The Internet has put some momentum behind Bolero Operations Ltd.
Fourteen global financial institutions began piloting Bolero's system for automating trade operations in December, nearly three years after the group's formation.
Bolero, of London, is a joint venture of the Society for Worldwide Interbank Financial Telecommunication, or Swift, and the Through Transport Club, an association of exporters, shipping lines, and port authorities.
Its goal is to execute paperless trades by electronically exchanging documents such as bills of lading and letters of credit. Today's paper- intensive environment siphons 7% of the profits-worth $4 trillion a year- from global trading, according to Bolero.
Until the Internet emerged as a viable way of doing business, the group had been stymied by the limitations of "existing technologies and the logistics of involving so many parties," said Susan Ryan, project manager at BankBoston Corp., one of the pilot participants.
"The emergence of Internet has given Bolero a jump start," Ms. Ryan said.
Bolero had considered other options to support the exchange of electronic trade documents, including Swift's telecommunications network for payment messaging and value-added networks.
"Bolero was able to see the advantages of using the Internet and start bringing it to reality," Ms. Ryan said.
Peter Scott, commercial director at Bolero, said he expects a commercial launch of Bolero this year, adding that corporations are ready for the new technology.
"If we don't come together now, it will just get much harder to do later," Mr. Scott said.
Besides BankBoston, participants in the six-month pilot include Chase Manhattan Corp., Citigroup, Banco Santander, Bank of Tokyo Mitsubishi, Sumitomo Banking Corp. and Hong-Kong Shanghai Bank Corp.
They are testing Bolero-built workflow software that includes public-key technology to secure the transfer of electronic documents. Gaining commitments from the many parties associated with a single shipment of goods took years, Mr. Scott said.
In the paper world, trade documents typically flow via express mail from exporters, to freight forwarders, to banks, to importers, to customs agents. The Bolero system offers the ability to sign bills of lading and letters of credit digitally.
Bolero also would act as a trusted third party, registering users, electronically generating public keys, and issuing digital certificates.
"We have taken a real textbook approach to this," Mr. Scott said. "We haven't tried to dash out there and get something out quickly into the marketplace."