The Digital Container Shipping Association (DCSA), which includes major carriers like Maersk, Hapag-Lloyd, MSC, and CMA-CGM, recently announced its plan for half of all original bills of lading (BLs) to be in an electronic format by 2028 and 100% by 2030. This step in the digital transformation is an ambitious change for the shipping industry, reducing the reliance on paper documentation and streamlining shipping processes. The implementation of electronic BLs should lead to increased efficiency, reduced costs, and improved security, while the transition also aligns with growing demand for global sustainability. However, since the DCSA’s announcement, many shippers are now wondering what the switch to eBLs means for ocean freight.
What are eBLs?
eBLs, or electronic bills of lading, are digital versions of the traditional paper bills of lading used for shipping. Bills of lading serve as signed contracts between the shipper and the carrier, detailing the goods being transported and the terms of the shipment. These documents can easily be a dozen pages or more and must be shared with multiple stakeholders.
eBLs functionally fill the same role, but as they are created, processed, and stored electronically, they eliminate the need for paper documents, which McKinsey & Company has estimated accounts for 10-30% of trade documentation costs. They also estimate that adopting eBLs could provide a combined cost savings of $6.5 billion annually for all types of stakeholders, making them an attractive option for the freight industry to learn to adopt quickly.
For some, there is always an added appeal to working with paper—it’s concrete, something you can hold. But with the benefits that eBLs offer, related to data management, sustainability, and security, it is easy to see why this is the right direction.
Optimized Data Management
The main problem with paper documents is the need to keep track of a physical copy and manually transfer BL data into digital systems. This manual data entry can lead to errors and delays due to the inefficiency of non-digital processes. eBLs offer increased speed and efficiency for operations, allowing carriers to focus more on their service — providing reliable, on-time transportation. They eliminate paperwork bottlenecks, resulting in better transparency and real-time tracking of cargo. eBLs optimize data management and streamline processes — from shipment bookings to notifications of arrival — leading to more cost-effective operations for supply chain stakeholders.
Sustainable Document Practices
eBLs also help promote better sustainability. By eliminating the need for paper, they reduce the amount of waste created, which can have a significant positive impact on the environment. Instead of physically sending original BLs through the mail, which contributes to greenhouse gas emissions, they can be sent to all stakeholders instantly. eBLs helps companies reduce their reported carbon emissions and better align with sustainability initiatives as well as their own goals, contributing to a more sustainable future.
Reduce Illegal Activity in Ocean Freight
In the category of security and transparency of shipping documents, eBLs can help reduce illegal activity in ocean freight. With paper BLs, documents can be easily lost or altered and used for activity like evading taxes and duties. On the other hand, eBLs provide complete digital traceability, which creates better security. Digital processes make it more difficult for erroneous or fraudulent documents to go unnoticed and help authorities identify and track problems.
eBLs in Supply Chain 4.0
eBLs are a critical component of a digital supply chain strategy and the evolution of Supply Chain 4.0. The shipping industry is increasingly digitizing its operations, with a focus on leveraging technology to improve efficiency, end-to-end visibility, and sustainability. eBLs are a key piece of support for this transformation. With the ability to seamlessly integrate with other digital tools, such IoT devices to provide real-time tracking of shipments and automate many aspects of the shipping process, they reduce the risk of costly errors and fraud while improving the speed and efficiency of handling shipments.
Transform Your Shipping Processes with VIZION API
eBLs will soon be an essential component of competitive supply chains as the global shipping industry continues to digitalize. Shippers can optimize their processes by leaning into this technology as well as visibility and automation.
VIZION API offers real-time shipping container tracking and visibility, along with analytics that lets shippers better understand their operations and turn data into actionable insights for efficiency and cost-savings. With VIZION, shippers can be better prepared for the digitalization of tomorrow.
To learn more about how VIZION API helps transform ocean freight processes with better visibility, reach out to us today to schedule a demo.