Almost a year ago, trade and freight industry heavyweights ICC, DCSA, BIMCO, FIATA and SWIFT launched the Future International Trade Alliance (FIT) and signed a memorandum of understanding to standardize the digitalization of international trade.
The industry associations signed up to collaborate on the development and adoption of relevant standards to facilitate the use of electronic bills of lading..
The key objective of the Alliance is to raise awareness and encourage greater use of shipping standards and electronic bills of lading (eBLs) across all sectors of the shipping industry..
FIT conducted a survey in June 2022 to gauge awareness and adoption of eBLs, as well as factors that hinder adoption..
The survey results show some promise for growth in eBL use but clearly identify obstacles that the industry must address for eBLs to gain mainstream acceptance..
As per DCSA, the survey revealed below interesting results :
Awareness of electronic bill of lading is high
- 75% of respondents have heard at least some (up to a great deal) about them, and 94% have heard at least a little
- 28% of respondents already use eBLs in conjunction with paper
- 5% who have already made the full transition to eBL
- 58% of those using only paper B/Ls have plans to use eBLs in the future
- 22% say they will use eBLs within the next six to 24 months
The advantages of digitization were also well known
- 86% of survey respondents identified increased speed
- 78% cited process efficiencies
- 73% improved customer experience
- 73% cited cost savings
- 86% said they believe eBLs can/will unlock wider trade digitization
Hindrance in adoption of electronic bill of lading
1. 73% said the top reasons for not using eBLs, or not using them more because of technology, platform, or interoperability concerns
Suggested Solution: Although interoperability has been identified as one of the concerns, users can take comfort in the fact that many doubts and uncertainty surrounding the success of transmission and handover of electronic bills of lading (eBL) between two different eBL platforms were put to rest recently..
CargoX, one of the approved and leading providers of electronic trade data transfer solutions successfully concluded the first exchange of an eBL with a competing platform, edoxOnline putting concerns about interoperability to rest..
2. 63% of respondents cited a lack of stakeholder readiness as a key reason for not using eBLs, or not using them more
Suggested Solution: As per DCSA, the solution to this standoff is simply for companies to embrace standardization by actively contributing to and driving standards implementation within their own organizations.. Shipping standards are available now, and the FIT Alliance’s mission is to drive rapid adoption of these standards within their member organizations, as well as industrywide, to accelerate maritime digitalization and the benefits it will bring..
3. 55% of survey respondents cited legal gaps and uncertainty around this as a hindrance in adopting eBL
Suggested Solution: The United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Transferable Records (MLETR) offers a legal framework that can be adopted by countries to enable electronic documents to be recognized as legally equivalent to paper documents..
In reality, even though MLETR is not yet widely adopted, it does not pose an obstacle to eBL adoption today. eBL solution providers already have legal frameworks in place to enable eBL adoption and legal interoperability..
Way forward for the electronic bill of lading
Following the survey, the FIT Alliance is reportedly reaching out to survey respondents and other industry stakeholders to get a deeper understanding of their current challenges and collaborate on actions to move eBL adoption forward..
In the meantime, DCSA is reminding the industry that switching from paper bills of lading to eBLs will benefit international trade in innumerable ways by increasing speed, lowering administrative burden, lessening legal risk, and reducing illegal trade and carbon emissions..
Sending physical paper around the world in the current day and age is not sustainable and completely unnecessary..
