Introduction of eBL could yield $4 billion dollars in annual savings
The Digital Container Shipping Association (DCSA) said the COVID-19 pandemic has made the need for a standardized industry e-bill of lading (eBL) greater than ever.
Cargo in ports sometimes can’t be gated out because paper bills of lading simply are getting stuck in a supply chain mucked up by the pandemic, according to DCSA, which argues that eliminating paper from the shipping transaction will make every aspect of container shipping better, faster, cheaper, more secure and environmentally friendly.
DCSA also has pegged $4 billion in annual savings for the container shipping industry with 50% eBL adoption. On Tuesday the nonprofit announced the launch of a collaborative effort to push for those savings through eBL standardization and implementation.
“Interoperability between all stakeholders”
“For any robust technology, such as blockchain or digital ledger, to safely deliver an eBL from end to end, data modeling and transmission standards need to be in place. If everyone who touches the eBL is using the same data format and communication standards, it can be transported seamlessly regardless of preexisting relationships between stakeholders. Digital standards will enable interoperability between all stakeholders, such as system providers, shippers, carriers, banks and regulators,” DCSA said.
As part of this initiative, DCSA will develop open-source standards for necessary legal terms and conditions as well as definitions and terminology to facilitate communication among customers, container carriers, regulators, financial institutions and other industry stakeholders.
“DCSA’s mission is to drive alignment and digital standardization to enable transparent, reliable, easy-to-use, secure and environmentally friendly container transportation services. Digitizing documentation, starting with the bill of lading, is key to the simplification and digitization of global trade,” said DCSA CEO Thomas Bagge. “The transformation that has taken place in the airline industry is an example of what’s possible if we work together. The e-AWB is now the norm rather than the exception among air carriers.”
About the Digital Container Shipping Association
Based in Amsterdam, DCSA was launched in April 2019 to create common information technology standards. Its nine members — CMA CGM, Evergreen Marine, Hapag-Lloyd, HMM, Maersk, MSC, ONE, Yang Ming and ZIM — make up about 70% of global container ship capacity.
In January DCSA released its first set of open standards, guidelines on processes, data and interface standards for tracking and tracing ocean containers.
In March it issued a guide designed to facilitate vessel readiness to comply with the International Maritime Organization Resolution MSC.428(98) on Maritime Cyber Risk Management in Safety Management Systems.
Bagge, who joined DCSA from Maersk, said an eBL guide will not be issued until the organization has completed gathering information from stakeholders.
“We intend to spend until the end of the summer basically analyzing the main pain points of the industry … to understand what they see as a need and the opportunity there,” Bagge said. “We want to make sure that people are heard and it’s an industry with many stakeholders.”
Conversations will take place with customers as well as providers.
A call for change
“The shipping industry has been quite impressive in helping to drive down costs, but from our point of view, the next round of that must come from an improved customer experience,” Bagge said.
He pointed to other industries that have successfully improved the customer experience through technology.
“Our smartphones work all over the globe now. In the 2000s, they didn’t. We had to have different SIM cards in Europe or the U.S. or Japan. Thanks to digital standards, that has been removed now. We also have it in banking, where we use IBAN codes to transfer money all over the world,” Bagge said.
Customers and regulators are clamoring for similar gains in container shipping. Bagge referred to a recent meeting with U.S. Customs and Border Protection in which he was told of “the challenges they have with receiving analog-driven data from paper bills of lading. … The data quality is really, really poor. They really, really want to see this.”
Better data and increased visibility would prove vital in situations in which dangerous goods cause fires or other onboard mishaps.
“I foresee a world where you are held liable for the information you provide to shipping lines so … if you’re shipping dangerous goods, you will be held liable for what you put in there,” Bagge said.