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Nine major carriers pledge full adoption of electronic bills of lading by 2030

Published:Tuesday | February 21, 2023 | 12:31 AM
Carriers issue approximately 45 million bills of lading annually but only 1.2% are electronic.
Carriers issue approximately 45 million bills of lading annually but only 1.2% are electronic.

Maritime stakeholders may save US$6.5 billion in direct costs after nine carriers committed to the complete adoption of an electronic bill of lading (eBl) by 2030.

The announcement was made by the Digital Container Shipping Association (DCSA) last Wednesday, February 15, and will see the carriers switch from paper bills of lading in a move that could result in US$30-US$40 billion in annual global trade growth, the association said.

The signed carriers comprise DCSA members MSC Mediterranean Shipping Company; A.P. Moller-Maersk; CMA CGM Group; Hapag-Lloyd, Ocean Network Express (ONE); Evergreen Marine; Yang Ming; HMM; and ZIM.

The electronic bill of lading functions as a document of title, receipt of shipped goods and a record of agreed terms and conditions. Presently, stakeholders pass paper bills of lading from one place to another, which the DCSA views as time-consuming, expensive, and an environmentally unsustainable trade documentation process.

Under the pledge, the carriers will initially convert 50 per cent of original bills of lading to digital within five years, with the changeover completed in 2030, accelerating the digitalisation of container trade, which should also transform the customer experience and improve sustainability.

Despite carriers issuing roughly 45 million bills of lading each year, only about 1.2 per cent of that figure was electronic as of 2021. The shift towards end-to-end digitalisation of the trade documentation, beginning with the eBl, will make international trade more efficient, reliable, secure, sustainable, and less susceptible to illegal activity.

What’s more, “transforming document exchange through the eBl will accelerate digitalisation to benefit customers, banks, customs/government authorities, providers of ocean shipping services and all maritime supply chain stakeholders,” the DCSA shared.

Thomas Bagge, the association’s chief executive officer, said, “The digitalisation of international trade holds vast potential for the world economy by reducing friction and, as trade brings prosperity and the eBL will further enable trade, helping bring millions out of poverty.

“This heralds the start of a new era in container shipping as the industry transitions to scaled automation and fully paperless trade,” Bagge said. “Document digitalisation has the power to transform international trade and requires collaboration from all stakeholders,” he continued.

A recent McKinsey study estimates that full implementation of the eBl across the industry could unlock US$18 billion in gains through faster document handling and reduced human error, in addition to the US$30-$40 billion in global trade growth.

The road to implementing eBls has been long, as the complexity of the shipping industry, the large number of stakeholders, and country- and region-specific legislations have proven challenging. Additionally, concerns about technology, varying platforms and the lack of interoperability are issues the DCSA has had to directly and indirectly address continuously.

The agreement’s signatories welcomed the development which was deemed an important milestone.

MSC Mediterranean Shipping Company’s CEO Soren Toft said the eBl will create a better experience for customers and contribute to the company’s climate goals as it moves towards net zero by 2050.

Vincent Clerc, CEO of A.P. Moller-Maersk, said, “A fully digitised bill of lading enables a more seamless customer experience across the supply chain and in turn, will help democratise trade and reduce time and costs for all involved parties. The need for digitalisation in logistics is urgent, and the industry needs to speed up the process.”

The DCSA was established as a non-profit, independent entity by several of the largest container shipping companies in 2019. It aids in setting standards for the industry and creating the technological base for interoperable information technology solutions.