The UK government’s Ecosystem of Trust is a potential future border model for frictionless trade, which the UK government committed to pilot testing from October 2022 to March 2023.
The pilots made supply chain data directly accessible to the government, used new technologies to preserve goods’ physical integrity and considered how trusted relationships could enable certain controls to be performed by industry rather than the government.
IBM Consulting™ and Maersk led a consortium that included Hutchison Ports Port of Felixstowe, Maritime Cargo Processing, Pure Electric, Quantexa, Westbridge Foods, WM Morrison Supermarkets and other industry partners. The consortium ran a pilot that provided the government with additional supply chain data for 700,000 consignments. Through the pilots, the UK government found that novel, digital, risk-based methods for border control can provide higher quality data and could decrease decision-making time for goods entering Britain by 17%.
Models improve trade for industry and government
The report finds that the tested models can eliminate up to 62% of delays on imported goods that are subject to plant, animal or health controls. The models also reduce private sector customs data collection costs by 40%. Reducing delays increases the predictability of supply chains, which enables further optimization and cost reduction (including the reduction of inventory carrying costs). In addition to industry benefits, access to supply chain data improved government frontline targeting teams’ confidence in their decision-making, helping employees assess risk more accurately and target their resources more effectively.
Defining standards and investing in technology to realize data’s potential
To realize the potential of these models, there must be clear industry benefits to encourage voluntary participation. The Ecosystem of Trust report recognizes that to be truly transformational, the government must work to define and provide border facilitations for scheme users.
The report concludes that the models can’t be deployed at scale yet because industry cannot provide the government with the required supply chain data at scale and in machine-readable format. Furthermore, the government has not adequately determined the most effective ways to use the data it receives.
Successful adoption will require a focus on interoperability, adoption of digital trade document standards, investment in global industry platforms that can make supply chain data accessible and suitable analytics that empower the government to leverage data.