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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.
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.
- 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.
- 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.