News / Supply chains show slow progress toward e-document transition

Digitisation may have advanced in the wake of the disruptions wrought by the Covid-19 pandemic, but supply chains still have a long way to go when it comes to the electronic transfer of documents.

Cargo X, a document transfer provider, uses blockchain, and conducted a survey of supply chain professionals about electronic document transfer – with rather sobering results. The company canvassed 400 professionals from global businesses, half of them in senior management or C-suite positions, on the current and anticipated future state of the digitisation of trade documents and their transfer along supply chains.

Despite hundreds of millions of dollars of investment in new technologies, broad adoption of the concept is still hampered by lack of information and reservations on a number of aspects, the survey found.

It depicts a diverse landscape. One third of respondents expressed interest in becoming early adopters of electronic document transfer, whereas 42% declared that they did not see the importance of the concept or how it could help their operations.

About 15% of the companies surveyed are running completely off paper documents.

Much of the hesitation is down to lack of information. Over half of the respondents described lack of knowledge about electronic data transfer processes as a primary reason that hampers broad adoption.

This extends to uncertainty on how to proceed. A lack of guidance on commencing the transition processes was mentioned by over one third of the respondents as a major issue.

Concerns about regulatory, legislative and compliance-related issues also factor rather heavily, with 27% of respondents regarding these as compelling reasons for the slow adoption of electronic document transfers.

Security concerns are another obstacle. While one third of the respondents felt secure about electronic document transfers, the other two thirds expressed varying levels of concern about cybersecurity, with 20% reporting genuine concern regarding cyberattacks on the network and their data.

According to KonBriefing Research, between July and December of last year, 27 companies in the transport and logistics sector fell victim to successful cyberattacks. Among these were forwarders, airports, railways ship lines and port operators.

The widespread lack of familiarity with the technology and the lack of information on it and its potential and benefits suggests that solutions providers have a job to do raising the level of awareness among supply chain professionals. But even with these obstacles diminished, there are still significant hurdles that are holding companies back.

Probably the biggest of these is the question of interoperability. Nearly half of the respondents (45%) reported difficulties collaborating with other digitally forward-looking companies due to running operations on disparate digital platforms. Executives who expressed interest in being early adopters noted that issues related to this would have to be sorted before they would make a move.

The inability of different digital networks to speak to each other because of interoperability problems means that data remains siloed within organisations, even if they have digitised processes and documents, the study’s authors concluded.

An integrated platform might be a solution. The absence of such a platform was seen as an issue by 32% of participants in the study.

The researchers included a hypothetical question what professionals would do if a proven interoperable solution did exist. While 43% of the respondents would readily adopt it, just as many would not do so until they knew exactly what they were signing up for. Another 11% would wait for mass adoption.

Perhaps regulators will speed up adoption. The US Customs & Border Protection agency is urging the trade community to go paperless and to adopt electronic export manifests as one step in that direction.

US Customs & Border Protection agency has already been running pilot programmes for exports via air, ocean and rail carriers excluding all paper-based manifest filing.