by Lloyd's List

3 September (Lloyd's List) - THERE have to be better reasons to adopt the electronic bill of lading, a lynchpin in digitalising global trade.

At least that is the message conveyed by panellists at a GTR Asia session held in Singapore today.

“The level of interest in utilising eBLs today is still lower than we would expect it to be,” said Patrick DeVilbiss, a trade and supply chain finance expert from consultancy CGI. “It’s more of an issue of adoption rather than technology. It’s an acceptance of how we want to proceed in terms of trade.”

Today, at most 6% of BLs were done electronically, speakers at the conference admitted.

A 2023 survey by the Future International Trade (FIT) Alliance, including BIMCO, of their members, shows that adoption faces three main hurdles.

They are: concerns about technology, platform and lack of interoperability, insufficient use by other stakeholders and legal acceptance of the eBLs.

But some guests privately confessed that this is just an excuse for people unwilling to change.

The biggest obstacle was ignorance, as the vast majority were accustomed to the existing system and unwilling to understand eBLs, said Aster Marine Cargo managing director Krishna Prasad. As a result, they over worry about potential eBL troubles while lacking motivation to change.

“It’s actually an issue of the whole system, all stakeholders are culprits,” he told the audience.

Legal acceptance was not a problem, argued Global Shipping Business Network chief executive Bertrand Chen.

The uptake of eBLs in China had grown rapidly in recent years, which would not be possible if concerns over legality were decisive, he said.

And interoperability between different eBL platforms is also not difficult to resolve, especially when this application scales up.

Chen’s organization, backed by a group of shareholders of shipping lines and port operators, including Chinese shipping giant Cosco, is enabling paperless, accessible and sustainable global trade as its mission.

He attributes the lack of eBL adoption to shippers or consignees.

“They don’t care whether it’s paper or PDF or eBLs, because the value proposition is not clear to them yet,”

Many tout lower costs as the selling point for eBLs, but it is not always the case. Paper bills of lading can be bundled together and sent in batches, while each eBL may cost $10.

“Actually in some use cases in China, they found eBLs could be 10 times more expensive than actually using paper,” Chen told the conference.

Another selling point is environmental friendliness, which is valid but often overlooked, he added. Also, absent another pandemic, eBL efficiency perks likely won’t compel adoption, as paper documents work fine now.

In fact, the primary current use of eBLs is for cargo release control, Chen observed. This stems from how US terminals release containers on just the equipment numbers, raising concerns over fraudulent pickup. So eBL adoption is largely driven by Chinese exporters and freight forwarders trying to secure their boxes.

“If you want eBLs to scale, it’s not about the eBL itself, it’s about underlying data,” Chen said. “If you change that process electronically, what can you do differently? What kind of new services banks and shipping lines can provide that they can’t easily offer using paper?”

The banks, the trade financiers, have never been shy about expressing their desire for trade digitalisation so that they can finance more and easier, yet also recognising the gap from reality.

“We haven’t seen the scale [of eBL adoption],” said Barclays global head of Trade & Working Capital Product & Client Management Jaya Vohra, arguing the initiative of using the technology has so far been largely led by platforms.

“To change the legacy practices, it requires public-private participation.”

Progress is happening, Vohra added, noting major jurisdictions such as the US, Singapore and UK now legally recognising eBLs, with more countries expected to follow suit. But more work remains.

Chen, nevertheless, expects the next 12 months will see much higher uptake of eBLs by the 3PLs and carriers.

Nine of world’s top 10 carriers that make up the membership of the Digital Container Shipping Association, which GSBN also collaborates with, want 50% adoption of eBLs by 2027 and full adoption by 2030.

“At some point, banks have to start to decide what they want to do,” Chen said.