Much has changed in supply-chain management since the days when an idle onlooker on the foreshore of Deal, in southern England, could count 200 sailing ships riding at anchor in the habour.

Coal, then bunker fuel, overcame the delays occasioned by contrary winds, and refrigeration enabled the Vestey family to build a British empire of high street butchers thanks to Argentinian beef, and made Thomas Fyffe’s name synonymous with bananas.

The maritime industry is no stranger to technology innovation. Yet the financial services and documents required to deliver goods from far-flung producers to consumers in the northern hemisphere, and manufacturers around the globe, seem scarcely to have changed form in two centuries.

Commercial letters of credit remain the financial backbone of international trade, in an era when the value of monthly shipments to and from the 36 larger nations tracked by the Organisation for Economic Co-operation and Development amounts to $1,810bn.

To fund a transaction, an importer’s bank issues a letter of credit to the exporter’s bank, forming an undertaking, usually irrevocable, that the vendor will be paid. A western importer typically funds the transaction with bank borrowing at a rate of 6 or 7 per cent, a premium reflecting a risk that the goods will never arrive, or will be damaged in transit.

Big traders, such as shoe manufacturers or retail groups, may use a regular credit line, but here too, margins are commonly 5 to 7 per cent, says Nigel Woodward, leader of global strategy for financial services at computer chip-maker Intel.

This seems extraordinary in an era when individuals regularly buy objects, or even internet phone time, from suppliers in other countries using nothing more than a credit or debit card.

Little wonder that banks are piling into trade finance with the eagerness of sailors taking to the lifeboats of a sinking ship.

The simile is apt because global trade has experienced a meteoric increase over the past decade. By the end of last year, US ports alone were handling almost 1.5m containers a month, although the pace of growth has slowed.

According to Carmen Crutchfield, vice-president of marketing at US financial software group S1 Enterprise, many banks are casting around for more reliable revenues now that the end of the cheap credit era has crumpled their business models.

For many, the idea of harmonising the supply of trade finance with corporate and investment banking and treasury functions has a strong appeal. It not only allows them to cut costs, but also improves service to customers.

And those customers have changed. A decade ago, mid-cap companies were mostly national or regional ones. But globalisation has turned many into world-traders, as the banks are belatedly discovering.

For the 20 or so big banks that fund 55 per cent of global trade, trade finance has been a lucrative bonanza. Now, the 400 that fund the rest crave a bigger share. In an era of increased competition, margins are likely to come under pressure.

One source will be the moves to streamline the extraordinary inefficiency of the paperwork. Moving goods in a container between countries requires not just financing papers, but transport and shipping documents, bills of lading, Customs declarations, and more. Few big importers yet have the courage to tackle the job in house. But as opportunities for savings in the physical supply chain diminish, companies at all levels are seeking IT solutions.

Dwight Klappich, a Gartner analyst, cites a large US trading company that was paying $600 per letter of credit, and processing several thousand a month, generating a paperwork bill of more than $1m a month. “They have now automated part of it,” he says. “It takes out cost and improves accuracy.”

Dean Francis, head of document management services for western Europe at 3i Infotech, an Indian software house, says his company has lively interest from UK banks after selling its Dataflow application to two big banks, one European and one from the US, for their trade finance arms in the Gulf.

He reckons up to 70 per cent of first-issuance letters of credit contain errors. His company’s solution is designed to capture and bring together all data relating to a particular transaction, whether scanned, delivered by fax or by e-mail. Some of the data can then be made available on the bank’s electronic portal, reducing the need for physical meetings between bank and client representatives to verify documents.

Solutions such as these are helping to automate the paper processes, and ensure that air-freight shipments no longer arrive before their paperwork.

But information technology has the capacity to bring about a trade revolution as dramatic as the international adoption of the container in the 1950s. Just as the Korean war helped accelerate use of containers, so the US war on terror has spurred new thinking about equipping it with IT.

Fran Howarth, a principal analyst at Quocirca who specialises in ports, says efforts to improve security in the US in the wake of the 2001 terror attacks are beginning to have far-reaching effects. America’s Safe Ports Act of 2006 did not just require scanning of containers before they leave foreign ports for the US, it drove huge improvements in information gathering and sharing.

Security concerns have prompted trials of electronic seals for containers and the use of radio frequency identification tags – readable by a beacon on a promontory the ship is passing – to label them and locate them.

But Jerry McNerny, vice-president of strategy and business development at Motorola Enterprise Business (and a former merchant marine officer) says: “More recently we have seen a subtle shift: while security remains extremely important, probably just as important for the maritime community are the productivity improvements and how the paperwork can align with the movement of the containers.”

The new thinking, from companies such as Savi Networks, is to equip each container with an electronic device that not only records its location, but the temperature and humidity of the air within it. The data could be collected, passed to a node, and uploaded into a single global repository accessible by anyone with a legitimate interest in the cargo. Trials are under way.

Suddenly, owners, financiers and shippers alike would know both the location and the quality of the cargo. Think back to Thomas Fyffe’s bananas. As David Picton, head of Motorola’s logistics arm in Europe, and a one-time Royal Air Force logistics chief remarks: “When you get to the point that you can buy stuff that says ‘ripen in fruit bowl’ you have passed all the risk that it will go rotten to the consumer.”

Ms Howarth says that supply chain managers with that kind of information could re-route ships, either to a cooler route, to avoid congested straits, or even to take advantage of prices in a different market. Trade risk – in all its forms – would sharply diminish. So would the case for those premium interest rates levied on trade finance by the banks.

Ms Howarth predicts that in terms of a technology breakthrough: “Much of this will be up and running in two or three years.” A new supply chain revolution is closer than many people think.