News / DCSA: regulatory ambivalence proving a barrier for eB/Ls

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The Digital Container Shipping Association (DCSA) has admitted that electronic bills of lading (eB/Ls) will require greater support from governments to get over the line.

eB/Ls are designed to cut down on paperwork, which would solve a number of other problems involving lost, damaged or forged bills of lading.

According to DCSA’s new report, paper B/Ls are responsible for 28,000 trees being felled annually and significantly add to the carbon cost of every shipment around the world.

This even exposes trade to geopolitical blockages, Niels Nygens, DCSA head of digital trade, told The Loadstar.

“During the pandemic, a lot of cargo was stuck in ports, primarily because there were fewer aircraft movements to carry bills of lading from one end of the world to the other. In modern times, we do not need to rely on planes to carry paper documents.”

Some $40bn of global trade growth could be unlocked by switching to eB/Ls, DCSA projects. But despite this, governments have been generally ambivalent toward them, with only a handful of countries addressing the issue in legislation.

Taipei, Germany, Korea, Singapore and the UK, through its recent Electronic Trade Documents Act, have made explicit laws to ensure eB/L adoption is possible. 

Only two countries, France and the Netherlands, have legal frameworks which have explicitly prevented eB/L adoption. The majority, including Canada, China, Hong Kong and Israel, “implicitly” allow them, but did not endorse either option.

“Although this approach is commendable from a commercial perspective, it still forms a barrier, due to having too much legal uncertainty and the private sector (especially banks and insurers) wanting to take ‘the safe route’ and still rely on the traditional paper B/L,” said the report.

DCSA highlights the cases of Korea and Singapore, whose governments were early adopters of eB/Ls in principle, as early as 2007.

“Despite this, the stakeholders within those countries are still hesitant,” DCSA said. “Korea and Singapore are two jurisdictions which made the use of the eB/L possible early on… despite these jurisdictions being frontrunners, the use of the eB/L in practice remains equally low as in other jurisdictions.

“Therefore, it can be concluded that the private sector considers the conditions for eB/L usage either too restrictive or prescriptive compared with traditional, paper-based BLs, and thus a barrier to the use of the eB/L.”

eB/L adoption has also seen resistance from smaller freight forwarders, whose ability to respond nimbly to shifts in the supply chain pose a distinct business advantage. Some actively oppose 100% eB/L adoption on the grounds that it will cede control to larger businesses, or even shipping lines themselves.

“Only a few hard barriers for the use of the eB/L remain, and where they do they are being addressed and should be resolved within a short term,” concluded DCSA’s study. “…legislators and governments are collaborating with the private sector to further enable and encourage the digitalisation of trade and transport.

“These efforts remain relevant to achieve 100% eBL, according to the DCSA definition, by 2030.”