Global trade is the lifeblood of the world economy, serving as a vital component for businesses, governments, and non-governmental organizations. It possesses the potential to stimulate economic growth, enhance productivity, and improve the quality of life for citizens in nations that engage in international trade.
In the current year, global trade value is steadily increasing, showing resilience after the challenges posed by the COVID-19 pandemic in 2020, which continue to impact us today. According to UNCTAD’s Global Trade Update, trade value reached US$7.7 trillion in Q1 2022, marking a notable increase of approximately US$1 trillion compared to Q1 2021.
To maintain this positive trajectory, the import/export industry must effectively address any factors that might disrupt the stability of global supply chains. These disruptions can encompass transportation breakdowns, price fluctuations, geopolitical tensions, and more. The cornerstone of sustaining the value of international trade, along with the substantial benefits it brings, lies in ensuring the unimpeded flow of goods, products, and services across borders, making their entry and exit from countries seamless.
Technological advancements and the implementation of automation processes have had a profoundly positive impact on the import/export sector. Previously labor-intensive tasks such as documentation, classification, manual inspections, and risk assessments have been streamlined through trade administration portals. This automation technology not only benefits customs officials and governments in facilitating efficient imports and exports but also provides a competitive advantage for businesses reliant on the smooth movement of goods and services for their operations and consumers. This trade facilitation enables government authorities to expedite the processing of compliant traders securely and efficiently.
The industry is starting to see the benefits of AI integration across the digitalisation of the trade ecosystem. An example is the Single Window system that uses Artificial Intelligence (AI) taking automation to the next level. Beyond targeting and managing all areas of import/export processes that used to rely on human interaction – such as capturing data from scanned documents, applying HS Classification codes from commercial descriptions, assessing risks, flagging discrepancies, facilitating payments and more – the Single Window AI applies machine learning to deal with outside factors that may affect supply chains above and beyond administration.
Using the standardised processes (SAFE Framework of Standards provided by the World Customs Organisation – WCO) which most trading nations follow as a baseline, AI is then able to apply localised and geographical legislation into its processes and configurable parameters for the country where the system is being used. This includes national requirements, but also regional and international agreements – such as international trade treaties.
The AI can also react and pivot to dynamic changes – such as a nation exiting a trade agreement, a rise in goods taxation or geopolitical unrest. In such instances, its acquired knowledge can help customs navigate rises in prices, reroute goods through new avenues (due to port or border closures) or apply new risk assessments based on the goods’ point of origin or destination. In extreme instances, data and margins can be manually applied, which then becomes part of the AI’s machine learning’s data bank from which it can draw.
The AI development process is a dynamic activity working in the background to provide all the resources needed to produce solutions.
AI is already powering trade today and will undoubtably continue to drive growth and efficiency in global value chains through the optimization and automation of existing operating models. The evolution of AI-based trade will continue to support countries and firms engaged in trade as they reduce the time, cost, and complexities on trade opportunities.
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