Influencing regional rail through new technology

June 05, 2019 | 14:00
Southeast Asian countries are seeking international co-operation in the field of rail financing and technology in order to boost transportation infrastructure development. Thomas Giglione, commercial mediator for ANT Lawyers, writes about the main technologies that can influence the rail transportation system in the region.  
influencing regional rail through new technology
Thomas Giglione

Asia is seeing rapid growth and urbanisation, and there is an increasing need to develop transport services to match. Rail is an increasingly viable option to meet the demand for both urban commuting as well as long-distance travel.

Technology should be in the hands of a human, but the opposite is also true. Rail transport should be the main mode of transport in any country’s trade market. However, this remains to be realised due to outdated methods which cause poor service and delayed shipping.

The use of technology which includes blockchain, 5G, the Internet of Things (IoT), and online dispute resolution will revolutionise the rail industry and improve services.

Blockchain is usually associated with cryptocurrencies and is used as a financial market item. However, because of its diversity, it also affects logistics in the transport industry by resolving many of the shortcomings it faces. International logistics and trade accounts for more than $30 billion and is becoming the world’s largest economic sector. In addition, 90 per cent of trading is carried out through seaports.

Moreover, blockchain technology can be implemented in the logistics industry to create more efficient output. The international trade and logistics industry are still relying on paper. This causes delayed shipping because of uncleared documents being sent through the courier service. For the same reason this outdated system delays payments, creates late shipping and seaport charges, and interrupts worker salaries. These charges, among others, can be blamed for losses upwards of millions of dollars within the shipping industry.

A recent shipment carried out through blockchain by the US’ IBM consisted of tonnes of oranges shipped to China ahead of Chinese New Year, starting on February 5, and the bill of lading was recorded on blockchain. This document covers everything related to that trade, the reason for shipping, proof of ownership, and the recipients’ details along with other important information about the contract. Traditionally, the bill of lading is mailed to all the persons involved in the trade which can take at least a week.

The IBM trial showed that the electronic bill and blockchain reduced the process to mere seconds, confirming that time and shipping costs via this method were greatly reduced.

With the help of the Shenzhen Municipal Taxation Bureau and Tencent, the creator of social media platform WeChat, the first e-invoice was published in March 2019 at Shenzhen’s Futian Station. So far, these e-invoices account for a total of around $200 million. Once this system is fully launched, there should be about 170,000 self-service invoices posted via blockchain daily.

5G and IoT technology

The emerging 5G will also create an industrial revolution. The technology will account for approximately $12 trillion of the global economy and will create millions of new jobs in the United States alone.

Huawei and Chinese Mobile Company launched a 5G network at one of their railway stations, giving rail passengers easy access to 5G connectivity.

Vietnam’s entrance to this market by making the first call using 5G makes it one of the first countries to test this new technology. The country is also working to deploy this technology for commercial use and for operation by 2020. The 5G connectivity will help improve railway station services based on telecommunications. It will be used for smart track and sensor communications deployed on rail lines, and prepare future cities for smart city technologies.

Online dispute resolution

Meanwhile, online dispute resolution (ODR) was created to resolve matters that arise because of online cross-border online transactions. ODR offers both parties the opportunity to resolve disputes in a secure and flexible format without having to personally meet.

The most important thing which cannot go without mention in any international dispute resolution is the New York Convention, which is accepted and used by over 150 countries. The main purpose of the convention is that parties or countries agree to the terms and conditions while settling a dispute.

In 2010, the UN Commission on International Trade Law commission devoted a group to ODR, implementing technology for dispute resolution. The framework will help new trade relations, create new avenues for international trade, ensure trust and terms between business parties, and will help hundreds of small businesses promote and reach resolutions in an effective manner.

This development, however, has been patchy at best. Certain regions, such as Southeast Asia, do not seem to have embraced ODR compared to blocs like the European Union, for example.

This is in spite of the sustained explosion in growth of mobile usage and e-commerce in the region. In 2016, for instance, the number of internet users and mobile subscriptions in Southeast Asia jumped by 80 million and 62 million respectively.

A new advancement along similar lines is the Singapore Convention, which will be approved by most APEC-affiliated countries except for Vietnam.

Vietnam is not currently represented at the International Transport Forum, a diverse platform for traders, the transport community, and policymakers. Therefore, the country is currently unable to provide evidence on different issues arising through international rail transport.

The participation and inclusion of Vietnam in the Singapore Convention will give more power to the country’s position in the international community. Vietnamese courts will then accept mediation in overseas disputes and foreign traders will be able to participate in the convention.

As a member of the Legal Committee and the Cyber Security and Law Tech Committee of the European Chamber of Commerce, I am personally facilitating dialogue for Vietnam to participate in these two international platforms, dedicated to improving the adoption of these revolutionary technologies to improve cross-border trade through rail transport and to resolve issues using ODR.

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