Implementation of the Electronic Bill of Lading: How Digitalisation Can Create a More Secure Shipping Industry
For the reason that international trade transactions implicate various parties, from buyers to sellers, shipowners, charterers, ship’s master or crew, insurers, financiers, brokers and agents, there are several potential weak spots – as well as many potential victims of deceit.
In this context, the Bill of Lading (BL) is one of the most important documents in shipping, and also one of the most prone to fraud. Consequently, the shipping industry needs to establish a collaborative approach to risk management and to take advantage of digitalisation in order to counter the ongoing attempts to exploit the system:
- As a first measure, Electronic bills of lading (eBLs) can be produced, transferred and managed in a digital environment, which eliminates the risk of physical document handling.
- Secondly, eBLs offer a higher level of authentication and security, which ensure that only authorised parties can access or make changes to them.
- Thirdly, eBLs enable audit trails, which allow users to review the progress of a transaction and oversee any changes being made to the trading documentation, giving them greater visibility and control over the process.
- Lastly, the use of encryption and other digital security measures in eBLs makes them more difficult to forge or manipulate than paper bills of lading, further reducing the possibilities of fraudulent activities.
The 9 members of Digital Container Shipping Association (DCSA), a neutral, non-profit group founded by major ocean carriers to digitize and standardize the container shipping industry, committed on February 15, 2023 to converting 50% of original bills of lading to digital within the next 5 years and 100% by 2030 to accelerate the digitalization of container trade, thus moving away from the issuance and use of physical paper bills of lading.
According to DCSA: “Switching away from the transfer of physical paper bills of lading could save $6.5 billion in direct costs for stakeholders, enable $30-40 billion in annual global trade growth, transform the customer experience, and improve sustainability.”
There are also other major international institutional initiatives for digital conversion of paper documents which offer powerful tools for stakeholders involved in the digitalisation process:
- Standards Toolkit for Cross-border Paperless Trade, published by the International Chamber of Commerce (ICC) and the World Trade Organization (WTO). The Standards Toolkit offers an overview of existing standards to help drive adoption, identify potential gaps and promote interoperability, in order to equip every supply chain participant, both public and private, with some of the most notable and widely used standards to help push trade digitalisation to the next level.
- According to the Data Free Flow with Trust (DFFT) concept, data must flow freely and responsibly across borders, in order to allow the achievement of the world’s full economic, societal and environmental potential. The framework for “data free flow with trust” maps a multi-dimensional architecture for international cooperation on data flows, between governments, as well as involving business, with recommendations to increase levels of governance trust and build openness through trade rules and other tools. Under Japanese leadership in 2023, G7 governments have the opportunity to operationalise the DFFT concept and make a lasting contribution to secure trusted data flows and the benefits they bring.
For further information, please read the following:
From paper to golden sources: how digitalisation can create a more sec… (bimco.org)
DCSA’s member carriers commit to a fully standardised, electronic bill of lading by 2030 – DCSA
Here’s why we need to secure trusted cross border data flows | World Economic Forum (weforum.org)