TradeTech for Greener Supply Chains

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.

Moderator:
Good morning, ladies and gentlemen, esteemed panelists, and distinguished guests. I’m honored to welcome you to this pivotal session, Trade Tech for the Green Supply Chain, as part of the WTO public forum, where we will delve into the heart of one of the most pressing and transformative challenges facing the world today, the revolution of the global trade through technology, trade tech. But before we dive into our discussion, I want to set the stage by highlighting an initiative that embodies the very essence of this digital transformation. The World Economic Forum and the United Arab Emirates have embarked on a groundbreaking three-year trade tech project that aims to reshape the landscape of global trade, leveraging cutting-edge technologies, streamlining trade processes, and nurturing an ecosystem that is not just efficient, but also inclusive, equitable, and sustainable. Why this initiative is so crucial, you may ask. The answer lies in the evolving dynamics of our world. Technology is reshaping the flow of global trade at a pace that policy and regulations are struggling to match. Emerging technologies such as blockchain, artificial intelligence, 3D printing, and the Internet of Things are poised to usher in disruptions that will only accelerate in the coming decades. The fourth industrial revolution is here, and it demands that international trade becomes more efficient, inclusive, and equal. This means ensuring that innovations benefit not only multinational corporations and developed nations, but also empower micro, small, and medium-sized enterprises and developing countries to access the opportunities presented by these technologies. This also means we should explore the use of trade tech to achieve greener supply chain logistics and this is why we are gathering here today. This could be particularly challenging as logistics has both concentrated and fragmented legs, depending on whether you look at the global shipping level, the concentrated, or the last mile delivery level, the fragmented side. Limited data sharing on availability and loads, for instance, prevents optimization, with some brokers creating a business model out of such a lack of visibility. At the same time, capital constraints and low profit margins cause innovation. We’ll discuss about all these while also trying to understand how new business models beyond third-party logistics are emerging thanks to trade tech and stepping up to the challenges as they entail a higher level of service integration, allowing for higher customization, ways to deal with supply chain uncertainty and disruption, and ever greater supply chain automation thanks to the incorporation of artificial intelligence. Our panelists present a diverse spectrum of expertise from industry leaders to advisors and they will shed light on various facets of this transformative journey. So what do we expect to explore from the panelists today? We would like to explore how trade tech can unlock efficiency gains that serve green outcomes in supply chain logistics, review how different market structures globally and domestically affect coordination for tech development and data sharing, and consider the customer and other incentives for a stronger carbon focus. And I’m very pleased and honored to have this high-level panel here. We have Dr. Jazar Jarrar. He’s the senior advisor to the UAE Ministry of Economy. And he holds the position of the senior partner at the IAG in the UAE. Then we have with us Mr. Anshul Donev, the Senior Vice President, Transportation Platforms and Tech Operations at AP Mollermersk, Sahil Kothadia, the Vice President of Global Supply Networks at Resolink, and last but not least, Mrs. Shamika Sirimani, Director, Division of Technology and Logistics at UNCTAD. She leads the UNCTAD’s work on trade logistics, which is geared towards the twin transition of global supply chains into green and digital. Thank you all for being here with us today. So I’m inviting now the overall comments from all panelists, how to balance sustainable outcomes in logistics when you have different market concentrations internationally and domestically. So maybe let’s start with Mr. Anshul Donev from MERSC. What is MERSC doing in terms of technology applications to make global supply chains greener today? And what are the plans for the future?

Angel Donev:
Thank you for having me today. It’s a pleasure to be here. MERSC is doing a lot, right? We have originally, back in 2016, issued a statement that we’ll become carbon neutral by 2050. A couple of years later, we pulled the strategy 10 years earlier. So we have said that we’ll achieve it by 2040 and with meaningful results already by 2030. And the journey so far has not been easy, but yesterday was a very big milestone where we had the naming ceremony of our first vessel that can run on green methanol in Copenhagen. And it’s first out of many. It’s a milestone for the industry, not only for MERSC, with 125 ships more sitting on order that are enabled to work with MERSC. Why I’m going in this direction is because global shipping represents around 3% of global carbon emissions. If you zoom in between the different elements of this carbon footprint, a significant part is the shipping fuel and how you navigate ships. What we’re doing there with technology, one thing is to continuously optimize the consumption of the ship. On average, our ship will have something like 7,000 IoT sensors, which gives indication near real-time on how the ship is performing, where it is positioned, what are the tuning levels. This is combined with a global center of operations of all the ships where we monitor currently all the conditions around the sea, what’s the optimal route that we need to take given the weather conditions, given the state of the cargo, given the promises made to customers across the board. There is a lot of analytics involved to make those decisions every day and to optimize the optimal speed, which can make a difference of up to 30% of the fuel consumption even on a regular ship. That’s just the sea part of it. If I look at the coverage of Maersk, the other big element is, of course, the land site logistics. Every container that we transport has to be hauled to the port and outside of the port on both ends of the import and export site. It’s shocking. I entered this industry four years ago. It was shocking to see the inefficiencies. In terms of how many empty miles are performed by truckers around the world to handle those containers. The main reason for this is… We don’t have a good platform and technology to exchange those containers between different customers. So even if you have two warehouses of two different customers 100 meters away and one just finished importing something and the container is ready for the return, 98% of the cases this container will be put on a truck, will be hauled to the depot, and then the next customer that is just 100 meters away will do absolutely the same. They’ll send an empty truck to the depot, they’ll take the container and they’ll bring it to the same facility. So this level of triangulation is still not prevailed. You see some companies working on it, mostly start-ups and to some extent scale-ups, but the overall collaboration, it represents a massive opportunity to optimize this thing. And in my opinion it’s something that we must do because renewing all the trucks to be electric and to drive efficiency there, it will take us longer. So we are obliged to pursue this opportunity. And then of course there are many other smaller things like we’re looking at electrification of terminals, we’re looking at even like greener IT where we’re demanding from our data centers and providers to use renewable energy. But I’ll pause here and give the word to others to answer as well.

Moderator:
Thank you, Angel. That was very interesting also to talk about the inefficiencies, and there is still a lot of room for improvement. Maybe Sahil, when it comes to greener, more sustainable supply chains, visibility and transparency play a big role. However, most of the organizations don’t have the visibility beyond their high-volume tier one suppliers. Knowing this, how can organizations leverage supply chain technologies and AI to solve this visibility and knowledge problem?

Sahil Kothadia:
Absolutely. Absolutely a good question, and thanks for having me today. Good morning to you all. As he pointed out, there are certain initiatives that bigger companies are taking and they are going to cost time and money to get them implemented. In the meantime, some of the tech companies like Resolink, what we do, we give an understanding to our customers, to big manufacturers, a visibility beyond the Tier 1 supply chains, which is very important because without that visibility, without knowing where you’re sourcing your raw materials from, you would not understand how much greener or grayer your transportation leg is from the Tier 3 or Tier 4 supplier all the way to your manufacturing unit. So that’s one thing. So network visualization becomes the cornerstone once you start understanding where your parts are being manufactured at what sites, at the Tier 1 level, at the Tier 2 level, at the Tier 3 level, that’s when you start understanding the potential vulnerabilities and understanding how you can make your supply chains, how you can effectively reduce the carbon footprint. The other thing is some small measures. If you try and understand your supply chain, you map your supply chain, and then you overlay that with your transport layer, where the goods are being shipped. That’s where you can start understanding the intricacies involved. You can work with the logistics companies or your suppliers to ensure that you are warehousing at a proper location or you are effectively reducing your transport hops between the tiers. And then on top of that, if you overlay the disruptions that occur across the globe, either due to geopolitics, either due to natural disasters, or any other aspects that can cause a disruption in the supply chain that could hit logistics, that could hit manufacturing, that’s another thing that will allow you to mitigate those risks and disruptions and optimize the cost of managing risk more sustainably. I mean, you can, you mitigate risk, but I mean, you can, how do you mitigate risk? Are you mitigating the risk sustainably? And that’s where technologies like AI, the mapping technologies definitely will help. So A, understand your network, B, map, overlay that with your, what do you say, your transportation network, and then overlay that with the disruption, the possibilities of monitoring disruptions, right? And then technologies like AI can help you with, and this is what we believe at Resolink, and this is what the tech companies can do, is to basically make it predictive, then make it prescriptive, and then make it cognitive. It’s not going to happen overnight. But the fact of, we are here today where you can, if you have enough data and volumes of data, you can look at, you can look and understand the causes of why, understand how long is your transportation chain. And then what you can also do is you can then predict, if there is a disruption, right, you can predict how long that hop is going to take between, how long is the disruption going to cause, or how long that transportation leg is going to last, right? So all of that, technologies like visualization and AI will help. bring in a sustainable revolution. It’s going to be slow, but it’s getting there.

Moderator:
Thank you, Sahil, very much. I appreciate it. Maybe going to the other panelists, any spontaneous thoughts or reactions, Dr. Jassar Shamika?

Yasar Jarrar:
I can start if you want. Hello, everyone, and good morning. So I will share some reactions from our vantage point in the UAE. So I’ll talk a little bit about the potential, because we are unbelievably excited about the potential, the fourth industrial revolution, all the good stuff we keep hearing about, you know, the blockchain impact, the visibility that data will give us, IOTs monitoring and optimizing trade routes, McKinsey gives us data that AI could improve efficiency in the supply chain, reduce costs by 50%. We applied some of that stuff and Dubai Chamber, Dubai Customs, they have a virtual freight and logistics quarter that improved costs of the transactions and hence improved the efficiency, reduced paper and all the related issues by about 50%. So we see the potential. It’s unbelievably exciting. And the UAE now is engaged in establishing trade agreements with about 34 countries around the world. Biggest one was India to start off with and to build on that, just launched the India Economic Corridor, joined the BRICS. Indonesia was signed up as a trade agreement, Turkey. So there’s a lot of potential. So the UAE is a trade hub. And as a trade hub, you know, efficiencies that can be brought to supply chains is unbelievably important. And making those supply chains green and globally friendly is equally important. So that’s the potential. The reality is, to be honest, from what we see, trade tech is in, I’m going to steal a one-liner from Jeff Bezos here. It’s on hour one of day one. Right? We see what’s possible. People are dabbling with it here in left, right, and center, but when it comes down to it, we talk about visibility of supply chains, and yet when we talk about sharing data for this visibility, every country puts up brick walls, and we start banning people from using the data. The servers have to be here. So there’s a huge fragmentation in regulation, and our understanding and acceptance of this data. The state tech is a complex system, not complicated, it’s a complex system, and a complex system, all the pieces have to work together, countries have to align, there has to be underlying understanding of the standards, a ship going, and you just mentioned that, a ship going from one destination to the other will get a very different environment by way of data, the freight, the trucks that are being used from one country to the other, and if we can’t get that right, then you have no interoperability. We used the legacy systems approach in the past, we had ERP system and middleware to bring our back ends together when we were doing some basic ERP in our own company. Now imagine the whole world is a company, and we have to have an ERP system to manage trade data around that, and collecting all this data, because if we want to have visibility on emissions, we need to have full visibility on emissions. If we want to be able to trace certificates of origin, which our friends in the Global Trade Facilitation Alliance are doing, helping some countries upgrade how they capture and register their certificates, then everybody has to accept those standards. So we see a lot of potential, but a lot of impediments to getting trade tech even close to its potential. So I think the one thing that keeps coming to my mind when we work on these things, and we engage with the World Economic Forum and others to advance these conversations, is we seem to have now 21st century technology, as clearly demonstrated, and 7,000 IoT sensors on one ship clearly says that we can monitor everything. Operating in what I would say 20th century management systems, how we still operate and put the empty miles and we put the containers. working in an environment of 19th century regulations. I don’t think the regulations have properly changed since we started shipping things on old ships. And that’s a huge dichotomy now. And I think the thing that needs to catch up really is the regulations. It’s these conversations, it’s the World Trade Organization, it’s people agreeing on how do we measure data, how do we make sure visibility is available to all, how do we define, how do we, we were talking about carbon pricing, how do we make sure there’s one price or a price somewhere so we all follow the same rhythm. I think the tech can deliver. It’s now our time to catch up as governments and intergovernmental organizations to allow tech to deliver what it can deliver. And that story probably is not just a trade issue. It’s repeating in every single sector. The potential for AI and tech and IOT and blockchain in healthcare and education, but the visible impact on our green supply chain is in trade. I think we can do wonders for reducing emissions if we can quickly deploy these technologies. My best prediction on this and where we’re seeing the next five years and maybe everybody could react to this is we’re going to start seeing pockets of excellence or maybe a balkanization of trade routes where some trade routes will become a little bit better than others. You can operate your smart ships in certain areas. Other areas can’t even have handled the data or the docs until the whole world agrees on a back-end standard, which is why we’re here, which is why we’re hoping this conversation continues and expedites. Technology is moving about a million times faster than our understanding and updating of regulations.

Moderator:
Yeah, maybe you just mentioned the international organizations and the role here. Maybe this is a good moment for Shamika to chime in.

Shamika Sirimanne:
Thank you. Thank you so much. I think, Yasser, as you said, the technologies are moving really fast and you also talk about the reality on the ground is something else. So let me bring some reality on the ground from our own work. You see, UNCTAD is the trade body of the United Nations and for 40 years we have been in developing countries. bringing really massive, complex digital platforms to start to do the customs automation, and then now we are increasing automating entire governmental procedures through these things called e-single windows. And we are in 102 developing countries and territories, and I think as we see the results are very quick. Cutting red tape for traders so they spend less time and money on the clearance of goods, less hassle and ease of business for small players, especially women entrepreneurs, so they don’t need to be hassled at the borders. And we have an enormous amount of numbers to say before and after the automation. The efficiency increases, the red tape goes down, the transparency increases. It’s good for small traders. And we are increasingly also introducing AI and the machine learning, especially for risk management and selectivity. I think as you mentioned, Angel, that if you have lots of data, you can do lots of things. I think this is also, Sahil, a point that you raised. So we are introducing AI and machine learning for risk management, selectivity, and all that. And we also have programs for e-business and e-registration solutions. We have an e-trade portal. It’s like a one place for the exporters or the importers to go and see what the enormous amount of work they need to do to get their goods. So they have increased transparency and predictability of these regulations that are stuck in the 19th century. That’s just, Yasar, you mentioned. But what we are now starting to work on, the environmental footprints. There are no methodologies for this. So we are developing methodologies, for example, to try to see what happens to the… the use of paper, number of trips for clearing goods, idling trucks at the border, and what are the implications when you automate your systems. And this is a work in progress. In fact, my colleagues are now developing a calculator for the ease in developing countries to calculate how much they save the earth. Now, in Timor-Leste, for example, customs automation reduced more than 15,000 kilograms of carbon emissions since the automation went into effect. And just issuing one electronic investment certificate, just one, an e-investment certificate, allowed for 95% reduction of the number of trips between customs and the investment authority and a 95% decrease in paper. And then in small countries like Vanuatu, just making it e, the sanitary and phytosanitary applications submitted to the single window, the reduction of paper use was 99%, just like that. And the trips to the customs and to all these other places was 98% drop. So these are all good. So it’s just that for the last 40 years, we never called them trade tech, because it’s a new thing. And we didn’t even call it digital platforms. So I want to commend the efforts of UAE and WEF to create this regulatory sandboxes and incubators. But as you do this work, I just want to give the three points of reality checks. While we find that trade tech can certainly help, sustaining solutions on the ground is something else. It’s not just the technology. There are many other things in play. So I just want to give you three things. I think we always think, ah, there’s no electricity in a lot of developing countries. electricity failure, internet failure, they all can be fixed. You know, this is for we are in 39 least-developed countries. These things can be fixed. The technology part is fixed. But extremely important to have the political buy-in to trade tech solutions. And especially if you are attempting to digitalize efforts of supporting governments, it’s extremely from the day one, you need a champion in the country. The trade minister, the prime minister has to be a champion. In Rwanda, it’s an amazing case for trade tech and also for tech to take hold because it is a precedent. I said, I want the country to be digital. It’s a presidential decree. So the first single window that we established was in Rwanda. And it was because of, you know, that championship. And I think we also, please, ensure that your solutions have a component of training IT staff to adapt the system. Because you cannot have a one system, just here it is, and now you, you know, take it on board. It will not work. You need to adapt the system to the country’s needs. That means you need to be in the long haul training IT experts. And in our experience, what we find is when you train IT experts, they just leave the government or they just totally immigrate to Australia or someplace. So you have to use the system. Or Canada. Or Canada, where I come from. Or Australia. That’s true. Yeah. So that’s a long haul. That’s you need to, you cannot give solutions and move away. And then, please, the other thing is that, you know, I mean, we need, the countries need to own the solutions, tech solutions, if the tech solution has to be sustainable. So when we, I mean, for us it’s a bit easier, for the UN, because we train IT staff, we adapt the system to the country’s needs. and we hand over the source code. So it is not untied single window. It is Rwanda single window. It is Uganda single window, Angola’s customs automation program. But of course, in a private sector situation, you cannot go around and handing over source code. But you need to do these other things. Be aware that you need to be on the ground for the long haul. You cannot do systems and move away. Now, I think, Yasar, you talked about the cross-border issues. I mean, these are big. I mean, many of the work that we do, this is the automation, automating the domestic systems and national systems. And some talk to each other in the Comesa region, some sub-regional set up in Africa. But the big problem, as you said, is the data, cross-border data, big cross-border data governance issues, who own data, who have access to data, who owns data, who create intelligence out of this data, who make profit out of data. It’s a big issue. So the data governance is just out there. And there’s no solution, as we are. 19th century, we didn’t have that issue. So we don’t have anything to do with data governance. So I just want to stop here.

Moderator:
Thank you, Shamika. And I think this really nicely leads us over to the scaling of the sustainable technologies. So we heard a lot about that we have to make the reality check on the ground. I would like to hear from you, Jasper, the role of trade tech hubs like the UAE sees themselves. How could they enable and piloting new tech, but also taking into the consideration the points that Shamika just mentioned?

Yasar Jarrar:
Well, I would like to react to those notes first. And then I’ll mention the role that some place like the UAE, a place like the UAE, where a trade hub can play. One is that. I completely agree with you on everything you said. I think the challenge for us is they say all politics are local and by definition all trade is cross-border, right? So we can optimize as much as we want within one border. If we don’t figure out the whole cross-border issue, trade by definition is going to stall. So I think that’s a big challenge and I don’t really know where to start. In fact, some of the conversations we had with Sean and the team and Enes here in this building two days ago was where is this best discussed? Is it a trade issue? Is it a global digital connectivity issue? Is it ITC? Is it the UN? Where does governance of world infrastructure, data governance, cross-border transactions, because cross-border data transaction governance is not just a trade issue. It has security implications. It has so many other things. We saw in COVID how it’s a health issue as well. So where does this get discussed? And that’s something we’re all trying to figure out, I think, and start moving later on. The second thing, I’m struck more and more by this issue of skills. We heard, not just now from Shamika, but we heard from others, Erica from U.S. Steel the other day was saying, look, we have the technology for decarbonizing some of our steel, but it’s going to take us a good 30 years to retrain our stuff. Right? And we all saw this in a very microcosm of our companies when we all installed ERP and we got the Oracles and the others and we spent, you know, millions, if not more, installing a new system only for our employees to spend the next five years downloading ERP, uploading it into the Excel sheets that they’re used to, and it took about double the time to get people up to scratch. So there’s a whole lag there. But then, so what’s the role of places like the UAE, I think, being a trade hub? I think we’re connected to about 200 countries in terms of trade. We’ve got one of the busiest, top five or top three busiest ports in the whole world. We have logistics, air logistics, you know, Emirates Airlines and, you know, some nuggets like one in 20 vaccines flown over the world. overnight. It went through Emirates, right? We had to immediately set up a cold storage facility and we, you know, before you know it. So the one out of 20 vaccines thrown over the world just shows the agility and the speed that we are able to do. We didn’t have that facility for, you know, vaccine transport then, but it was. So a place like Emirates is a hub. It’s connected. It lives for trade. So I think it’s a great sandbox. Having the agility to produce regulations very quickly. The Dubai Customs Virtual Corridor is at best I would call a sandbox. We’re trying it out. There’s a couple of countries who are happy to try it out. And we issued the logistics passport trying to minimize, you know, paperless exchange of information. So there’s the ability and appetite to try these new things and say, look, we’re happy to try this out now if somebody has a great idea on the India-Dubai trade economic route. And if that works out, maybe others can adopt it. I think it requires a lot of agility because the question that is always on our mind and my mind when we discuss these things, and let me see if I can frame it more eloquently than my mumbling here is, you know, how adaptable are our regulations? How fast can we adapt regulations? We established something in the UAE under the Council of Ministers called Reg Lab. And it’s basically a regulation lab. And we were trying to experiment of new things that we think this is a great idea. Technology companies or MERS comes up to us and say, look, we’re operating in Dubai ports or Jabari and we want to try this out. And we look at our regulations and we think that’s not going to work. And if the idea is so good that the technology partner can show the benefits, which they have so far, the country now is very happy to issue a one-year temp regulation and say, play this out. It breaks all our rules, but we’ll give you the legal cover to do this and collect data with us. So it’s a regulation lab. And after one year, come back with the data. And if you actually did save 30% on this and 50% on that, Well, it would be very silly not to change our regulations for that. But because of the speed of technology and people like you moving, we simply can’t rely on our normal regulatory process to catch up. There’s just going to be a huge lag. We regulate things after things go wrong, right? We regulated drones after drones started stopping flights in airports, not a second before. And so we’re trying to be ahead. So I think it’s a global trade tech cross-border sandbox. I think I just made that up. But I think it fits what we’re trying to capture in the whole panel. And I think that’s what the UAE can bring and hopefully will engage with everyone to do on trade tech, specifically with the COP28 coming up in the UAE. So this nexus of trade tech, environment, green supply chains, just the momentum is just building up so fast that hopefully we can continue this conversation there with some of you.

Moderator:
Thank you, Dr. Jassar. So we’ve heard about your scaling efforts at the country level. Now looking again into the international level, and this is again for Shamika, UNCTAD as being the UN’s focal point for trade and development. In your experience, how can trade tech help to become more efficient, green, and inclusive for trade?

Shamika Sirimanne:
We have a report called Technology and Innovation Report, just came this year, 2023 March. We analyzed 17 frontier technologies, looking at the same four IR technologies that you talk about, AI, the 3D printing, Internet of Things, robotics, blockchain, and so forth. They represented about 1.5 trillion U.S. dollar market last year. and we predicted that it could grow over to 9.5 trillion US dollars by 2030, which is a jump of six times. And this is probably a vast underestimation because these technologies move very fast. So as you said, the AI, machine learning, big data analytics, they provide better predictions. Sahil, you went on talking about the network, you know, the effects and the predictions. They can help improve reliability, traceability, reduce delays, better risk management, provide predictive maintenance, optimize material use, reduce waste. I mean, really, there’s so much you can do. So some of this work that we are doing. IoT, I think one of you mentioned, the data collected from online connector center, you know, sensors, GPS tracking system can optimize, again, logistics, significantly reduce carbon emissions. I mean, this is a big game. But let me, I’m sorry that I’m always putting a damper after saying all these things. Let me also say, so in this report, we also said we did a readiness index, you know, who are ready to benefit from these technologies. So we assess the ICT infrastructure, the skills and R&D, industrial capabilities, finance, into this, you know, mix. And we look at 166 countries for which we have data. Of course, who comes up? First, the U.S. First, followed by Sweden, Singapore, Switzerland, Netherlands, Korea, Germany, and the list goes. And we find especially African and Latin American countries at the very bottom of the list. For example, in Africa, the highest ranking country, South Africa, which ranks 56th place, Tunisia 66th, Morocco 70th. So that’s the situation. And I will not even go into the least developed countries. because they are off the list. But one of the things, the good thing is, we also find it’s not just how poor you are, how rich you are, but also how consciously you make policy. So for example, we find that the countries that have made deliberate policy changes and made critical investments, they have managed to vastly outperform in rankings and compared to their GDP per capita, for example. Now, India remains the greatest over-performer, ranking 67 positions better than if you just look at their GDP per capita, and followed by the Philippines, jumped 54 places, the gap between their capabilities and what they do, and the Vietnam, 44%. And all these countries, and we went deeper and deeper into these countries, what exactly did they do to over-perform? So for India, it’s the R&D and ICT capabilities, the skills development, the Philippines and Vietnam, because of the industrial performance, the FDI in high-tech manufacturing, particularly electronics, and they have created this enabling environment for multinational companies to come in. So the good news here is things can be done, even with great difficulties. And the policies matter, governments matter. So maybe that’s the good note.

Moderator:
Thank you, Shamika. But this also means that it’s about collaboration and wider collaboration to help adopt these technologies. So maybe going back to you, Sahil, what are your thoughts on the question of how can the wider collaboration help adopt those technologies at scale? Thank you.

Sahil Kothadia:
Collaborations is a cornerstone of every supply, within the supply chain ecosystem, right? If supply chains and the ecosystem does not collaborate, then you don’t get exchange of information, exchange of data. And that then leads to a siloed of processes culminating into when disruptions occur, then they have a massive impact, right? And so, and again, one of the things that we look at is how suppliers can collaborate on providing data and information right up the chain to their customers. And sometimes that creates an impediment, like, for example, some of the, if the supplier is based in an EU, then GDPR comes into, generally would, that is one of the causes of concern then they have to basically get all of the legal involved and so on and so forth before they are able to even provide the fact that this is their site location in a particular country in Europe, because that data is going to be stored in a cloud somewhere in the US, right? But having said that, having said that, over the last 12 years, what we have seen is companies are ready to collaborate, ready to share information, right? Because once they start sharing data, A, you get an understanding, as I said previously, of the network, how complex or how simple the supply chain network is. That then gives you an understanding of how to optimize some of the transportation and routing. Logistics can be optimized. You can do scenario planning, right? You can do a what-if scenario. This all is dependent on how collaborative the entire ecosystem is, without the collaboration between companies, small and big. Their customers, the suppliers, that the entire chain depends on the customer or their final product. If they are able to do a what-if scenario, taking in, collaborating with their suppliers, then they will be able to better manage and organize and make the supply chains greener and more sustainable. Again, collaboration will lead to risk-based inventory management. You don’t have to look at investing in inventory for, say, 20% of the suppliers where there is 80% of spend. What you should be doing is you should be looking at your entire supply chain and understand the risk, understand where you are sourcing what from where. That way, you don’t have to basically then lock in your investment in those 20% of the suppliers. You can distribute your investment across your entire supply chain, therefore optimizing the cost of managing risk, which again goes into, as they say, every little helps. If you are able to optimize the risk, then you are contributing to that sustainable supply chain and a greener supply chain. So, yes, collaboration is the cornerstone within the supply chain ecosystem. Thank you so much. It’s also good to hear that companies are ready to share data, but it’s really good news. Well, yes, but it takes a lot of effort and eventually they come around, right? It takes a lot of effort. It takes a lot of education. It takes why this is required because a small mom-and-pop shop does not really understand. They are far disconnected from the bigger manufacturers, but once they understand that, then yes, they are ready to collaborate and contribute to that.

Moderator:
That’s good to know. Angel, in your opinion, what do you think are the barriers for technology to be used at scale?

Angel Donev:
It’s a fascinating question. I spend a lot of time thinking about it, right? Because, and I’ll repeat it, we don’t have a technology problem. Clearly, the technology is there. We have all the technology that we need. We don’t have a technology problem. We have a change management problem, right? And the change management goes into aspects, right? We spoke briefly about policy and briefly about people. But those two elements we need to really solve for. And honestly, the number of hours that I have spent thinking about it, look, what examples we can take, where we can learn where we have actually managed to crack this problem. And the only example that I can come up, that comes to anywhere closer to what we need to do here, is the rollout of the Internet. Like, if you think about it as an example, how did it work? Like, how did it, it started with a few universities connected, but now everybody’s connected. Right? How did this happen over the last 20, 30 years? What we can learn from there? And I think there are a couple of things that we can learn from there. First of all, is you need to have incredibly well-defined standards. Like, we need to unite behind a standard. Like, if you think about the Internet, those were how the IP addresses work, how the DNSs will work, and the basic technology standards around this. Published, agreed by a few, small group of people, but very well thought through. Right? To cater for the different cases. Okay, we have the standard. And what’s the second problem? The second problem is you cannot dictate globally. You cannot say you all need to get there. This doesn’t work. The Internet provided flexibility for this. It allowed everybody to connect on their own time when they were ready to do so, the next university, the next country, the next station, whatever it was. There was no centrally mandated thing that you need to roll out, neither the benefit of the technology was limited on the extent of the network covered. Everybody that was connected started benefiting immediately from the increased connectivity. And the benefit case was 1000x, so it outweighed any decisions or hassles and barriers and people were motivated to do so. And honestly, this is the only example where I can think of how we can approach this global trade tech problem at a scale. And this will solve, I think, part of the how, right? Then the change management on the ground that needs to be executed should not be neglected as well. I’m previewed to some of the, like you said, the legislation of the 19th century, I think goes even further back, like the famous Bill of Lading. Change management is a good example of this. We need this legislation, but the legislation goes to so many different parts, like even if you take the unions in the US, right? How do you execute change management on the process of executing of the terminals? And this is like a presidential topic. It cannot be solved in one state, like it’s the whole United States. And it takes years to negotiate and change those things. And that’s what I’m saying. We need to figure out how every incremental connection to this global internet or global trade creates additional benefits so that we can decouple those constraints. Because if we wait for them to be lifted to make it work, it will be always chicken and yak problem. And last but not least, I think it will start from something small. It will start from a sandbox. It will start from few people connecting and creating outweighed benefits to what they see by using this network and thus creating incentive and exemplar for others to connect and do the same.

Moderator:
Thank you, Angel. That was very interesting insight. Obviously, when we are talking about green supply chains, we also have to touch upon regulations and emissions. So we have to look into this as well. Maybe, Dr. Jasar, when we discuss the role of government regulations, how can we close the gap between the tech disruption and the regulation phase?

Yasar Jarrar:
Well, I think that’s an unbelievably hard question we’re all trying to answer here. But I think there’s a bunch of things that the governments can do, and I think they are doing now some. Governments are very good at saying no, so preventing certain things from happening, which when there’s a danger to society, the governments have to look after their society, their national interests. And that’s sort of what’s been happening so far with a lot of technologies. But now we’re seeing interventions by way of incentives are moving forward. So this whole idea of people coming together through COP and putting incentives, carbon pricing, we all have nationally determined contributions, the NDCs. So governments are setting a sort of target that whether we like it or not, as companies or individuals, people will have to work toward that target. It’s not there yet. Enforcement is not there yet. God knows the stock take this year in COP28 will show that, bar maybe a few symbolic ones, we probably missed every target we set in France. But, nonetheless, governments can set incentives and targets, and people work towards that. I think the next version of this would be what you were talking about, Anjali, which is creating the benefits case. I mean, incentives are only so good—we all know people have taxes, but we all know people who avoid taxes. You could have carbon prices, and we saw the Guardian the other day covering these carbon certificates that 90 percent of them are worthless or something like that. So the incentives and the sort of punitive measures to push people towards change aren’t the best way. The rollout of the Internet is a great example, I think. I will quote you, but I will steal that example as well. But I will quote you. I think it’s because the benefits were 1,000x. When the benefits statement starts outweighing—and that’s what probably governments and maybe, like you said, sandboxes and places like that—if we show benefits of 1,000x, then there’ll be a FOMO, a sort of fear of missing out rollout here. We can’t not be part of the state system. If we’re trading between us and Ethiopia and India and saving so much money with shipping lines and doing it much faster, then everybody else would either be left behind, and nobody wants to be left behind. So I think the benefits is where we have to double down. Governments like to put the incentives and the punitive measures and the targets and the pricing, which are good, and I think it’s not either or. We need both. I don’t think we have figured out how to really expedite these benefits. Like you said, I think it takes one or two cases from the great work you’re doing. You can take three cases and say, look, they’ve saved 50%, they’re all better off now, and the system is available. I think while this session is about trade tech, your point is tech is not the issue. I think it’s almost everything else around tech that we have to figure out. Tech is there, and tech will continue to be there. Data providers, companies will. So I think that’s the question. So I think we’d love to discuss the benefits system instead of the punitive system. I don’t have the full answer yet, but I think these kind of… the kind of discussions that with something will be born out of it

Moderator:
thank you so much i think there is a still room for this discussion maybe not in this panel today but uh… i think it still interesting to focus on that uh… file on the topic of g h g and the scope re-emissions what do you think should companies be thinking about when it comes to the scope re-emission

Sahil Kothadia:
that’s a massive question for uh… a tech company to answer but uh… i’m going to try answering that question i mean again uh… g h g is that is a very crucial topic and i i was in the forum uh… in munich uh… to be a forum in munich on uh… or a resilient and sustainable automotives uh… value chains right and that there was a discussion on uh… how emissions and how the whole value chain should be looking towards uh… uh… producing greener steels and so on and so forth but few things that uh… companies could consider uh… with regards to scope three is uh… they should basically understand uh… that uh… the categories uh… of scope three for example uh… where they are purchasing their goods from what goods they are purchasing uh… and services as well uh… transportation uh… distribution and distribution waste management right uh… even to the extent of understanding business travel uh… employees commuting to their uh… work uh… workplaces right all of the they should understand the categorization and and by the way they don’t they don’t need to boil the ocean they have to start somewhere focus on some of these things that they can work with and then start doing that and and then what they should do is they should basically look at uh… supplier engagement and collaboration as uh… again that that’s again a very very big point engage uh… with the suppliers right uh… to collect their data for for for emissions and work collaboratively with them. If the supplier is small and if they need any support from a bigger manufacturer, support them in any shape or form that they can to ensure that that supplier is able to contribute towards a greener ecosystem, right? Again, supply chain optimizations, right? When you map your networks of your supply chain, then as a company, you would basically look at whether you can start looking at scenario planning of supply chain A versus supply chain B, and once you start doing that, you get an understanding of which is the greener of the two or three supply chain options that you have. And that’s another, I mean, again, changing supply chains does take time, but if you start, then you can put in, say, tactical and then strategic measures to ensure that you have a better control on GGs, right? Again, set clear boundaries in your value chain, i.e. you look at, you should be looking at how far up the supply chain, do you go right up to the raw material extraction or how much down into the supply chain that you go, i.e. disposing of your products, right? So all of that has to be considered as well. But again, all of this, again, there are think tanks who are working on this, but again, for a company like Resolink, we believe that as long as the companies are able to effectively collect data, and one of the other, collect data and report on that, that is the start of ensuring, that is the start to contribute to better control on GHGs, right? And the last but not the least, regulations. Personally, I believe that there are too many regulations, too many reporting formats that companies have to go through, and from what I have heard, it is too much of a burden for them to be reporting in multiple formats, multiple reporting structures, and so on and so forth. And the other thing that we have been hearing is that within companies themselves, the sustainability group is disconnected with the people who manage the operations. And that, to me, is a key. Sustainability people within the organization should be very well connected with the people who manage the day-to-day operations and the manufacturing to be able to effectively control GHG.

Moderator:
Thank you, Sahil. So you spoke about the burden of reporting, which I think also comes clearly at a cost. So greener supply chain at a cost, are the participants in the ecosystem and the clients ready to pay the bill? Angel, what is your thought on that?

Angel Donev:
I think the wind is changing for the positive. What evidence do I have is around 2% of all the cargo that we carry already is prepaid on alternative fuel sources. So it’s not only about words. People actually give their money, and this comes at a 10% premium compared to a normal rate. So people started voting with their wallet rather than just words. And you can see it from the actual bookings that people place and what kind of fuel choices they make. The other big evidence is that you have companies like Apple, like they announced their new products the other day. The level of emphasis on carbon neutrality and so on was huge. It was the first time that they go that big. One could believe that they do it out of the goodness of their heart as an enterprise. The other is that they are very good in tracking the consumer sentiment, which means that consumers around the world, especially in more sophisticated markets, more profitable markets, are starting to put in actual pressure, make consumer choices based on evidence, brand awareness, brand positioning against their sustainability initiatives, sustainability posture, environmental care, and so on. This will definitely help. It will take some time, and I understand that all consumers are not privileged enough where they can make a choice to pay a premium to source goods and products that they have being produced sustainably, but some can, and this is one part of the equation. The second part of the equation goes against the policy. There will be a need for some penalties and carbon taxes to drive change at scale and to even out the playing field, and this year, like what the International Maritime Organization did and committed to, the terms are not clear, but it was a big step. It was a very big step, and the sooner we do it, the sooner it will start being implemented. No mistakes made. We as consumers will pay the price. Everybody will pass it down, and there was a BCG study a couple of years back. which was saying that the total cost of consumer will be uplift of like cost of living with around 4%. So when you break it down to a consumer level, I don’t think it’s like nobody likes increasing their expenses, but it’s not a deal breaker.

Moderator:
Thank you so much, Angel. I think we are almost running out of time, so I can just allow one sentence.

Yasar Jarrar:
One sentence about it. I think the issue of 4% uplift in cost should be touted a bit more, because I think this is not a consumer uplift. There’s almost an insurance against the coming future. I mean, if you see what’s happening to our world and the heat and the floods, it’s a very, very little price for insurance for a better future. So I think we should fix the narrative. But what governments can do with that 10% premium, I just wanted to mention that Director General Ngozi on day one opened the chat by talking about government procurement, which is about anywhere between 13% to 20% of global GDP. Governments can switch their procurement standards very quickly towards everything green, right? They can have a 10-year plan to absorb that, and they can negotiate better rates and better premiums, because if you get the scale from governments, then you probably will put a smaller premium. So I think government procurement can, you know, the law of diffusion of innovation, can just literally take us out of the 15% overnight if they decide to. So maybe that’s an area where Ngozi called for, but we should all end on reminding ourselves that governments can literally take this to a breakthrough. So you got excited about that, so I had to show you that.

Moderator:
Thank you, Dr. Jasak. No, but Shamika, I saw you also would like to comment, and the question maybe for you is also then, how can we find the balance between achieving the sustainability, but on the same time also accommodating the special needs of developing countries?

Shamika Sirimanne:
Thank you. I mean, we all know the nature of these technologies are that they are all digital. Because they’re digital, they move very, very fast. They combine. They create new things. They move very fast. So the windows of opportunity for many developing countries is very small. So you need to jump in when the windows are open. And they are open for a very short period of time. So two things. One is it’s very important to have this sort of a conversation about trade tech. So I’m very happy that you have it. I’m very happy that you’re working on the sandboxes, incubators. But please share these. And I know we have a Trade Facilitation Innovation Day starting next Monday, 19 to 20 September. We jointly organize this UNCTAD and the Global Alliance for Trade Facilitation. So I invite you, good ideas, showcase the sandbox things that you do, the pilot showcase. The second big point for developing countries and for everybody is that this issue that we all raise is the data governance, the cross-border data governance. This is the elephant in the room. And this is why we could not sue the e-bill of landing. It did not fly. Because when it comes to cross-border data, there are many issues of who owns the data, who have access to data, who makes intelligence out of data. Because they’re the ones who are going to profit from this data driven economy. And as you said, Yasar, cross-border data is not just a trade issue. It’s a human rights issue. It’s a climate change issue. Like when we saw that the COVID-19 vaccine was developed, that immediately the gene, genome of the virus was shared among vast numbers of scientists. And that’s cross-border data. So there’s a lot of development, social angles when it comes to climate change, the predictions. So you need to have a whole governance system. What we now have, we have the US. system of governance, but basically led by private sector, and you have the GDPR, very much the human, you know, the people on their data. And then in the middle, I mean, on the other side, we have the Chinese governance system. It is very much the public sector driven. And we need to build interoperability. They may not change because they are, these governance systems are based on their political systems, their socioeconomic aspirations. They are not going to change, but we need to build interoperability into these various governance systems. And that has to be done in a much bigger scale, and it is not just a trade issue. So here, I’d like to invite all of you to come to UNCTAD’s e-week, which is happening in December, 4th of December, and there will be a conversation around data governance. We will have the tech envoy from the United Nations descending here, the digital corporation, the digital corporation that will take hold here, so there will be a lot of discussion about data governance. So I do invite you to come because it has to be a global conversation to build interoperability to different systems. Thank you.

Moderator:
Thank you, Shamika. And I think these were really interesting last thoughts. Maybe from each panelist, also of the interest of time, maybe in one sentence, what should be the priority to advance trade tech for a greener supply chain and logistics? Maybe you start, Shamika. Thank you. And maybe Andrzej.

Angel Donev:
Yeah. I would say it’s really hard to pick one thing, right, to make progress, but I think we need to feel around policy that evens out the playing field for everybody.

Sahil Kothadia:
I think policy and regulation should make an even playing field for policies and regulation. I think that should help. That’s where the focus should be.

Yasar Jarrar:
I think you’re seeing blank stares from all of us because it’s a really tough question, but I think this is probably the only, you know, in recent history, the only place where I think the public’s private sector is far, far, far more advanced in what they know and what they do than the governments. So I think this is probably the time to establish some sort of public-private regulatory global body. I think keeping the private sector out of global meetings like this is quite, I think we are so behind what they’re doing. If Google and SAP and others were actually the CEO sitting here, they would have, they would be about ten years probably ahead of our conversations. So I think it’s time for a PP regulatory system, figuring something out. I just think it’s about, I don’t think there’s a way out as governments.

Moderator:
Thank you so much. I think this was really valuable and we heard a lot of insights, so thank you all for being part of this panel and I’m wishing you a fruitful day ahead. And thanks for being here. Thank you.