Implementing an eBL is expected to bring significant cost savings for shippers and carriers due to reduced paperwork processing costs and fewer delays caused by manual errors or lost documents.
International shipping is notoriously paper-dependent, with a single shipment requiring up to 50 sheets of paper, in some cases, between 30 different stakeholders. The Digital Container Shipping Association (DCSA), a non-profit organization founded in April 2019 by nine of the world’s largest ocean carriers, has estimated that among these documents, about 16 million original bills of lading (BOL) were issued by ocean carriers, costing the industry U$11 billion per year.
The tide, however, is turning.
DCSA’s core mission is to develop technological standards that allow data interoperability across the industry, enabling digital interconnectivity and seamless information exchange. Its nine members have recently committed to transitioning towards a fully standardized electronic bill of lading (eBL) by 2030.
According to a report published by McKinsey last year, adopting an electronic bill of lading could save $6.5 billion in direct costs and enable up to $40 billion worth of annual global trade growth while revamping customer experience, improving sustainability outcomes, and reducing delays associated with manual errors or lost documents.
To raise awareness and speed up the adoption of eBL by stakeholders, the DSCA formed the Future International Trade (FIT) Alliance. Their research found that several factors slow the acceptance of electronic bills of lading, including a lack of standards, concerns about legal endorsement, technology interoperability, and adoption from other stakeholders. While these concerns are not without merit, the potential long-term benefits are too great to ignore.
What Does the eBL Mean for Small and Medium-Sized Businesses?
The move towards an eBL is part of DCSA’s mission to create a standard technology foundation that enables global collaboration across the container shipping industry. Our CEO at Ship4wd, Carmit Glik, believes digitization will remove some of the frustration small and medium-sized businesses face with international shipping.
In a recent Op-Ed on Forbes, Glik said, “The industry is fraught with pitfalls such as price fluctuations, confusing paperwork, language barriers, unexpected delays with customs, and rapidly changing regulations that can form an Achilles’ heel for these companies.” This will improve communication between stakeholders such as shippers and carriers, increasing cargo shipment efficiency.
Implementing an eBL is expected to bring significant cost savings for shippers and carriers due to reduced paperwork processing costs and fewer delays caused by manual errors or lost documents. Additionally, it could reduce environmental impacts associated with paper production and transportation since physical copies would not be needed.
“Even the most seasoned and sophisticated stewards of global shipping within companies can find it complex, confusing, and cumbersome—terms that have become synonymous with international transport and logistics. Accelerated digital transformation only recently hit the global shipping industry—a community historically hampered by a business-as-usual mentality,” Glik added.
The benefits of creating a standardized digital version of the B/L
Overall, DCSA’s announcement of its commitment to eBL marks a significant step forward in modernizing how the world manages cargo shipments. It could potentially lead us into a new era of digitalized trade with improved customer experiences, benefitting all parties involved. Here are some of the benefits of implementing eBLs:
- Increased efficiency and speed of shipments due to faster documentation uploads, tracking, and sharing.
- Improved accuracy in terms of data storage and retrieval.
- Reduced cost for carriers, shippers, and other stakeholders due to the elimination of duplicate data entry and manual processing.
- Enhanced visibility and traceability throughout the entire logistics process.
- Reduced risk of errors caused by manual handling or incorrect filing.
- Improved collaboration between carriers, shippers, freight forwarders, customs brokers, ports, terminals, etc., further streamlining global logistics operations.
- Potential for real-time notifications related to events such as arrival times or delays in delivery, thus enabling proactive problem resolution.
- Better compliance with global trade regulations and standards due to automated data collection and validation processes.
The eBL is an excellent opportunity to simplify international trade for SMBs and level the playing field. “I’ve noticed the industry is making great strides, and international shipping is ushering in a new era as global trade becomes more operationalized and digitized,” Glik adds. This is good news for small and medium-sized businesses, which are often disadvantaged regarding compliance, speed, and shipping cost compared to large organizations.
DCSA’s commitment to transitioning towards an eBL by 2030 is an ambitious goal that could potentially revolutionize how we do business in the container shipping industry. It will take some time before all stakeholders can adapt. Still, once they do, it should lead to more efficient processes that benefit everyone involved in global trade, including customers who rely on reliable delivery services for their goods.
We at Ship4wd are dedicated to helping small and mid-sized businesses get the most out of their shipping processes. Regardless of their experience in logistics, business owners can count on us to get their shipments to where they need them.