Policy & Compliance

Vested interest makes a case for switch to digital bills of lading

We have video conferencing and cashless transactions, so why not the electronic bill of lading – particularly at a time of extra difficulties caused by Covid-19?

A bill of lading prepared in Marseille in the 19th century. From the collection of Ahmet Aytogan.

One of the keystones of the international shipping trade is the bill of lading (B/L), a document that has been around, in one form or another, since medieval times. Older readers will have memories of the purple ink printed Roneo documents that accompanied every ship manifest, and some may indeed recall the copperplate handwritten examples turned out by the River Thames barge skippers. As transport modes have evolved so too has

the phraseology, hence the inclusion in the, so far unratified, Rotterdam Rules, changing any such authority to a ‘transport document’ – although so deeply embedded is the term that bills of lading will probably still survive any such regulation. However, one major change is being called for,

albeit by a party with a vested interest. The Digital Container Shipping Association (DCSA) says that the time to switch to an electronic, digital document, the ‘eB/L’, is with us and it makes a pretty strong case for doing so, claiming that eliminating paper from shipping transactions will make every aspect of commercial container shipping better, faster, cheaper, more secure and environmentally friendly. Despite the lack of any standardised approach

to digitalisation, some carriers and solution providers have continued to move forward with proprietary eB/L initiatives, albeit on a limited scale. However, as André Simha, global chief digital & innovation officer for MSC and DCSA


chairman, recently noted: “The Covid-19 situation is bringing the core strengths of a standardised eB/L to the fore. Cargo in ports cannot be gated out because of paper that is stuck elsewhere due to airfreight delays caused by the pandemic.” As with so much else, it may be the current

pandemic that causes the sea change in approach to documentation. Certainly, when considered in conjunction with the tentative steps many of the major carriers and logistics outfits are pursuing with blockchain technology, it would seem a short step to take. The DCSA says it carried out a financial

modelling exercise to quantify the potential cost

Maintaining integrity Maintaining the unique nature of the B/L as it passes along the supply chain is of paramount importance but hitherto ensuring such integrity has not been possible using an electronic document. DCSA now says new technologies such as

distributed ledger technology (DLT), peer-to-peer and blockchain offer potential solutions for eliminating the risk of a single catastrophic failure or attack that would compromise the integrity and uniqueness of an eB/L. Obviously any new format would require

acceptance by government authorities, banks and insurers, but in many cases these are now the very bodies that are forcing others to utilise

July 2020

savings available by switching from paper B/Ls to eB/Ls. The complexity inherent in using a B/L means the actual process cost for a single B/L can vary widely. Nonetheless, it claims the research derived a

comparison that indicates the total cost of processing paper bills is almost three times that of eB/Ls. At a global economic growth rate of 2.4% through to 2030 (as forecast by the OECD), it estimates that the industry can potentially save more than $4 billion per year if just 50% eB/L adoption is achieved. In the decade since IATA introduced e-Air Waybills (e-AWBs), it has seen adoption in 68% of consignments carried.

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