PortandTerminal.com, April 16, 2019
This article is featured by TheDock & PortandTerminal.com as part of our shared “Innovators in Maritime” series.
The paperwork associated with international trade is unnecessarily complicated, time-consuming and costly. WAVE BL, a start-up out of Israel, is making serious headway in fixing that problem with an application that is as “simple to use as email” according to Gadi Ruschin, the company’s CEO and co-founder. The company he leads is part of TheDock maritime accelerator program out of Israel. PortandTerminal.com had the opportunity to interview Gadi in April 2018.
International trade paperwork is a costly mess
In a joint study, IBM and Maersk tracked the actors, people and paperwork on a shipment of avocados from Mombasa to Rotterdam to better understand the complexity inherent in today’s global supply chain. Their findings, which are summarized in the infographic above, show the scale of the inefficiency for an average commercial transaction.
The IBM/Maersk study also reported that admin and paperwork costs are twice the cost of physically shipping the container itself.
200 million paper Bills of Lading are issued annually. The cost of couriering them around totals $9 billion dollars per year
Banking giant HSBC reported in 2018 that converting all of Asia Pacific’s trade paperwork into digital could slash the time it takes to export goods by up to 44 percent and cut costs by up to 31 percent.
The global trade finance industry is worth around $9 trillion annually which means smart startups like WAVE have plenty of incentive to fix trade’s paperwork problems.
How to fix the trade paperwork problem
At this point in this article, we need to talk about blockchain. You’ve probably heard it mentioned a few times. Blockchain is the solution to fixing the inefficiencies in the global trade paperwork problem.
Blockchain got its name as the tech that underpins Bitcoin, Litecoin, Ethereum etc. It allows digital information to be distributed, but not copied. That means each individual piece of data can only have one owner.
WAVE’s service allows for the digital exchange and management of all shipping and trade-related documents (such as bills of lading, certificates of origin, certificates of inspection, invoices, etc) through a secure decentralised network. That matters a lot.
Once you connect the key players involved in a deal and allow them to electronically share the documents required to get it done with trust, you can eliminate the wasted time and money inherent in the way that avocado deals (and others) are done globally.
Utilising blockchain technology, WAVE’s solution supports trade transactions – a traditionally paper-intensive process – through reduced costs, error-free documentation and fast transfer of original documents. In a Barclays’ pilot to test WAVE’s technology, trade parties were able to execute an export letter of credit in just four hours – something that generally takes seven to 10 days.
“Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.”
WAVE’s solution connects all members of the supply chain, (like the one in our avocado example) to a decentralized network that allows them a direct exchange of trade documents. WAVE’s application manages ownership of documents on the blockchain eliminating disputes, forgeries and unnecessary risks. Trade parties get the document they need quickly, securely and at a fraction of the cost.
Q&A with Gadi Ruschin, CEO and Co-founder, WAVE BL
Why is there such massive inefficiency in global trade finance? Why did IBM and Maersk find that there were 200 information exchanges associated with one simple shipment of avocados?
I’ll begin with the second part of the question, moving avocados is not a simple mission! (smile), it involves many participants from different industries such as forwarders, customs, carrier, sellers, buyers and you will usually have one of each in the port of loading and destination. On top of the above, the “shipment” starts several days or even weeks before the actual on-boarding of the goods to the vessel – booking, shipping instruction negotiations, etc.
As for inefficiencies – it’s not the quantity, it’s the quality – until today, there is no technology which allows the exchange of original documents, not only in the supply-chain but everywhere. Banks, insurance companies, government agencies and many others, are major generators of original documents just like carriers and freight forwarders and for them all, it’s only paper-based. This is exactly where Wave fits into the picture as the world’s first Electronic Courier – as soon as original documents are digitized, all process can be streamlined and the inefficiencies will disappear.
When we first spoke, you talked about WAVE being as easy to use as email. Could you describe what the user experience is like for someone using your technology is like in a little more detail?
Wave is designed to be a very simple service that replaces the need to use paper for any business activity. Wave can be fully integrated to the company’s ERP or TMS, when integrated, it has no user interface at all – just like EDI. Wave can also be used as a complete stand-alone system in order to answer the needs of SMEs or parties who wish to test Wave first before committing to an integration. Using Wave as a stand-alone system looks and feels just like working with emails, but with a small difference: each attachment is marked as original or as a copy for reference – it’s like a mix between email and paper documents. Due to this simple and familiar user interface Learning how to use the system takes an average of 12 mins.
Would you summarize for us the traction WAVE has had in-market already a bit for our readers?
Wave is used today for hundreds of shipments per month by multiple BCOs and freight forwarders in the US, EU, Asia and the middle east. Zim Line was the first Carrier to offer electronic Bills of Lading on the Wave network and soon they will complete their integration and grow to thousands of eB/Ls per month and more. These days we testing Wave with two additional carriers and we hope to share their names publicly soon.
We are big fans of TheDock accelerator program out of Israel as we know you are as well. Would you please describe how TheDock is supporting the development of companies like WAVE in Israel.
TheDock decided to take the maritime shipping innovation in Israel to a whole new level. In order to achieve this goal, they are supporting local companies with all relevant aspects to a startup – mentoring, financially, marketing and much more. We are slightly a more mature company then their traditional involvement stage, so their support is mainly focused on introduction to key industry players, fundraising and more.
They are doing great job!
What are the one or two things we will be hearing about WAVE in the next 12 months or so?
1) The 1M bill of lading was just issued on Wave!!!!
2) Wave saved $150M on document transportation in the last 12 months 🙂
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