In line with the push from various organisations and entities to move towards a digitized trade future, the FIT Alliance – made up of members BIMCO, Digital Container Shipping Association (DCSA), International Federation of Freight Forwarders Associations (FIATA), International Chamber of Commerce, and Swift – has announced the “Declaration of the electronic Bill of Lading (eBL)”.
The aim of the declaration is to secure a commitment from all stakeholders in international trade to collaborate in driving digitalisation which will help streamline international trade, making it more efficient and dependable.
This declaration of course follows the commitment by the DCSA members to convert 50% of paper bills of lading to electronic within the next 5 years and 100% by 2030 and the “25 by 25 pledge” of BIMCO, a commitment by some of the world’s biggest shippers in the bulk sector to target moving 25% of their annual seaborne trade volume for at least one commodity using electronic bills of lading by 2025.
Why the declaration?
As per the FIT press release, every year, ocean carriers issue around 45 million bills of lading majority of which are paper-based, and only 2.1% of bills of lading and waybills in the container trade being electronically issued in 2022.
This is despite the fact that end-to-end digitalisation of trade documentation will cut costs, and make international trade more efficient, reliable, secure, sustainable, and less susceptible to illegal activity or fraud.
The adoption of electronic Bills of Lading (eBL) will enable the trade industry to benefit from faster transactions, cost savings, and lowered fraud risks.
However, there are some encouraging signs of growth especially in the dry bulk sector where four of the world’s largest mining companies are already carrying around 20% of their iron ore shipments using eBLs.
A McKinsey study estimated that the industry could unlock $30-40 billion in global trade if there was 100% adoption of eBL in the container sector alone as this would reduce trade friction caused by delays and disputes with paper documentation. The study also estimated that by adopting eBL 100%, there would be a significant reduction in carbon emissions through the elimination of paper while also saving 28,000 trees per year, equivalent to around 39 football fields of forest used in trade.
“A universal eBL will benefit all stakeholders involved in the global supply chain whether in bulk shipping or container shipping. Achieving widespread adoption of a standards-based eBL will benefit not only the shipping industry but also the global movement of goods, at a time when supply chain resilience is challenged,” the FIT Alliance says
“This declaration is a significant symbol of our joint dedication to shape the future of shipping. Transforming document exchange through a globally applicable eBL will accelerate trade digitalisation to the benefit of customers, banks, customs, government authorities, providers of ocean shipping services, and all other stakeholders.”
How can stakeholders contribute?
In addition to signing the commitment, stakeholders can support the development and usage of eBLs based on below actions highlighted by FIT :
Adopt eBL process and data standards from FIT Alliance members (DCSA, BIMCO, and FIATA), use them in relevant product applications, and encourage trade partners to do the same
Adopt existing eBL solutions and encourage trade partners to do the same
Support eBL standards development
Provide feedback on standards
Provide stakeholder requirements to developers
Participate in workshops, surveys, POCs, and pilots executed by members of the FIT Alliance
Participate in promotional activities
Collaborate with FIT Alliance members to promote eBL standards (through marketing programs)
Share eBL success stories
Utilise eBL standards from FIT Alliance members in establishing new digital partnership
Interested stakeholders can demonstrate commitment to universal eBL by signing the FIT Alliance eBL Declaration and help move the industry closer to its promising digital future.
Next steps in the eBL and digitalization journey
While the various technical and legal challenges to a universal eBL adoption are being addressed, the key requirement now is a unanimous commitment to digitalization from all stakeholders in global trade.
The eBL Declaration by FIT Alliance serves as a platform for all stakeholders to publicly declare their readiness for a digital revolution and pledge to collaborate in propelling digitalization across their respective industries.