Two types

One can identify two types of “edges” or boundaries:

• The boundaries that arise from specific agreements in groups that all use the BDI framework but have specific agreements per group. 

• • The principle of subsidiarity of governance will lead to many  “soft” boundaries: specific rules, roles and regulations that are common within a sector but differ from the equivalent agreements in other sectors

• The boundaries that are to be crossed when “non-BDI” or “data-sharing network” actors are part of a specific operational network instance and need to be incorporated in the digital data exchange.  

• • The most obvious example is the delivery of a shipment to a receiving party. The receiving party may very well not be a member of a BDI association, unaware of the BDI framework and may have less Logistics IT maturity. The shipper and transporter would like to maintain the benefits of the automated controlled digital data exchange in such a case, without reverting to the default paper-based process.
  • This boundary has both technological (IT) and legal (liabilities) aspects that interact with each other: the shipper, receiver and transporter execute two commercial transactions at the same time. The shipper executes the delivery of the goods sold to the receiver by means of a transport order which is another commercial transaction between the transporter and the shipper.

Edge agreements are standards for interactions on a boundary. This standard may be local to a group (or Association), or more global over multiple groups. The BDI has a listing available of a set of potential agreements that can be used in such a process. In these agreements it is also indicated which are obligatory and which are not.

Example for transport orders

 Transport is a consequence of trade. In the terms and conditions of a purchase agreement, the seller and buyer agree, among other things, who should take care of the transport of the shipment. In international trade, sellers and buyers can use the Incoterms 2020. These are standardized agreements about who arranges what (e.g. transport, but also insurance and customs formalities), payment and payment securities, at what point the responsibility is transferred (e.g. when a container is lifted over the railing of a ship), and the like.

Standardized terms and conditions have been developed to codify roles, responsibilities and liabilities between the seller, a carrier and the buyer. International treaties harmonize these conditions between countries. The aim is clear: this standardization and harmonization facilitates trade.

These conditions are specifically tailored to a modality. The CMR Convention, for example, was set up for international road transport. The CMNI Convention exists for inland navigation. In the maritime sector, the Hamburg Convention (United Nations Convention on the Carriage of Goods by Sea) is leading. The Montreal Convention sets out the liability of air cargo carriers, and IATA also has specific conventions for the carriage of dangerous goods and live animals by airplanes.

All these treaties have a main document that is intended for commercial agreements about transport in the context of a commercial transaction.

When the paper-based process is “digitized” the legal boundary interactions (“edge agreements”) have to be redefined. Suddenly questions arise on the legal status of digital “signatures”, i.e. signatures that in the paper process are a record of the handover moments.

Digitally recording a transaction is something that causes a lot of unrest and uncertainty for many entities. There are many technological variants and possibilities, each with their own advantages and disadvantages. And some technological secure variants do not resemble the tried and trusted ‘wet’ signature, and vice versa. A PDF with a pasted-in scan of a signature gives a familiar feeling but is a very weak method. A geo-tagged, time-stamped digital image of the delivered shipment at the desired location does not require digital infrastructure for the receiver, but can it be used as evidence in court if there is a conflict?

For many users, including authorities, digitized processes are an unknown field, and the risks and implications of the various variants are not immediately clear. There also exists doubt about what is required and enforced by law (fined when not complied with), what is a commercial business choice between parties, and how does that work out when a business conflict arises.

Edge agreements are a building block that helps parties to overcome this uncertainty, build and codify acceptable practices, standardize them and gain the benefits of digital transactions. Edge agreements are accepted by parties involved in any commercial transactions