, flexible implementation, and incremental connections are key. Additionally, the willingness of consumers and businesses to pay more for greener options, coupled with the implementation of penalties and carbon taxes, can further incentivise the transition towards greener supply chains. Overall, MERSC’s approach demonstrates a forward-thinking stance in aligning supply chains with sustainability goals.

Shamika Sirimanne

The analysis of the speakers’ statements reveals several key points regarding the use of technology in trade and its impact on developing countries. Firstly, it is highlighted that the United Nations Conference on Trade and Development (UNCTAD) has been actively working in developing countries for 40 years, introducing digital platforms and customs automation. This has resulted in improved efficiency, reduced bureaucracy, and cost savings in the clearance of goods. Notably, small traders, especially women entrepreneurs, benefit from this automation, as it reduces the hassle they face.

Automation also brings about positive environmental changes. By minimizing the use of paper and reducing the number of trips required for clearing goods, customs automation significantly decreases carbon emissions. The implementation of these automated customs processes contributes to sustainable practices in trade.

However, amidst these positive advancements, challenges in data governance emerge. Questions surrounding data ownership, access, intelligence creation, and profit-making pose significant cross-border data governance challenges. The absence of a universally accepted solution poses a hurdle in ensuring effective and secure data management.

Political support plays a crucial role in implementing trade technology solutions. The successful establishment of a single window system in Rwanda, facilitated by a presidential decree, highlights the necessity for political buy-in to drive technological advancements.

To fully embrace the benefits of trade technology, it is essential to consider sustainability and capacity building. The analysis points out that solutions must go beyond merely providing technology and also focus on sustainable practices. This includes training IT staff and ensuring local adaptation of systems. The importance of nurturing and retaining trained IT staff is emphasized, as the loss of skilled individuals to other countries can hinder progress.

The analysis also highlights a significant disparity in the readiness of developing and developed nations to benefit from new technologies. The readiness index, which examined 166 countries, revealed the United States, Sweden, Singapore, Switzerland, Netherlands, and Korea as the top performers, while many African and Latin American countries ranked at the bottom. This disparity underscores the need for deliberate policy changes and critical investments to bridge the technology gap and reduce inequalities. Countries like India, the Philippines, and Vietnam have demonstrated that deliberate policy changes, investments in research and development (R&D) and information and communication technology (ICT) capabilities, and skills development can significantly improve readiness and capabilities to benefit from new technologies.

Moreover, the analysis emphasizes the dynamic and fast-paced nature of digital technologies, creating a narrow window of opportunity for developing countries. It accentuates the importance of seizing the limited moments when opportunities arise to leverage the benefits that digital technologies offer.

The issue of cross-border data governance is another significant challenge identified in the analysis. The complications surrounding e-bill of landing due to cross-border data issues and different governance systems across the globe are identified. The analysis acknowledges cross-border data governance as not only a trade and human rights issue but also an environmental concern. Building interoperability among various data governance systems is recognized as crucial for effective data management and collaboration.

In conclusion, the analysis highlights the crucial role of technology in improving trade processes and efficiency. It sheds light on the positive impact of automation and digital platforms in reducing red tape, promoting sustainability, and benefiting small traders. However, challenges in data governance, political support, and bridging the technology gap between developed and developing nations remain. To fully leverage the potential of trade technology, a comprehensive approach that includes sustainability, capacity building, and strong policy frameworks is necessary. The analysis stresses the need to expand the dialogue on trade tech to foster innovation and exchange of ideas within the international community.

Moderator

During the analysis, the speakers focused on several key aspects of sustainable supply chains and trade tech. An important theme that emerged was the need for increased visibility and transparency in supply chain operations to reduce inefficiencies. The speakers highlighted the significant inefficiencies in land site logistics, such as empty miles performed by truckers due to a lack of platforms to exchange containers.

Technology, particularly AI, IoT, and blockchain, was identified as having immense potential in improving efficiency and reducing costs in supply chains. The analysis pointed to McKinsey data, which suggests that AI could improve supply chain efficiency and reduce costs by 50%. Dubai Customs was also mentioned as an example of a company that has improved transaction costs and efficiency by about 50% through the use of technology. The speakers emphasized the role of technology in achieving sustainability goals, mentioning its ability to predict future disruptions, understand the length of the transportation chain with sufficient data, and bring about a sustainable revolution.

Government regulations, policy changes, and incentives were highlighted as crucial factors in promoting sustainability. It was mentioned that companies are setting their own nationally determined contributions (NDCs) to work towards sustainability targets set by governments. The analysis also called for the establishment of green regulations and policy changes to further encourage sustainable practices. Penalties and carbon taxes were suggested as means to drive large-scale changes, and the International Maritime Organization was recognized for its steps towards implementing green regulations, despite the existence of unclear terms.

The discussions on data governance revealed that it is a significant issue, particularly in cross-border data sharing. The analysis called for the establishment of clear standards and global compliance incentives, rather than mandates. The need for interoperability between different data governance systems was also highlighted. The speakers emphasized the importance of building interoperability into varying data governance systems and promoting open global conversations on the issue.

Consumer behaviour was identified as a significant driver for sustainability efforts. It was noted that people are increasingly making purchases based on companies’ sustainability initiatives. Brands like Apple were given as examples of companies taking note of this trend and making firm commitments towards environmental care and sustainability.

Collaboration was deemed essential for the exchange of information and data in supply chains. The analysis highlighted the benefits of collaborations, such as optimizing transportation, logistics, and scenario planning. It was also noted that companies are increasingly sharing data for a better understanding of their network. The analysis emphasized the need for educational efforts to help smaller companies understand the importance of data sharing and collaborations in supply chains.

The analysis touched on the role of trade tech in making trade more efficient, green, and inclusive. It was emphasized that trade tech needs to be part of open discussions and shared to accelerate its adoption. The potential impact of trade tech on developing countries was also discussed, emphasizing the windows of opportunity that arise but are often short-lived.

Overall, the analysis highlighted the importance of sustainability in supply chains and the potential benefits of technology adoption and collaboration in achieving these goals. It also underscored the need for government regulations, policy changes, and incentives to drive sustainable practices. The challenges of data governance and the influence of consumer behaviour on sustainability efforts were also addressed. The analysis concluded by calling for greater collaboration and the establishment of global regulatory bodies to drive sustainable practices in trade and supply chains.

Sahil Kothadia

During the discussion on sustainable supply chains, the speakers emphasised the need for collaboration and data sharing among companies to achieve greener and more sustainable practices. They highlighted that without visibility beyond Tier 1 supply chains, manufacturers cannot fully understand the environmental impact of their raw materials. By embracing network visualisation, companies can gain insights into potential vulnerabilities and identify more efficient and environmentally friendly paths in their supply chain.

Layered mapping of supply chains, along with considering transportation and wider disruptions, was proposed as an effective strategy to mitigate risks and optimise costs. This approach enables companies to reduce transport hops between tiers and strategically locate warehouses, resulting in reduced carbon footprints.

The potential of artificial intelligence (AI) and predictive analytics in transforming sustainable supply chains was also discussed. With sufficient data, AI can be leveraged to predict and prescribe measures for cognitive supply chain management. Predictive analytics, on the other hand, can estimate the duration of transportation leg disruptions, enabling better planning and risk mitigation.

Collaboration emerged as a crucial factor in the supply chain ecosystem. The speakers argued that when supply chains and the ecosystem collaborate effectively, the impact of disruptions can be minimised. Collaboration facilitates the exchange of critical data and information throughout the supply chain, extending all the way to customers, ensuring greater efficiency and resilience.

The importance of data sharing and collaboration was further emphasised. Companies are now more willing to share information, realising its potential in understanding the complexities of the supply chain network. This collaboration allows for better organisation and planning, logistics optimisation, and scenario planning. However, it was acknowledged that convincing companies to share data requires a significant effort and education, but once they understand the importance of collaboration, they become more willing to contribute.

Furthermore, the discussion highlighted the role of risk-based inventory management in promoting sustainable and greener supply chains. Companies can optimise their investment distribution across the entire supply chain, resulting in better risk management and more environmentally friendly practices.

The urgency of educating companies about the importance of collaboration and data sharing in supply chain management was also emphasised. The speakers stressed that companies need to be educated and made aware of the benefits of collaboration to overcome any reluctance in sharing data. Once companies comprehend the positive impacts, they are more likely to actively engage and contribute.

In terms of GHG emissions control, it was suggested that companies need to start somewhere rather than trying to solve everything at once. One way to do this is by focusing on controlling GHG emissions, specifically through categories such as purchasing goods and services, transportation and distribution, waste management, business travel, and employee commute. The forum also mentioned the discussion of greener steel production by Sahil Kothadia.

The importance of engaging suppliers and working collaboratively to collect and control GHG emission data was highlighted as well. Larger manufacturers were encouraged to support smaller suppliers in their journey towards a greener ecosystem.

To optimise GHG emission control, it was proposed to strategically optimise supply chains and set clear boundaries within the value chain. Scenario planning of supply chains was mentioned as a key tool in understanding greener options.

Regarding policy and regulation, it was agreed that they play a vital role in creating an even playing field and promoting equal opportunities. Companies expressed the need for policies and regulations that are consistent and do not burden them with multiple reporting formats and structures.

A noteworthy observation was the importance of having a well-connected sustainability group that collaborates closely with individuals involved in day-to-day operations. This connection was seen as crucial for effective control of GHG emissions.

Overall, the discussions emphasised the significance of collaboration, education, and data sharing in achieving greener and more sustainable supply chains. The potential of technologies such as AI and predictive analytics was highlighted, along with the role of risk-based inventory management. It was acknowledged that policy and regulation should support companies in their sustainability efforts.

Speakers