DCSA: regulatory ambivalence acting as a barrier to eB/L

The Digital Container Shipping Association (DCSA) has acknowledged that electronic bills of lading (eB/L) will require greater support from governments to overcome these barriers.

eB/Ls were designed to reduce paperwork, which would solve a number of other problems associated with lost, damaged or forged bills of lading.

According to a new DCSA report, paper B/L packaging is responsible for cutting down 28,000 trees per year and significantly increases the carbon cost of every shipment around the world.

This even exposes trade to geopolitical blockades, said Niels Nygens, head of digital trade at DCSA Loadstar.

“During the pandemic, many cargoes have been stuck at ports, primarily due to fewer air operations carrying bills of lading from one end of the world to the other. Nowadays we don’t have to rely on planes to carry paper documents.”

Approximately $40 billion in global trade growth could be unlocked by shifting to eB/L and DCSA projects. Yet governments are generally ambivalent about them, and only a few countries have addressed the issue in legislation.

Taipei, Germany, Korea, Singapore and the United Kingdom have established explicit provisions in their recent Electronic Business Documents Act to ensure the adoption of eB/L.

Only two countries, France and the Netherlands, have legal frameworks that specifically prevent the adoption of eB/L. Most, including Canada, China, Hong Kong and Israel, “implicitly” allow them but did not support either option.

“While this approach is commendable from a commercial point of view, it remains a barrier due to too much legal uncertainty, and the private sector (especially banks and insurers) wants to take the ‘safe route’ and continue to rely on traditional B/L paper,” we read in the report.

DCSA draws attention to the cases of Korea and Singapore, whose governments were generally the first to adopt eB/L back in 2007.

“Despite this, stakeholders in these countries remain hesitant,” the DCSA said. “Korea and Singapore are two jurisdictions that have enabled the use of eB/L at an early stage… even though these jurisdictions are leaders, the use of eB/L in practice remains as low as in other jurisdictions.

“Therefore, it can be concluded that the private sector considers the terms of use of eB/L to be too restrictive or prescriptive compared to traditional paper-based BL documents, which constitutes a barrier to the use of eB/L.”

The implementation of eB/L has also been met with resistance from smaller shippers, whose ability to quickly respond to changes in the supply chain is a distinct business advantage. Some actively oppose the adoption of 100% eB/L, arguing that it will hand over control to larger companies and even the shipping lines themselves.

“Only a few hard barriers to the use of eB/L remain, and where they exist, they are being addressed and should be addressed in the short term,” the DCSA study concludes. “…legislators and governments are working with the private sector to further enable and encourage the digitalization of trade and transport.

“These efforts remain essential to achieving 100% eBL as defined by DCSA by 2030.”