Five industry associations have backed an electronic bill of lading (eBL) by declaring they will secure a commitment from stakeholders to collaborate on driving digitalisation. 

DCSA, BIMCO, the International Federation of Freight Forwarders Associations (FIATA), International Chamber of Commerce (ICC) and the Society for Worldwide Interbank Financial Telecommunications (Swift) – collectively called the Future International Trade (FIT) Alliance – work to raise awareness and accelerate the adoption of a standards-based eBL across all sectors of the shipping industry.  

The Alliance’s declaration is another significant step along the road to digitalisation so that future trade processes will be simpler, more sustainable and more resilient. Earlier this year, the nine ocean carrier members of DCSA committed to 100% eBL adoption by 2030. 

Why container trade needs the eBL

For too long, container shipping processes have relied on paper. The bill of lading (BL) is a significant case in point. It is a crucial document that facilitates global trade; every year, ocean carriers issue around 45 million of them, and many are still paper-based. 

It is expensive to exchange paper BLs, costing around $11 billion per year. Stakeholders could save $6.5 billion in direct costs by switching away from documentation in physical paper form. 

They could also save time, as exchanging paper is inefficient, and improve security by reducing the potential for fraud. Paper-based information is prone to errors and has a negative environmental impact, through both paper production and printing, and moving paper along the supply chain. 

Digitalising trade documentation end-to-end, starting with the BL, will improve data visibility across the supply chain by giving stakeholders easy access to accurate, up-to-date information. 

Day-to-day, they can use this to manage the movement of shipments and, on a longer-term basis, use insights from the data to optimise processes and improve performance. 

Why the eBL needs digital standards

As the BL has such a significant role, the electronic BL (eBL) will sit at the heart of digital trade processes for container shipping. 

The eBL, in itself, is not new. Digital platforms to exchange eBLs already exist and are used, but they often operate in a standalone way, which means they can’t exchange information automatically with each other. 

This means that if a trade finance bank uses one platform, it cannot directly share shipping documents with a stakeholder who is using a different platform. As a result, paper endures, because unstandardised data can’t flow unhindered across the end-to-end supply chain. 

There are two ways to get around this. 

1. Everyone involved in a shipment needs to use the same platform. That is unrealistic and inconvenient when companies transact with many organisations, as they do. They’d have to implement multiple platforms to operate.
2. The second, and more sustainable solution is to base the eBL on digital standards.

Open-source digital standards provide a common language so that data can be readily exchanged by all platforms that work to the standards. They are, in essence, the foundation of an interoperable ecosystem. 

DCSA’s standards establish common definitions and frameworks for digitalising data, and common protocols for communicating it. They pave the way for effective communication through a consistent vocabulary, common process flows and API-based interfaces. 

When transacting stakeholders in container shipping adopt digital standards, their data exchange can become seamless and the platforms they use can interoperate. This goes for the eBL and other digital trade documentation processes, so that stakeholders can efficiently, consistently and accurately exchange information without having to adopt multiple platforms. 

Widespread adoption of standards-based eBLs will establish a technological foundation for straight-through, end-to-end data processing. 

This will support innovation and choice in the market for financers and other stakeholders, who gain efficient, resilient processes whilst retaining the flexibility to work with partners that use a range of technological platforms.

Committing to progress

The FIT Alliance’s eBL declaration adds to the momentum that has been building around the eBL. Some of the biggest shippers in the bulk sector have committed to target moving 25% of their annual seaborne trade volume for at least one commodity using eBLs by 2025 through BIMCO’s “25 by 25 pledge”. 

DCSA’s own 100% eBL by 2030 initiative, launched earlier this year, represents a significant commitment from its member carriers, and 26 freight forwarding associations now offer digital FIATA bills of lading. 

Container shipping’s future, and its continued progress, lies in effective, up-to-date information exchange, enabled through digital standards that support interoperability and scalability. 

The FIT Alliance’s eBL declaration commits to digitalisation that will pave the way for a container trade ecosystem that is more efficient, resilient and secure, and that supports future growth.

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It is a significant step along the road to digitalisation, one that heralds a future for container trade processes that are simpler, more sustainable and more resilient.

Standards will provide a common language for the eBL so that information can be readily exchanged, regardless of the technology platforms in use, for unhindered international trade. 

Why container trade needs to digitise the bill of lading

The bill of lading is the most important trade document in container shipping. It functions as a document of title, a receipt for shipped goods and a record of agreed terms and conditions. 

Currently, most bills of lading that are passed along complex supply chains, are in paper form. 

That is an astonishing situation when you consider that container trade is heavily dependent on communication and that other industries in similar positions have transitioned to digital processes. 

Exchanging paper is time-consuming, and it adds to expenses. Paper exchange isn’t environmentally sustainable, and it can contribute to supply chain bottlenecks. 

If an original bill of lading, or title document, fails to arrive or isn’t processed in time, cargo in ports can’t be gated out. 

Conversely, digital processes enable data to flow instantly and accurately, reducing delays and waste. Sharing information in this way can make international trade more efficient, reliable, secure and sustainable.

Why hasn’t an eBL already been adopted?

Digitalising container trade, and in particular transitioning away from paper and towards an eBL will deliver compelling benefits. Yet, in 2021, only 1.2% of issued bills of lading were electronic. Why?

The Future International Trade (FIT) Alliance, comprising DCSA, BIMCO, FIATA, ICC and SWIFT, set out to find out. It conducted a study with industry stakeholders across 66 countries, including banks, freight forwarders, carriers, shippers, agents and consignees. 

The study revealed that the largest factor hindering eBL platform adoption is concern over technology platforms, especially regarding the lack of interoperability between eBL platforms.

There are currently eight eBL platforms approved by the International Group of P&I Clubs for ocean carriers to use; however, the platforms are not interoperable. 

This means that a trade finance bank, for example, that uses one platform can’t exchange shipping documentation with a stakeholder that uses a different platform. 

As a result, everyone involved in a shipment must be onboarded onto the same platform. That takes time and is expensive and inconvenient for companies who transact with many organisations and therefore, may have to implement multiple platforms.

The solution to enabling 100% eBL adoption and benefits for trade finance 

The solution is the adoption of DCSA digital standards for container shipping, which will enable seamless data exchange across all stakeholders and interoperability between platforms. 

When organisations use DCSA eBL standards to transfer eBL data, information can be exchanged efficiently, consistently and accurately. When eBL platform providers adopt DCSA interoperability standards, standardised eBLs can be exchanged between platforms securely, enabling stakeholders to adopt just one platform regardless of whom they do business with. 

Widespread adoption of DCSA bill of lading standards will establish a technological foundation for straight-through, end-to-end processing of electronic bill of lading data. 

With trade volumes expected to triple again by 2050, digitalisation has become a priority for the shipping industry.

A recent McKinsey study estimates that if eBL achieved 100% adoption, it could unlock around $18 billion in gains for the trade ecosystem through faster document handling and reduced human error (among other improvements), plus $30-40 billion in global trade growth, as digitisation reduces trade friction.

Paperless trade would also save 28,000 trees per year and may significantly reduce carbon emissions. 

For financiers and other stakeholders, standards for seamless digital information exchange support innovation and choice in the market, giving trade participants the flexibility to conduct business with the partners of their choosing in any digital transaction.

For too long, container shipping processes have relied on paper. 

Where technology has been used, it has operated in a standalone way, not based on standards, and unable to streamline data exchange across the end-to-end supply chain. By committing to adopting a standards-based eBL, industry stakeholders are paving the way for an interoperable container trade ecosystem that can effectively support future growth.

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