Global trade has become increasingly interconnected over the last decade and has continued to grow even during the Covid 19 Pandemic. Amongst other things, this has led to an increasingly complex regulatory landscape for businesses.

This challenge especially impacts the construction industry, which relies heavily on international trade to source materials such as timber, steel, and concrete.

Each region has its own set of rules and policies governing everything from product standards to environmental sustainability. With emerging digital technologies, businesses can find better ways to adapt to evolving regulations and trade policies, but the path is not without its hurdles.

In this piece, I will explore how companies can leverage technology to manage policy changes, the lingering impact of Brexit, and the new realities imposed by the EU’s Deforestation Regulation (EUDR) on timber trading, as well as how we might expect trading laws to evolve over the next decade.

In today’s fast-paced regulatory environment, technology has become an essential tool for businesses. From automating compliance checks to real-time tracking of regulatory updates, digital platforms are enabling companies to respond to policy changes more efficiently than ever before.

Digital trade platforms, for example, are revolutionising how businesses monitor their supply chains. Instead of sifting through vast amounts of paperwork, firms can rely on integrated software to manage cross-border compliance, ensuring that materials meet the required standards for each country. 

One of the key benefits of digital tools is their ability to centralise information. By using platforms that track regulatory updates in real-time, businesses can proactively adjust their operations in response to changes. This is especially important in industries like construction, where product specifications and certifications can vary significantly between markets.

Additionally, artificial intelligence (AI) can assist in predictive analysis, helping companies anticipate regulatory shifts and adjust strategies before the laws come into effect. This forward-thinking approach can save time, reduce costs, and minimise disruptions to the supply chain.

For many in the construction industry, the effects of Brexit continue to impact trade relations between the UK and businesses in the European Union.

Politics aside, the UK's departure from the EU created new layers of complexity for businesses trading across the Channel, especially when it comes to the import and export of construction materials. New regulations have introduced additional paperwork, tariffs, and longer wait times at borders, all of which have had a direct impact on costs and project timelines.

Navigating these hurdles requires a well-coordinated approach, particularly for firms trading with both the UK and EU markets.

Digital solutions, such as customs software and automated declaration platforms, are increasingly essential in streamlining these processes. But beyond technology, businesses need to be proactive in building strong relationships with local regulators and compliance agencies to ensure they stay ahead of any new trade policies or restrictions.

This partnership between human expertise and technological innovation is crucial for navigating the post-Brexit regulatory environment.

Another significant regulatory change businesses must navigate is the aforementioned European Union’s Deforestation Regulation (EUDR), set to impact the timber industry in particular.

Under the new rules, companies trading in timber and timber products must ensure that their materials are not sourced from deforested land, and they must prove that their supply chains are free from illegal deforestation.

This regulation is a game changer, as it places the burden of proof on companies, requiring them to implement rigorous due diligence processes.

This is where digital platforms can once again play a vital role. By leveraging blockchain technology, for example, businesses can track the origins of timber, ensuring that every piece of material complies with the EUDR.

Blockchain offers an immutable record that can provide transparency across the supply chain, giving both regulators and customers confidence that the timber was sourced ethically and legally.

Moreover, digital tools can assist companies in meeting EUDR reporting requirements by automating the collection and submission of compliance documents.

For businesses dealing in timber, the ability to generate real-time reports on the provenance of their materials will not only help them meet legal obligations but also serve as a competitive advantage in a marketplace where sustainability is becoming a key purchasing criteria.

Looking ahead, we can expect the landscape of cross-border material trading to become even more intricate.

As governments worldwide place greater emphasis on sustainability and environmental protection, the construction sector will see more regulations aimed at reducing carbon footprints, promoting renewable materials, and ensuring the ethical sourcing of construction goods.

In the next decade, I anticipate a rise in regulations similar to the EUDR, but expanded to cover a broader range of materials, including metals, minerals, and even synthetic materials.

At the same time, international standards for carbon emissions and green building certifications will likely become more harmonised, requiring businesses to adopt uniform practices across multiple markets.

This shift will place an even greater premium on digital solutions that can automate compliance and provide transparency across borders.

Digital trade platforms will continue to evolve, integrating more advanced AI capabilities to help businesses forecast regulatory changes and optimise their supply chains accordingly.

Companies that fail to adopt these technologies may find themselves lagging behind, as the cost of non-compliance—both financial and reputational—becomes ever higher.

About David De Jong

David de Jong is the CEO and Co-Founder of VonWood. Since graduating from the University of Amsterdam, he has created a range of companies, including adtechs Adrime and Screen6 which were all successfully sold to global operating companies. In 2022, he established VonWood, along with his co-founder, Minck Hermans. VonWood is an online timber platform that aims to facilitate the digital transformation of the timber industry through the provision of a single platform that connects buyers and sellers. 

About VonWood

Founded in 2022, VonWood is a digital platform that aims to facilitate the digital transformation of the timber industry by improving the efficiency and transparency of the timber sector through the provision of a single platform that connects buyers and sellers. The platform increases the accessibility and availability of timber, ensures greater efficiency, enables lower prices, provides greater transparency about the origin and quality of the wood, and promotes sustainability by sharing unique information relating to the carbon footprint of a supply chain. Furthermore, VonWood plants trees for every one they cut down. Learn more at www.vonwood.com