DCSA Predicts $4B in Annual Savings From E-Bill of Lading
The Digital Container Shipping Association (DCSA), a nonprofit independent organization formed to bring innovation to the market, released new research as part of its ongoing effort to establish a standardized e-bill of lading (eBL). Calling for collaboration, the DCSA outlined the benefits and obstacles to achieve the long-held goal of digitization.
As part of its initiative, the DCSA carried out a financial modeling exercise to quantify the potential cost savings that could be achieved switching from a paper bill of lading to eBL. The research estimated that the industry could potentially save more than $4 billion per year if just 50 percent eBL adoption is achieved.
The DCSA believes that by getting started on establishing a standardized eBL that it would be possible to achieve this 50 percent adoption rate by 2030. Eliminating paper from the shipping transaction they point out will make every aspect of commercial container shipping better, faster, cheaper, more secure, and environmentally friendly.
“The COVID-19 situation is bringing the core strengths of a standardized eBL to the fore,” noted André Simha, Global Chief Digital & Innovation Officer for MSC and DCSA Chairman. “Cargo in ports cannot be gated out because of paper that is stuck elsewhere due to airfreight delays caused by the pandemic.”
Recognizing that the first efforts to digitize bills of lading (BL) began in the late 1990s, the DCSA outlined what it sees as the current obstacles for achieving the goal of an industry eBL. They pointed out that some carriers and solution providers have moved forward on a limited scale despite the lack of a standardized approach to digitalization.
The three major factors the research identified to drive adoption, and the obstacles that have slowed the industry adoption, include the lack of robust technology, concerns over legal enforceability, and the need for standardization. The report believes the obstacles can be overcome pointing out for example that new technologies such as distributed ledger technology (DLT), peer-to-peer, and Blockchain offer potential solutions for eliminating the risk of a single catastrophic failure or attack that would compromise the integrity and uniqueness of an eBL. Further the DCSA believes that many jurisdictions require paper because of the lack of industry-standard language and definitions have made it impossible for them to “rubber stamp” an electronic replacement.
Confronting the Covid-19 crisis, a number of the DCSA members, however, have reported a sharp increase in eBL adoption to keep trade moving. To continue the momentum that is building for the adoption of eBL, the DCSA is calling for the establishment of digital standards that will enable interoperability between all stakeholders, such as system providers, shippers, carriers, banks, and regulators.
The DCSA is embarking on an initiative to enable the open collaboration necessary for achieving full eBL adoption. As the next step in its ongoing initiatives, the 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,” remarked Thomas Bagge, CEO of DCSA. “Digitizing documentation, starting with the bill of lading, is key to the simplification and digitization of global trade."
Established in 2019 by several of the largest container shipping companies, DCSA’s mission is to drive technology standards and frameworks that will enable carriers to bring innovative solutions to market.