For centuries, paper documents such as bills of lading, warehouse receipts, and promissory notes have been the foundation of international commerce. Yet, the sheer volume, estimated at 28 billion documents circulated daily, has become a significant obstacle to efficiency, transparency, and security. This leads us to the need to move beyond these outdated methods and embrace digital solutions.

Deepesh Patel, Managing Director and Editor-in-Chief, Trade Treasury Payments, moderated the podcast and spoke with Luca Castellani, the architect of the UNCITRAL Model Laws on Electronic Transferable Records (MLETR), and Bertrand Chen, CEO of the Global Shipping Business Network (GSBN) and host of The Schelling Podcast about the progress made in trade digitalisation, the challenges, and the practical steps needed to accelerate adoption.

The problem with paper-based trade

Paper documents slow down transactions, increase the risk of errors and fraud, and complicate compliance with regulatory requirements.

Despite advances in digital technology, many sectors within global trade remain heavily reliant on paper, particularly for critical documents like bills of lading.

Bertrand Chen said: “There was a golden era to push for digitisation, and that was with COVID, when it was locked down, as it was an incentive. But if you don’t have this major incentive, it’s actually quite hard to change people. Paper works fine. Why do I need to switch to an electronic bill of lading?”

The challenge of change management

Despite legal clarity and technological advances, widespread adoption remains slow. Change management is the core challenge here.

Many companies and individuals remain comfortable with paper processes, which are perceived as reliable and familiar.

Adoption requires approval from decision-makers and training and support for all staff involved in trade processes.

On this, Chen said, “It’s not just about decision-makers but also about preparing the many players involved in trade to handle digital processes effectively. Capacity building at the operational level is critical.”

“In most corporations, when you have to adopt electronic documents, it’s not a single person making the decision. You need to convince several folks,” he added.

There is always a need to speak the language of different departments, such as finance and procurement, to show how digital trade improves their specific outcomes.

Without clear communication of how digitalisation improves financing speed, risk management, and compliance, stakeholders are likely to be hesitant.

The need to establish legal certainty for digital trade

Legal recognition of electronic trade documents is a must for adoption.
For this, the UNCITRAL Model Law on Electronic Transferable Records (MLETR), which was adopted in 2017, remains critical as it grants electronic trade documents the same legal status as paper ones, providing clarity and enforceability that businesses require.
Singapore, France, the United Kingdom, and China have integrated the Model Law into their legal systems. This reduces legal uncertainty and facilitates cross-border digital trade.
Castellani also noted that the Model Law aligns with other international conventions, ensuring consistency across jurisdictions.
“From a legal perspective, we made a lot of progress, not only because we drafted it, but because it came at the right time, as always, by coincidence. More things in the legal world happened, not by design, but by coincidence. They came at the right time, because the pandemic showed the limits of existing business processes, and that started focusing policy makers on this issue, and eventually, with the G7 endorsement twice, and other endorsements, countries started enacting the Model Law.” Castellani explained.
He also stressed the importance of legal clarity in digital trade, stating, “The Model Law does not change anything fundamentally; it provides a functional equivalent to paper documents, ensuring control, singularity, and integrity of electronic records.”

The solution for digital trade is layered

Digital trade goes beyond switching from paper to electronic files. It improved traceability, regulatory compliance, and supply chain resilience.

Chen correlates the digitalisation of trade documents to the 1950s containerisation revolution. The revolution introduced standard-sized steel containers for cargo transport and made it easy to transfer goods between ships, trucks, and trains. They reduced loading times, shipping costs, and decreased cargo damage, which transformed logistics and supply chain management around the world.

Digitalisation is not about converting PDFs to blockchain tokens. For providers of Voluntary Carbon Offsets (VCO), who help create and sell carbon credits to voluntarily offset emissions, and traders, it tackles important problems. These include issues with traceability, challenges with ESG compliance, the need for transparent verification, and difficulties with financing.

The solution starts with contractual arrangements. By specifying data requirements in supplier agreements, organisations can create a framework for verification and reporting. Most market participants remain unaware of these options or their strategic value.

This approach provides immediate benefits, such as lower costs for verification, easier compliance reporting, increased confidence in the market, and possibly better financing terms.

However, challenges remain due to technical issues, varying standards, and concerns about costs.

On this, Castellani cited the example of New Zealand’s automated export declaration system. The system processed 40,000 declarations without error, saving time and reducing penalties. These practical benefits demonstrate that digital trade goes beyond just replacing paperwork.

The future is collaboration and education

To achieve full digital trade adoption, ongoing collaboration among industry groups, regulators, technology providers, and corporations is a must.

While legal frameworks and interoperability solutions exist, cultural resistance and lack of awareness still pose major challenges.

Digital trade is essential for managing today’s complex global supply chains. Without reliable electronic information, sustainable and compliant cross-border trade is no longer feasible.

The focus must shift from technology and legal readiness to practical implementation and stakeholder engagement. Clear communication of benefits, targeted education, and support for operational change will be critical to achieving the next phase of digital trade.

End-to-end trade digitalisation promises to transform global commerce by replacing inefficient paper processes with secure, interoperable electronic systems. Through sustained collaboration and clear vision, the trade industry can realise a more efficient, transparent, and resilient future.