Hello rsquare Community,
In this blog post we will give you a brief overview of the different challenges international trade actors are facing today and what rsquare is aiming to achieve in the future.
Essentially, there are 3 main problems negatively affecting the efficiency and potential growth of international trade as of today:
- Heavy bureaucracy and paper-intensive, manual processes
The paperwork required for a single international trade transaction is immense. It includes many documents ranging from those regarding transportation, financial and commercial affairs, to government and regulatory papers that deal with import and export declarations and the border clearance process. This results in often very long lead times until trade transactions are fully processed and approved while driving up the costs for all participants just for processing and administrating these trade documents. It is estimated that these costs can amount to around one-fifth of the actual transportation expense. Said inefficiency was shown by a test shipment of flowers from Kenya to The Netherlands, which was conducted by a collaboration between IBM and Maersk, and that created over 200 communications between almost 30 different individuals and organizations.
2. High operational costs of trade and supply chain finance
Traditional trade and supply chain finance as operated by banks is often too expensive and not viable for SMEs and small-ticket transactions. This includes but is not limited to such services as obtaining letters of credits, guarantees, and covering costs of risk. It is especially affecting SMEs in developing countries with a higher implied risk factor. According to a white paper on trade and supply chain finance, published by the World Economic Forum in collaboration with Bain & Company, a large part of these underserved SMEs are located in Asia and the Pacific. With only intra-Asia and Oceania trade amounting to already $2,745 billion in 2016, it is clear that there is a huge trade potential locked up through inaccessible financing of those SMEs located in the region.
3. Lack of trust and transparency
The global market for different goods, materials, and resources is often highly fragmented on both the buyer and seller side. This creates an environment where both parties have to invest considerable time and effort into finding a trustable and reliable trading partner. Especially when the vendor is not dealing with a repeat customer it can be hard to find the required information regarding the reliability and solvency of a possible buyer. The buyer is equally facing troubles when it comes to transparency of prices, product specifications and quality assurance.
On the government side, countries often face problems with trade and supply chain documentation connected to smuggling, fraud, drug trafficking, errors and delays.
Undoubtedly, these problems are hampering global trade growth and are creating a serious obstacle for many companies. This makes it hard for them to maximize their profit margins and to exploit new business opportunities. Our goal at rsquare is to help our clients to unlock this huge dormant business potential and to enable them to engage more efficiently and cost-effectively in global markets.
In this nascent sector of the digitalization and automation of supply chain and global trade processes we are positioning ourselves as forerunners of innovation and development, taking advantage of distributed ledger technology, advanced analytics of data, IoT and AI. We are providing them with a trade platform that uses cutting-edge technology to create a solution to the described problems, having everything they need in one place with an easy-to-use interface to create a more direct and transparent trade experience. Rsquare is committed to change the outdated global trade structure and to facilitate international trade and development.
Your rsquare International Business Strategy Manager
rsquare Website: http://rsqr.io
Product Hunt: https://www.producthunt.com/posts/rsquare