From friction to flow: How deep tech can enable digital trade and strengthen the UK's global competitiveness

International trade is worth around £1.266 trillion to the UK economy and in 2025 the UK exported £927 billion in goods and services combined.

Activity on this scale depends on trade moving efficiently across borders, yet much of the infrastructure behind it has changed little over the last few decades. 

Despite sustained endeavours to digitalise, a considerable proportion of cross-border trade still runs on paper. The documents issued by a carrier to a shipper that detail the type, quantity, and destination of goods being transported, known as bills of lading, get printed, signed, couriered and re-keyed by hand every time they change hands. Customs declarations and compliance paperwork follow the same pattern, whereby an exporter fills in a form, a freight forwarder copies the same information into their own system, and a customs authority does it again on the other side.

The admin burden falls hardest on smaller businesses. Large enterprises can absorb the cost of dedicated trade compliance teams; a growing exporter often cannot, and a single documentation error can leave goods sitting at customs while the paperwork is resolved. 

Most UK businesses now accept that trade needs to go digital. What's holding them back however is finding technology that businesses can trust, and which can connect with the systems their partners and customers already use, to remove paperwork entirely. 

Frictions holding trade back

Some of these pressures have intensified in recent years. Between 2021 and 2025 customs declarations for exports to the EU increased by 26%, with declarations for imports increasing by 20%. 

Underneath all of this paperwork lies several distinct challenges:

• Fragmented data and systems: Information about a single shipment sits across multiple organisations and platforms that do not talk to each other, creating delays every time it needs to move from one system to the next.
• Compliance complexity: Every declaration needs checking against tariff schedules, sanctions lists and rules of origin, often across several jurisdictions for one shipment, while sustainability reporting requirements add a further layer of complexity on top.
• Limited supply chain visibility: Many organisations still cannot see, in real time, where a shipment is, which supplier produced a component, or when a disruption further downstream is about to affect them.
• Global uncertainty: Geopolitical instability and supply chain shocks have made transparent, resilient trade networks more important than ever.

Trade headlines over the past couple of years have been dominated by tariffs, but for most UK businesses moving goods day to day, tariffs are not the biggest source of friction. The barriers slowing UK trade down today are largely operational and to do with how information is moved and verified, and how much of it has to be logged multiple times.

These barriers are well suited to a technology fix, alongside the policy support needed to make adoption easier. 

Why deep tech matters

The technology fix can be enacted through what we refer to as deep tech. Deep tech offers a practical route to overcoming trade challenges. Rather than simply digitalising existing paperwork, technologies such as artificial intelligence (AI), distributed ledgers, digital twins and intelligent automation can fundamentally reshape how trade information is created, verified and shared. 

Artificial intelligence (AI) is the clearest example. A 2025 WTO-ICC business survey found that close to 90% of firms already using AI in trade reported tangible benefits, and three-quarters were applying it to customs-related tasks such as document processing, compliance checks and risk identification. AI can flag the declarations that need a closer look and clear the rest automatically, freeing trade teams from checking every single one manually. 

Distributed ledger technologies address a different problem - trust between parties who do not automatically trust each other. A shared, tamper-evident record lets multiple organisations verify a transaction or a document without a single party controlling it. McKinsey research estimates that shifting to electronic bills of lading alone could unlock $6.5 billion a year in direct cost savings for the shipping industry. 

Digital twins give supply chain teams a way to test decisions before committing to them in the real world. They can build a virtual model of a shipment route, warehouse or supplier network, and then run a scenario against it. What happens if a key port closes for a week? What happens if a supplier cannot deliver on time? The twin shows the likely answer while there's still time to plan around it. 

Intelligent automation underpins all of the above. It absorbs the repetitive data entry and workflow steps that have traditionally required a person. This includes matching a customs declaration to a shipping manifest, chasing a missing document and updating a status across multiple systems, among other tasks. 

From concept to reality: Lessons from the International Supply Chain Accelerator 

Digital Catapult has been testing combinations of these technologies with real UK businesses through the International Supply Chain Accelerator (ISCA). Launched in September 2024, ISCA builds on the track record of the Digital Supply Chain Hub, which has already helped more than 40 startups and SMEs secure over £3 million in funding, and forms part of the UKRI-funded Made Smarter Innovation programme. 

Within ISCA sits the Seamless Trade Across Borders strand, which set out to tackle the inefficiencies described earlier. Backed by BAE Systems, Leonardo UK, BT Group and the International Chamber of Commerce as industry challenge owners, the strand invited UK technology innovators to apply against two challenge areas:

• Standardising and sharing high-quality supply chain data across all participants  
• Improving visibility and transparency throughout export and import processes  

Selected companies received up to £85,000 in funding, alongside the opportunity to build and test their solutions directly with these enterprise partners. 

Here, we look at three of the companies from the programme to show the impact of deep tech in real world trading environments. 

Kavida AI puts AI Agents to work on trade compliance 

International trade and procurement teams operate in a highly competitive environment that leaves little room for error, yet the processes behind it are still largely manual. Customs declaration error rates run at an average of 10%, and the scale of the resulting workload can be enormous: BAE Systems previously spent 71,000 hours a year managing 30,000 shipments. 

Kavida AI, a Digital Supply Chain Hub alumnus, joined ISCA to take on this challenge alongside BAE Systems and Leonardo. Its AI-powered agents automate document validation, match customs declarations and provide real-time shipment tracking, integrating with the ERP and legacy systems these enterprises already run. Working directly with BAE Systems and Leonardo gave the Kavida team a route to real-world testing and expert guidance on regulatory compliance that would have been difficult to replicate independently. 

The support from Digital Catapult technologists meant that Kavida were able to explore integration with legacy systems and best practices in automation, providing the foundations to be able to scale their business. 

The results were illuminating. Manual processing workload dropped to just 10% of previous levels, and trade compliance error rates fell from 10% to under 1%.

Since participating in the ISCA Kavida AI has been acquired by QAD | Redzone, allowing them to scale their vision of reducing the friction between supplier collaboration and enterprise systems globally. 

• Read the full case study.  

Exabler proves its compliance platform in Leonardo UK's defence-grade environment 

Exabler is an AI-powered trade compliance platform built by former international trade and finance professionals. It checks trade documents against hundreds of thousands of historic customs declarations to flag risk and validates data in near real time. Among its existing clients, freight preparation time has fallen by 50%, tax aggregation accuracy has reached 99.9%, and one global freight forwarder cut compliance processing time from three days to three hours. 

Defence and aerospace trade represents a tougher test. Many of the goods involved have both civilian and military uses, so compliance checks carry more weight and less room for error.  

Exabler joined ISCA to test whether its platform could hold up in that environment, working with Leonardo UK. The team built a secure sandbox that matched Leonardo's security protocols and ran more than 100 consignments through it. Staff across procurement, logistics, IT and compliance gave feedback at every stage, which then shaped how the platform needed to work in a defence setting. 

The pilot produced a business case for Leonardo, built from real data collected during the trial. It showed that Leonardo could recover the cost of a full rollout in under a year - fewer hours spent on manual work, more accurate duty calculations, and clearer visibility of which goods need export licences. 

In March 2026, Digital Catapult invested £500,000 in Exabler through the Cross-Catapult Fund to help the company scale, and it has since seen interest from companies globally, with paid pilot schemes planned to further validate and demonstrate how the tool can be integrated successfully into larger businesses that have more stringent security requirements. 

• Read the full case study. 

LogChain runs an international shipment through a single digital record 

A typical international shipment involves around 50 documents and up to 30 different parties. Each party usually keeps its own copy of each document, with no certainty that the copies match. Across global supply chains, over 28.5 billion documents move through this system every year, most of them still on paper or trapped in emailed PDFs. 

LogChain replaces this patchwork with one shared record. Information is entered once and travels with the shipment, instead of being retyped by every party that needs it. The platform connects to the buying, freight, customs and banking systems businesses already use, so nothing needs to be replaced. LogChain AI reads incoming trade documents, pulls out the relevant data and checks it automatically. 

To prove this works in practice, LogChain joined ISCA and ran a live international trade through the platform - a whisky shipment from UK producer Skene Whisky to Singapore-based distributor Six Eight Distribution, handled by FedEx. Every stage, from the initial order through to payment, freight booking, customs paperwork and final delivery, ran inside a single digital environment. That single environment replaced the usual back-and-forth of emails between buyer, seller and courier, and every document produced was legally recognised under the UK's Electronic Trade Documents Act. 

The outcome was significant. Shipment processing time fell by 50-55% compared with the usual process. The trade eliminated more than 20 emails and cut the volume of duplicate data generated by 90%, while new participants could be onboarded onto the platform in under 30 minutes. 

Working with Digital Catapult provided LogChain with a structured environment in which to run live trade flows with real stakeholders, documents and compliance requirements. 

• Read the full case study. 

Creating the conditions for adoption 

Technology alone will not close this gap. Government policy has already started to clear a path for deep tech in trade, and sustaining the momentum here is equally as important as any individual technology. As part of the UK’s Modern Industrial Strategy, the government has committed to accelerate the adoption of electronic trade documents. 

In particular, three things need to align for adoption to scale across UK trade: 

• The Electronic Trade Documents Act gives electronic trade documents the same legal status as paper ones. The government's own impact assessment puts the net benefit to the UK economy at £1.14 billion over the next decade. 
• Smaller businesses need dedicated support to take advantage of the benefits. Government research published in July 2026 found that UK exporter UniSim cut its paper trade documents by 90% and shipment admin time by 50% after digitalising, yet voluntary adoption remains slow among SMEs more widely. 
• Public-private collaboration turns policy into practice. ISCA itself works this way, connecting large industry challenge owners such as BAE Systems and Leonardo UK with UK technology innovators, and is backed by government funding through UKRI. 

Legal certainty gives businesses the confidence to invest, and targeted policy support is critical to smaller businesses getting fully on board. Programmes like ISCA show what that policy backing looks like when it is put into practice. 

Looking ahead 

Digital trade is not a distant ambition. Kavida AI, Exabler and LogChain show what UK innovators are already building, and what enterprise partners like BAE Systems and Leonardo UK are already putting to work in real-world trading environments. 

The countries that make trade frictionless will become more attractive places in which to do business. With the Electronic Trade Documents Act in place, a strong deep tech ecosystem and growing industry adoption, the UK is well positioned not simply to modernise trade but to become a global leader in digital trade infrastructure. What happens next depends on how quickly businesses across the supply chain move from experimentation to adoption. 

The next chapter of international trade will be shaped by trusted data moving as reliably as the goods themselves, and collaboration between exporters and tech innovators through organisations such as Digital Catapult will be crucial in accelerating the application of the advanced technologies needed to achieve this. The UK has an opportunity to lead the way by making trade faster, more transparent and more resilient in the process.