This commentary was written by Nexxiot co-founder Daniel MacGregor. The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.
By Daniel MacGregor
A raft of financial penalties and restrictions have been imposed on Russia at state level to prevent aggression and uphold international law. A number of corporations recently announced they will no longer ship their goods to Russia.
In a world of hyper-connectivity and complexity around strategic alliances, supply chains and global value networks, how will cutting-edge TradeTech be used to monitor and control the actions of states and corporations?
Global manufacturers across automotive, industrial, fashion and technology sectors have quickly responded to the growing crisis in Europe by announcing their decision to cut Russian operations. They will no longer export or import goods and commodities over the border to Russia.
With an outpouring of sympathy for Ukraine across the Western world, those who continue to benefit from their operations in Russia are coming under increasing pressure from investors and consumers. Big brands are scrambling to respond with the right choices and actions.
Active accountability
Many called for a boycott on large food and drink companies such as PepsiCo, KFC, Starbucks and Burger King, which were continuing to do business in Russia. #BoycottMcDonalds and #BoycottCocaCola have been trending on Twitter. Mercedes-Benz, Siemens, Nike and Apple join a growing group of huge brands in announcing they are now imposing trade bans of their own.
How can complex supply chains be better monitored to make sure a border isn’t porous and therefore leaking cargo?
How can companies actively demonstrate to consumers their diligence to abide by stated values and market commitments?
How can manufacturers make sure that shipments sent to China don’t end up being redirected to Russia?
How can shippers navigate the new trade flows required to circumvent blocked overland routes that pass through Russian territory, like the increasingly important New Silk Road?
For every actor and participant in our global value network, there are many questions — but few can provide real answers.
On a more fundamental level, how can humanity make the supply chain entirely robust and able to adapt to all kinds of changing fundamental conditions? How can we make the very structure of the supply chain more accountable and compliant for this scenario of sanctions accountability, and for the many others we will surely encounter as we embark on an increasingly uncertain future?
Can’t control what you can’t measure
The supply chain has already come under intense focus in the past few years as it lurched from crisis to crisis, but now it’s facing a scenario of vast complexity. The Transport and Environment Thinktank released a report this month stating that Russian oil receipts total $285 million a day. With such massive exports of energy in jeopardy, how will this impact global supply chains?
Again, no one is offering much in the way of answers, just more speculation.
Oil and gas are the resources that drive the wheels of industry. Oil and its products are bulky, toxic and hazardous but increasingly valuable. Europe depends on Russia for about a quarter of its crude oil imports with Brent crude prices reaching as high as $139 a barrel.
Oil can be transported easily across borders by rail tank cars and road-carried tank containers, and can be loaded onto vessels for distribution anywhere. How can the provenance of this essential resource be monitored to ensure sanctions are upheld?
TradeTech proves provenance
Sanctions and trade restrictions inevitably result in the emergence of black markets. Ownership, provenance and accountability are the antidote to underground alliances and circumvention of regulations. How effective are sanctions without the right TradeTech to validate them?
The banking world has been revolutionized through the adoption of Know Your Customer (KYC) standards to control and measure the legitimacy of transactions. Now KYC is coming to global trade in the form of Know Your Cargo.
How does TradeTech work?
· Equip railcars, tank containers, intermodal containers, air cargo unit-load-devices and other mobile supply chain assets plus the cargo they contain with robust sensors and data connectivity gateways.
· Link critical supply chain processes and cargo provenance to financial traceability via an independent, authorized digital platform for full compliance and accountability.
· Monitor asset and cargo health and location using Big Data analytics to ensure correct routing, handling, quality, sustainability and compliance to inspections, cargo declaration processes and sanctions.
It sounds simple enough and it really is. The technology and business models are already in place. TradeTech has arrived. It might not be possible to monitor all illegitimate cargo today but by taking steps to “know our cargo,” we can increase transparency to ensure legitimate trade and the value that it creates for us all.
About the author
Daniel MacGregor is the co-founder of award-winning data company Nexxiot. He is focused on revolutionizing the supply chain industry through digitization of mobile assets and processes for smooth operations, sustainability and efficiency. As a pioneer in AI, IoT and Big Data, he loves building multidisciplinary, international teams to drive positive impact for people and the planet.