Oswald Kuyler is the managing director of the Digital Standards Initiative (DSI), an independent entity overseen by the International Chamber of Commerce, which aims to develop open trade standards to facilitate interoperability among the various blockchain-based networks and technology platforms in the trade industry. In this next instalment of Marco Polo’s ‘The Innovator’ series, he provides an overview of recent developments within the DSI, as well as some of the practical considerations and complexities around establishing a globally harmonised, digitised trade environment.
Q: The Innovator has previously touched on the importance of digital trade standards, but can you give an overview of the practical need for standards from the perspective of exporters and importers?
Kuyler: Exporters and importers operate in a landscape with many different solution providers positioning themselves to enable trade digitisation. This diversity is healthy as it offers new, innovative approaches and solutions to some of the challenges that have not been solved over the last two decades of trade digitisation efforts.
Within this landscape, exporters and importers are searching for applications that enable two key objectives. Firstly, those that digitise trade in a manner that is both resilient and efficient – in terms of licensing cost and operating model implications. Secondly, those that digitise trade and in doing so support higher rates of effectiveness – by enabling benefits associated with working capital, contract enforcing, inventory management, supply chain visibility, sustainability, and so on.
But sometimes the rich diversity of available applications results in challenges for exporters and importers in their ability to actually achieve those effectiveness and efficiency goals.
A practical example is that most of the eDocumentation applications have different definitions for electronic bills of lading in terms of how these documents are prepared and issued. At a minimum, this causes challenges when embedding these documents into a company’s operating model as you have to train up staff on different steps in multiple applications for the same business process. But the broader impact is that it hinders the exchange of these types of documents between applications and, ultimately, the ability to have an interoperable landscape.
Standards help solve for these challenges, and this has been the DSI’s ‘north star’ since our inception.
It’s worth noting that the team at Marco Polo were one of the leading forces defining the need for standards and the creation of the DSI, providing the thought leadership required to solve these challenges.
Q: What is the ‘utopia’ that companies which engage in cross-border trade are working towards that digital trade standards can help them achieve?
Kuyler: There are many talented people spending a lot of time building ecosystems with marginal success due to onboarding constraints. With over two decades of trade digitisation behind us as an industry, one could argue that utopia at a very basic level is for us to move beyond this conversation within the next five years.
Simplistically, in the short term, we need exporters, importers, banks, carriers and fintechs to have access to foundational standards for trade digitisation. This would be where you have uniformity across things like the definition of legal entities, the way in which you prepare and issue a bill of lading, the rules and terms associated with title management, and the requirements for electronic presentation of a commercial invoice and bill of lading.
The adoption of these foundational standards would simplify the operating model considerations for all players across the ecosystem. It would eliminate the risks and costs associated with training up staff members to execute the same business process across many different systems. At a base level, it enables adoption and reduces the cost of integration.
It’s important to recognise that different supply chain component parts are driven by different requirements and innovations. One application cannot fulfil all requirements for all industries, carrier types, and banks globally. We need the richness in diversity. Being able to move digital documents across country borders is no longer the key innovation, but rather a foundational requirement.
According to the Digital Container Shipping Association (DCSA), electronic bills of lading (eBL) account for only 0.1% of all bill of lading issuances globally. This tells me that we have a lot of room to grow. Once this growth has been achieved, many more companies will be able to benefit from these solutions. For example, eBL solutions will be made available on the Marco Polo Network, but we need to address the adoption to really see these initiatives make an impact on the trade finance gap globally.
Q: The DSI has made a number of significant announcements recently – can you fill us in on the details, and what this means for the wider trade industry?
Kuyler: We are excited to have Emmanuelle Ganne from the World Trade Organization (WTO) join our board. Emmanuelle is a thought leader on trade digitisation and her insights will be invaluable on this journey. Having both the World Business Organization and the WTO on the governance board is important as enabling trade digitisation requires a new form of engagement at a global level.
We also announced recently that we will soon be launching DSI Online – going live in June 2021. This is an important step for us as it simplifies access to standards for the developer, executive and policy makers. We have structured the site based on capabilities and interest so as to ensure it is fit for purpose for utilisation by all of these players.
Among other things, the site will enable a simplified experience for developers who want to know which standards are already available, and which they can then use efficiently. We will launch with a few important standards, including the DCSA’s eBL standard, and invest time into getting companies to adopt these. The site will also enable executives to get a sense of the working groups collaborating on creating new standards, rules and frameworks. This will help to reduce the duplication of efforts, and enable executives to opt in to the various groups if they want to contribute. Finally, for policy makers, we will be providing information on how to approach the adoption of the UNCITRAL Model Law on Electronic Transferable Records (MLETR).
At a base level, what we are doing is simplifying access to standards for people who want to design and develop great applications, but aren’t familiar with the standards landscape.
Q: What is the role that platforms – and specifically Marco Polo – can play in driving this work forward? How do you foresee the DSI and Marco Polo collaborating in the future?
Kuyler: I’m exceptionally bullish on platforms like Marco Polo. The way I view this is in rather simplistic terms. During the evolution of productivity – think Windows 95-98 and word processing, etc – a new breed of companies shot to the top valuation-wise as they helped lead the world into this era. Similarly, when we removed the inefficiencies of being tied to the desktop, companies like Apple, Google, Facebook, etc also flourished. Each step we take as a society that removes a large inefficiency requires organisations that think differently to take the lead – I see Marco Polo operating in this space.
I believe we are in the early days of a paradigm shift where companies can exchange quality, reliable, verifiable data between each other. At the very least, by enhancing the quality of the data, this will start improving the effectiveness of the existing reporting and analytics infrastructure. In the long run, this may lead to new business models, services and solutions we haven’t yet dreamt of.
Platforms like Marco Polo are the future infrastructure needed for the various applications out there. They help define and set standards, enable adoption and – more importantly for me – really drive some of the use cases around supply chain resilience and sustainability.
Oswald Kuyler is the Managing Director of the International Chamber of Commerce Digital Standards Initiative. Oswald is the former Head of Data Strategy of BHP, the world’s largest diversified mining company. During his tenure he led initiatives covering blockchain, electronic documentation in trade, data and analytics, and automation.
Before BHP, he was on the leadership team of EOH in South Africa, delivering solutions for a diverse customer base globally. He focused on providing solutions that enabled electronic documentation and records management, enhanced collaboration, business process management, and reporting.
A technologist with a strong focus on the impact digitisation has on corporates’ balance sheets, he is now focused on further the enabling of trade digitisation through the creation of standards at the International Chamber of Commerce.
About the author
Shannon Manders is an editorial consultant and award-winning international trade finance journalist with over a decade of experience reporting and producing print and online publications on the global trade and trade finance sector. She is also the editorial director of international trade finance publication GTR, where she has been working since 2008.