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Key Trade Documents and Data Elements (KTDDE) and what it means to global trade

 

The terms Digitalization and Standards in the industries of shipping, freight, maritime, logistics, and trade are often met with criticism and skepticism perhaps impeding adoption by many stakeholders..

It would be beneficial to critically examine what some of these terms and initiatives mean and how they can and are benefitting global trade..

In this article, I unpack the Key Trade Document and Data Elements (KTDDE) project by The International Chamber of Commerce’s Digital Standards Initiative (DSI)..

DSI convenes an Industry Advisory Board (IAB) comprising key cross-industry and cross-regional private sector bodies interested and associated with the advancement of digital trade across all regions, sectors, and functions of the above industries..

What is KTDDE and what is its use..??

As we all know, global trade involves lots of documents and data, like invoices, packing lists, certificates, transport documents etc.. While these are used all over the world to execute global trade, they come in different formats which can make trade slower and more complicated in some cases..

The KTDDE project was set up to standardize these documents and data by creating a set of rules so that everyone – from small businesses to big corporations – can understand and use the same formats globally..

This makes it easier for companies in different countries to do business with each other..

This initiative is part of the broader Cross-border Paperless Trade Toolkit, a collaborative effort with international organizations like the WTO, UNESCAP, and UNCITRAL.

Just as English is a common language used in most international communications, KTDDE aims to create a ‘universal language’ for trade documents..

So, whether a company is based in the U.S., India, China, or Brazil, everyone uses the same format for the various trade documents used thereby reducing misunderstandings caused by the use of different document formats..

The ultimate aim is to complete an analysis of all the key trade documents identified in the Cross-border Paperless Trade Toolkit co-published by the WTO, UNESCAP, and UNCITRAL in 2022 and to develop a landscape analysis of digital standards for key trade documents and data to facilitate interoperability across networks and trade platforms..

How does KTDDE work..??

The flow of these various formats and types of trade documents across countries, touching authorities like ports, customs, chambers, and stakeholders like exporters, importers, banks, financial institutions, warehouses, freight forwarders, customs brokers, etc create complexity with the potential to delay trade processes..

The IAB’s KTDDE Working Group analyzes and recommends best practices for key trade documents so that these documents are standardized across the board enabling seamless interoperability..

The key document types covered are

  1. Finance & Payment
  2. Transport & Logistics
  3. Documents of Title
  4. Product-Related Documentation
  5. Movement of products (export, import, and transit)
  6. Duties and Excise documentations

This short video of the KTDDE Working Group (which also features yours truly), explains a bit more..

The recent report published by the ICC DSI in November 2023 presents a detailed analysis of the 14 documents within Batch 2 and updates the analysis for the Cargo Insurance Document, which was originally part of Batch 1 published in March 2023 covering 7 most commonly used key trade documents..

It also includes the creation of the Key Trade Data Glossary and offers an extensive review of digital standards for key trade documents and data across these 21 documents..

KTDDE comes with some key components to assist stakeholders in trade

  1. The Key Trade Data Glossary – A reference tool to align the understanding of key trade data elements across supply chains, ensuring data accuracy and consistency..
  2. Standardized Identifiers – These are critical for seamless data collaboration, enhancing the integrity and efficiency of trade document processing..
  3. Decentralized, Trusted Data Exchange – KTDDE is moving towards more scalable and secure data exchange methods, paving the way for innovation in the trade ecosystem..

Impact of KTDDE on global trade

  1. Provides Clarity and Uniformity – By standardizing trade documents, KTDDE reduces misunderstandings and delays, making global trade more efficient.
  2. Enables Digital Transformation – KTDDE makes it easier for trade stakeholders to adopt trade digitalization, moving away from paper-based processes to more secure and faster digital methods..
  3. Creates Inclusivity and Accessibility – Simplified standards mean that even smaller businesses can navigate international trade more easily, opening doors to new markets.. KTDDE levels the playing field by making the process simpler and more accessible..
  4. Cost-benefit – Reducing the time and effort spent on managing different document formats directly saves money while less paperwork equals lower administrative costs..
  5. Global Standards Compliance – With KTDDE, businesses, and regulatory bodies can ensure compliance with international trade standards more easily.. This reduces the risk of legal or regulatory issues that can arise from non-compliance..

Conclusion

KTDDE is more than just a set of guidelines; it’s a tool to make international trade more efficient, cost-effective, and accessible, especially for smaller players..

By creating a standardized, digital framework for trade documents, KTDDE is paving the way for a more integrated global economy, where businesses of all sizes can participate in international markets with greater ease and confidence..

The journey of KTDDE is ongoing, with the analysis of 16 more key trade documents underway..

The ultimate goal of the Working Group is to launch an interactive online tool for global supply chain data and standards, making it easier for all stakeholders in the trade ecosystem to engage in international commerce..

Stay tuned as we witness this transformative journey in international commerce..


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Hariesh Manaadiar
Hariesh Manaadiarhttps://www.shippingandfreightresource.com
I am Hariesh Manaadiar, the Founder of Shipping and Freight Resource.. I have been in the dynamic shipping and freight industry for over three decades and have worked in several sectors.. I share my experiences and knowledge of the industry through this blog for those looking for help in the industry.. Stay subscribed for more free useful content about shipping, freight, maritime, logistics, supply chain and trade..

3 COMMENTS

  1. DSI is doing great work to standardise commonly used trade documents. However, the process appears to be taking more time than expected. In my view, the repetition of data irrelevant to the type of documents produced by fragmented parties needs to be attended to. For instance, when preparing an invoice, the details in the invoice except for the unit price and the values can be picked up by the system for the preparation of BL. Therefore if DSI first consolidate the data and arranges a way to distribute the data according to the type of document called for in an LC, the process might be quick.

    • Michael, thank you for your comment. The Key Trade Documents and Data Elements working group aims at describing the purpose of key documents used in international trade and identifying the main data elements used to construct these documents. In case differences in standard definitions are noted, the WG will issue recommendations to the relevant standard bodies with the objective to encourage harmonisation. These recommendations will be considered by the standard development organisations following their due process. The data glossary produced by the WG shows the data elements used by document and across all selected trade documents. This resource is available to solution providers, user companies and governmental bodies for transitioning over time from document driven to data driven processes.

  2. SITPRO, kicked into touch by David Cameron’s government in 2010 were way ahead of the curve in standardisation of international trade documentation at the time, having spent 40 years on the subject.
    Its a shame hardly any companies have heard of it today. Hope the ICC has.

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