Article written by Kim Link-Wills
Nine carriers in the Digital Container Shipping Association say eliminating paper from transactions will improve all aspects of the process
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.
“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.”
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.
“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.
An eBL could work hand in hand with the internet of things (IOT), said Bagge. He expects great stride in eBL adoption and IOT advancements in the next five to seven years.
“I foresee that in the coming years we will see more and more IOT-enabled containers. You will be able to monitor the temperature in that container, what’s the humidity, what’s the CO2 level and oxygen level, has the container been opened. And I think we will be able to see as you get more IOT, you’ll be able to detect fires better, you’ll be able to respond much quicker, you’ll be able to make people liable for anything that happens,” he said.
DCSA was formed in part so its members could collaboratively push forward new technologies.
“We bring all the nine carriers together and we do that every six weeks. We typically bring them together face to face but we can’t do that these days. We use video conferencing and then we debate. We reanalyze the data first and foremost that we’ve gotten, and we try and envision the future if you will,” Bagge said.
“They share the problems. They’re slightly different because of their IT processes but it’s the same problem they’re trying to solve. I think that’s been very encouraging for us. You could always argue it could be implemented quicker with the carriers or that legislation could be quicker, but it’s not something that keeps me awake at night.”
Thus Bagge does not foresee a problem reaching eBL consensus among DCSA’s various European and Asian members.
“If we compare the front page of the bills of lading, they’re probably 95% identical,” said Bagge, noting that only 27 countries thus far formally have ratified eBL acceptance. “What matters is the U.S. has already ratified it. Many European countries have already ratified it. We do believe there’s certainly enough cargo that moves in those corridors to make a real dent in the paper bill of lading. Our expectation is that there will be fast followers once countries realize the benefits.”
DCSA said eBL progress has been accelerated as a result of the COVID-19 crisis.
“A number of DCSA members have reported a sharp increase in eBL adoption in an effort to keep trade moving. In addition, the International Group of P&I Clubs (IGP&I), which provides indemnity insurance to around 90% of the world’s oceangoing tonnage, has picked up the pace on approving eBL solution providers, with two added in the last six months to a total of six approved so far,” DCSA said.
As Bagge talked during today’s work-from-home world with his four children in the background, he considered the future from an environmental standpoint.
“How are we going to leave the planet for our kids and for everybody else? We have paper all over the world today,” Bagge said. “I think we can do better.”
Original Source: https://www.freightwaves.com/news/shipping-group-promotes-standardized-e-bill-of-lading