Freight transport insurer TT Club has welcomed the target set by the Digital Container Shipping Association (DCSA) that 50% that all bills of lading should be electronic within the next decade.
A DCSA study found that the ocean container industry can save $4bn per year in costs with just a 50% adoption of the electronic bill of lading (eBL), and the Covid pandemic has accelerated the need for eBL implementation.
In a statement, the TT Club said that the DCSA initiative is “consistent with the increased trend towards digitisation” across the industry to improve efficiency and reduce costs.
It added: “However, the current pressures felt through the supply chain as a result of the COVID-19 pandemic have no doubt spurred the action.”
In its role as liability insurer and adviser on risk management throughout the container industry, TT Club is active in encouraging digitisation, including the cumbersome bill of lading processes.
Additionally, the mutual has been providing guidance to operators on the unique practical issues they are experiencing with the physical transfer of bills of lading and other documentation due to lockdowns, government restrictions and other COVID-19 related disruptions.
The club has compiled a dedicated COVID-19 webpage to communicate such advice, including numerous briefings, FAQs and links to further regulatory information.
Peregrine Storrs-Fox, TT Club’s risk management director commented: “As early as the late 1990s TT Club recognised the substantial benefits that would accrue to the entire international unitised supply chain, as well as liner shipping businesses, through the adoption of electronic documentation, taking its part in the foundation of bolero.net.
“This initiative also understood that the bill of lading is but one component in much broader trade practices, including buyers and sellers and, critically, banks. As a result bolero.net has developed a significant array of trade offerings that wrap around the fundamental characteristics that are fulfilled legally in the traditional bill of lading.”
TT Club is concerned that there continues to be such significant reliance on paper-based processes, whether certification, checks, or the range of contractual documents in international trade.
The opportunity for “seismic efficiencies and broader benefits” were explored in TT Club’s joint work with McKinsey & Co, ‘Brave new world? – Container transport in 2043’ which concluded that the future for the container shipping industry was digital.
Added TT Club: “Some advances towards true digitisation have been made over the last two decades, including the formation of DCSA itself, with a mission to bring efficiencies through standardised messaging amongst shipping lines.
“More pertinent to the electronic bill of lading (ebsl) itself, the last few years have seen a proliferation of options being brought to market, mostly embracing to greater or lesser extent the much-vaunted distributed ledger technologies, or Blockchain. It is also clear that TradeLens, the consortium founded by Maersk and IBM, also has ebsl in sight.”
Storrs-Fox concluded: “The current pandemic has inevitably advanced the digital cause. It is entirely reasonable for DCSA to grasp this particular nettle, taking full advantage of the lessons learned over the last two decades.
“Indeed, the plethora of physical documentation and ‘chops’ for every international transport involving sea carriage remain fertile ground for further efficiencies that may yet dwarf those immediately in view.”
