The global shipping and freight industry has been sluggish with the adoption of electronic trade documentation, a key component of which is Electronic Bills of Lading.
Although the carriers, solution providers, and, in some cases, the law are ready, adoption, which is a vital step toward digital transformation and efficiency in the industry, has been slow.
One of the reasons or barriers often cited by some of the stakeholders for the adoption is “interoperability”– the ability for electronic trade documents to be issued or curated on one platform to be seamlessly transferred to another while retaining its legal and operational characteristics.
Well, that issue seems to have been surmounted based on two major milestones achieved in this area through the demonstration by key players that interoperability is now a reality.
Two milestones for interoperability
In the first milestone, OOCL (part of the Cosco Group) successfully executed their first eBL using a cross-platform.
In this first-of-its-kind transaction in container shipping, OOCL, as a carrier, used IQAX and the DCSA standards as a base to issue an eBL governed by English law to a major oil and gas company.
This eBL was transferred to the shipper who was on ICE CargoDocs, which was then subsequently transferred to its customer Deqing Sunny Plastics for surrendering back to OOCL with the transfer secured by GSBN.
As per ICE Digital Trade, this transaction delivered on all 4 of the key components of eBL interoperability:
- Technical:
o The 3 solution providers have architected a secure solution that ensures that there is only 1 original eBL, which the lawful holder controls at all times
o eBL handover between ICE CargoDocs and IQAX eBL via GSBN to guarantee immutability and security of cross-platform eBL transfer
o GSBN serves as a control tracking registry, maintaining a complete audit trail of the platform transfer status of interoperable eBLs on its blockchain - Legal: The OOCL original negotiable eBL was governed by UK Law, which recognized eBLs as having the same rights and obligations as paper BLs under the UK’s Electronic Trade Documents Act 2023
- Liability:
o ICE Digital Trade and IQAX agreed on a robust inter-platform liability agreement that identifies the obligations of each platform and ensures that the right platform is responsible for losses and can pay
o GSBN as the control tracking registry undertook to securely record all platform transfers, and operate on a utility basis - IG P&I Approval: The approach was approved by the IG, ensuring that OOCL remained within the terms of its P&I Club cover
As Karen Lam, Managing Director of OOCL for Asia, Southeast Asia, and Bangladesh, stated, “Participating in the interoperability of the eBL solution aligns with our commitment to innovation and excellence. This achievement, facilitated by blockchain-enabled infrastructure from GSBN, addresses the legal and liability challenges that have previously slowed adoption and paves the way for more efficient, secure trade practices.”
Bertrand Chen, CEO of GSBN, emphasized, “Achieving eBL interoperability is the missing link to achieving widespread eBL adoption. This go-live demonstrates that GSBN’s blockchain-enabled infrastructure can address the legal and liability challenges head-on, ultimately enhancing the customer’s experience by enabling them to realize the vast benefits of eBL while remaining in their preferred solutions.”
Emphasizing that the aim will always be to deliver interoperable solutions that are legally sound, and technically resilient with a robust and transparent governance structure, Marina Comninos, Co-Head, ICE Digital Trade, said, “Interoperability is essential for scalable eBL adoption in liner, and collaboration is key to achieving this goal. The launch of our Interoperable eBL Solution marks just the beginning of the journey: we are excited to continue working with our trusted partners at IQAX eBL and GSBN, as well as other providers across different geographic and industry segments, to bring value-add solutions to the industry. ”
Lionel Louie, COO, of IQAX, said, “IQAX believes that interoperability is vital for advancing global trade digitalization. By championing eBL interoperability, we reduce risks and costs while fostering a more inclusive and efficient global trade ecosystem where multiple platforms can collaborate seamlessly.”
In the second case, an original negotiable eBL governed by Singapore Law was issued by PIL on ICE CargoDocs. This eBL remained on ICE CargoDocs, and the customer Mitsui accessed the eBL via CrimsonLogic’s platform, utilizing ICE’s partner APIs. This approach ensured seamless integration and access across different systems.
Commenting on the achievement, Varun Sahai, Assistant Vice President and Head of Trade (Business) Products, CrimsonLogic, added, “We are excited to lead this consortium in developing an interoperable electronic bill of lading solution, collaborating closely with our strategic partners to drive digital transformation in global trade.”
Mr. Mikio Hamamoto, General Manager of Logistics Strategy Dept., Mitsui, said, “We are pleased to have participated in this pioneering initiative that marks a significant step forward in the adoption of eBL. Our focus remains on the broader potential of eBLs to revolutionize the shipping industry.”
Why does interoperability matter..??
The ability to securely transfer eBLs across different platforms is a major step forward in eliminating the barriers that have historically hindered the widespread adoption of eBLs in containerized trade.
Bulk shipping has made significant inroads in this area, with BIMCO’s 25×25 campaign already achieving its goal in 2024, with major mining companies like BHP, Rio Tinto, Vale, and Anglo-American shifting 25.1% of their annual iron ore trade volume to China using eBLs.
The success of this cross-platform eBL exchange marks a major leap towards achieving the industry’s goal of 100% eBL adoption by 2030. With digital solutions gaining momentum, it is clear that the industry is moving towards a more streamlined, secure, and efficient future for cargo transactions.
Impact on the future of trade
The seamless interaction between platforms is an essential part of the digital transformation in the maritime industry.
As these solutions continue to evolve, the shipping industry will see significant improvements in efficiency, cost-effectiveness, and security. The interoperability of eBLs not only simplifies the processes but also mitigates risks associated with paper-based systems, fostering greater trust and transparency in global trade.
With the success of this cross-platform eBL transaction, the road is now clear for more shipping lines and stakeholders to adopt eBLs in their operations. The collaboration between the various parties involved represents a pivotal moment in the journey toward digitalizing global trade.
As more companies embrace this innovation, we can expect to see smoother, faster, and more secure transactions that will benefit all players in the supply chain.
