Inefficiencies in international trade procedures

Trade procedures and related information handling have a decisive effect on the speed, efficiency and reliability of delivery of goods to the buyer and payment to the seller. Complexities and inefficiencies in them create a formidable "invisible barrier" to improved export performance. This is seriously underestimated in most countries. There is nothing inherently too complicated in the systems and procedures for selling goods from one country to another. The difficulties arise in part from the sheer scale of the operations and in part from the vast number of people, interests, nations and languages involved. What may appear as a most elegant solution in one part of this network can often create havoc in another. Paper has been the main medium for carrying business information for over 2500 years. Unquestionably, as many authoritative surveys have shown, this paper-based system is inefficient and costly. The costs arise because of the fundamental inefficiency of the system and through error rates and associated delays in the movement of goods and payment for them.

Those not closely involved in international trade tend to think only of its physical aspects (movement of goods, containers, vehicles, ships and aircraft). Underlying, controlling and regulating the whole of this movement, however is an invisible infrastructure of information handling and exchange manifested by a great variety of documents or their electronic equivalents. The purpose of the information flow is not merely to provide essential data. There is the associated and vital element of timing. The best quality information in the world, which arrives days after the cargo, will still cause acute problems. Such delays can be caused by poorly designed documents, by complex processing or bad management, or by poorly managed communications.