Challenges in International Trade and Shipping Digitalization

Unveiling Challenges in the Digitalization of International Trade and Shipping

The collaboration of international trade and shipping digitalization in the trade industry helps optimise shipping activities, enhancing operational efficiency and boosting the global economy. The revenue generated by using technology is put into updating and refining the existing technology and overcoming the challenges of shipping digitalization. Organizations and companies involved in global trade have sided with the modern means of shipping by integrating technology into their shipping activities. Technology in shipping has facilitated international trade significantly by providing cargo security, minimizing cargo damage, improving environmental sustainability, and enhancing customer service. Let us learn more about the challenges in international trade and shipping digitalization. 

What is international trade and its benefits? 

International trade refers to the cross-border trade between various countries to fulfil the demands of the supply chain. Countries often import resources from other producing countries to supply their consumer market. International trade is the business of exchanging goods or services between countries following the guidelines of global trade. The import and export of goods is facilitated by various modes of transportation, including ships, trucks, rails and planes. In the case of international trade, goods are carried using intermodal transportation, where more than one mode of transport is used for transporting the goods from the origin country to the destination country. Countries can import and export all sorts of goods, including agricultural products, perishables, electrical equipment, pharmaceuticals, and fragile products. Hazardous chemicals can also be exported and imported, but they must confer with the safety guidelines. 

The various benefits of international trade are- 

  • International trade opens opportunities for exporters to conduct business in the global market. 
  • For countries lacking raw materials and finished products on a domestic level, international trade helps fulfil the country’s demands. 
  • Countries develop and grow together economically when they have healthier trade relations. 
  • Consumers receive improved quality goods at better prices. 
  • Countries with surplus production of goods export them to other countries that require the goods instead of wasting valuable products.

What is digitalization in the shipping industry? 

The shipping industry can be understood in terms of the maritime sector or shipping via other modes of transport such as trains, trucks and planes. Digitalization refers to using modern technology to optimize business models, make them more systematic and enhance operational efficiency. Digitalization in shipping helps streamline various shipping activities, including logistics processes. The goal is to make the shipping industry environmentally sustainable, improve revenue generation, and increase shipping transparency to enhance customer experience. The shipping industry, including the maritime sector, integrates various technologies, including artificial intelligence, digital twins, automation, blockchain, and electronic data interchange. international trade and shipping digitalization are being brought together to optimise the supply chain operations and facilitate better management. 

Benefits of digitalization in the shipping industry 

The importance of digitalization in the shipping industry is due to the multiple benefits it has to offer. 

  1. Improves operational efficiency– Shipping activities using technology and digitalization are more reliable than manual handling. Integrating technology in the supply chain helps minimize delays, reduce supply chain disruptions, and lead to more efficient operations. 
  2. Better revenue generation– When shipping activities get streamlined and optimized using technology, operational efficiency increases, leading to better management, risk mitigation, and waste management in various maritime and shipping processes. It helps in cutting down unnecessary costs and benefits in better revenue generation. 
  3. Ensuring cargo security– Technology is maritime, and shipping is used to track cargo inside shipping containers during transit. It also helps in risk mitigation, optimizing shipping routes, and offering real-time data to shipping parties. Transparency helps reduce risks of cargo theft, tampering, or loss during transportation and handling. 
  4. Environmental sustainability– Carbon emissions during shipping are the primary concern of the maritime and shipping industry as they impact the environment and humans. Digitalization helps the shipping and maritime sector by optimizing routes, which leads to reduced fuel consumption and minimizes shipping emissions.  

Main challenges for international trade and shipping digitalization 

International trade is a union between various countries exposed to multiple challenges. A few challenges in international trade are-  

  1. Trade wars– Countries often impose protectionist measures on their partners by increasing tariffs or trade restrictions. It can lead to supply chain disruptions and cause delays in shipment.  
  2. Trade expenses– Heavy trade tariffs, import quotas and regulatory restrictions can hamper the free flow of trade across borders. It increases the import-export costs and even leads to limited movement of goods across borders. 
  3. Geopolitical crisis– Political tensions between major exporting countries can be a significant reason for geopolitical crises in shipping, which can lead to economic crises and supply chain disruptions on a global level. It is uncertain; therefore, it impacts importing countries immensely. Trade routes may also get diverted, leading to additional costs. 
  4. Language barriers– Global trade involves various countries, which leads to cultural and language restrictions. Any miscommunication between trading partners can lead to mismanagement of shipment. 
  5. Environmental concerns– Shipping and maritime activities release a significant amount of carbon emissions, harming the atmosphere and leading to an increase in greenhouse gases. Increasing global awareness regarding environmental concerns and sustainability in recent years may lead to stricter regulations that impact the trade of products perceived as environmentally harmful. 

Challenges in shipping digitization  

Although there are numerous advantages of digitalization in shipping, the trade industry cannot overlook the challenges of digitalization. 

  1. Cost of investment– The initial investment of integrating digital technologies and systems in the shipping industry requires significant investments in hardware, software, staff training, and upgrades in the infrastructure. Companies find it difficult to integrate multiple technologies, which restricts their operational efficiency. 
  2. Cybersecurity risks– With increased dependency upon more systems and devices in the shipping business, the industry has become more susceptible to cyberattacks. It has become challenging to protect sensitive data and infrastructure from cyber threats. 
  3. Data Privacy– Multiple organizations, individuals and stakeholders are involved in the maritime and shipping business. Many sensitive data are being saved and circulated throughout the supply chain. It becomes vital for shipping companies to comply with data protection regulations when handling sensitive information related to cargo, crew, and customers.  
  4. Lack of skilled workforce– Finding workers with knowledge of operating multiple technologies has become a challenge. Training new personnel is time-consuming and will require patience. 

How can we improve international trade using digitization? 

International trade and shipping digitalisation can benefit each other by integrating various technologies into the trade business and using the generated revenue to upgrade digitalisation. Let us learn about the few technologies used in shipping digitalisation. 

  1. EDI– Electronic data interchange is the standardization of global trading documentation processes to eliminate language and cultural barriers. The technology aims to connect shipping parties over the internet and promotes paperless trade. It minimizes delays in receiving and processing orders by providing invoices, bills of lading and other documents over the Internet. 
  2. Blockchain technology– It is a digital ledger that helps keep track of the assets throughout their lifecycle in the supply chain. It also helps secure and legal transactions between shipping parties, ensuring user privacy. Smart contracts are in use by utilizing blockchain technology. 
  3. IoT– The Internet of Things (IoT) in shipping is a modern technology that works by attaching IoT sensors to assets to track and monitor the movement of assets in the supply chain. It is capable of giving real-time information to stakeholders. Inventory management and container tracking are a few applications of IoT in the shipping and maritime industry. 
  4. Artificial Intelligence– The role of AI in shipping is unmatched and significant. AI helps in data analytics to filter relevant insights concerning the performance of shipping operations to optimize and enhance their efficiency. AI-based predictive maintenance in shipping is beneficial in predicting uncertain breakdowns in equipment, vehicles or machines that can lead to delays in the supply chain. 
  5. Automation– With technological advancements, automation in shipping ports and other modes of transport is transforming international trade. Automated trucks and automated guided vehicles are driverless vehicles that can be operated by trained personnel from remote locations. These modes of transport help in reducing manual errors and increase operational efficiency. 

The mutual collaboration between international trade and shipping digitalization helps boost global trade and the economy. 

LOTUS Containers sells and leases shipping containers compatible with maritime and other modes of transportation. We offer a wide range of new and used containers based on the client’s requirements.

Weekly stock report

What we have in stock:

Our news

Always up to date


Good contacts for your business. Network now.