Swift Completes Successful Test of Global Trade Interoperability Solution

Swift has successfully tested a global trade interoperability solution in collaboration with BNY Mellon, Deutsche Bank and four electronic bills of lading (eBL) platforms.

This solution has the potential to revolutionize the use of electronic trade documents, the provider of secure financial messaging services said in a Thursday (Dec. 7) press release.

The digitization of global trade offers numerous benefits, including cost reduction, improved transparency, fraud mitigation, and addressing the trade finance gap, according to the release.

One area that presents a significant opportunity for improvement is paper-based bills of lading, which are associated with delays and inefficient processes, the release said.

Electronic bills of lading (eBL) offer a solution to these challenges by reducing the risk of document loss and fraud, speeding up document transfers, and reducing the carbon footprint associated with paper processes, per the release.

To boost eBL adoption, numerous industry initiatives are underway, according to the release. Around 80 institutions have signed up to FIT Alliance’s “declaration of the electronic bill of lading,” committing to drive digitalization within their industries.

Additionally, the U.K. Electronic Trade Documents Act (ETDA) grants electronic trade documents the same legal significance as their paper equivalents, marking an important milestone, the release said.

However, the lack of technical interoperability between existing eBL platforms remains an obstacle to wholesale adoption, per the release. Each eBL provider has its own rules and customer bases, making it challenging for customers of one system to participate in transactions handled by another system.

Recognizing this challenge, Swift has developed an API-based eBL interoperability model in collaboration with its FIT Alliance partners and eBL platform providers, according to the release. In a proof of concept (PoC) conducted earlier this year, Swift successfully demonstrated that financial institutions could exchange eBL across multiple trade platforms using their existing Swift connectivity.

While the PoC showed promising results, more collaborative work is needed before a production-ready solution can be developed, the release said. Swift will continue to engage with its members and the broader trade industry to address additional challenges in areas such as legal interoperability, technical accessibility, ecosystem-wide standards, and adoption.

It was reported in February 2022 that only 0.1% of original bills of lading were digitized at that time. TradeLens said at the time that electronic bills of lading have been considered the holy grail of shipping documentation.