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DCSA CEO Thomas Bagge outlines key steps and challenges on the road to full shipping digitalisation

Despite the pandemic proving to be a shot in the arm for digitalisation across the supply chain and logistics sector, huge strides still need to be made in some areas. One relevant example here is arguably shipping, where only a small percentage of bills of lading are currently being issued in an electronic format.

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One entity formed to change this is Digital Container Shipping Association (DCSA), whose members include most of the world’s major shipping companies; MSC, Maersk, CMA CGM, Hapag-Lloyd, ONE, Evergreen, Yang Ming, HMM and ZIM.

Together, via their membership in DCSA, the 9 companies have agreed to do their utmost to meet the target of 100% use of standardised electronic bills of lading by 2030.

McKinsey estimates that switching away from the transfer of physical paper bills of lading (B/L) could save $6.5 billion in direct costs for stakeholders, enable $30-40 billion in annual global trade growth, transform the customer experience and improve sustainability.

However, a lot remains to be done. In its press release regarding the 2030 target, DSCA notes that only around 1.2% of bills of lading were electronic as recently as 2021.

Given the scope of the challenge ahead, many questions naturally arise as to how electronic bills of lading can become commonplace over the coming years. How quickly can the share of electronic bills of lading increase? What issues need to be addressed to encourage more use of electronic bills of lading? What are the key milestones of the road to the 100% electronic bill of lading target?

To get the answers to these questions, as well as learn what benefits electronic bills of lading (eBLs) can unlock, we quizzed Thomas Bagge, CEO of Digital Container Shipping Association.

Read on to learn:

  • The cost and environmental benefits of eBLs
  • How the existing paper B/Ls present organisational and logistical problems
  • Why eBLs are just part of the equation when it comes to the digitalisation of shipping
  • How industry players can be convinced to embrace eBLs
  • The milestones on the road to DCSA’s 2030 target
  • Why common standards are so important

Thanks for talking to us at, Thomas. First up, one would presume that the rollout of eBLs has the potential to drive down costs. Amid the inflationary pressures we’re seeing at the moment, any efficiency savings are more than welcome. So to what degree will eBLs bring about reductions in cost?

In the report from McKinsey, I believe they called it at around 6.5 billion dollars in direct costs from the bill of lading. So if we take that at face value, then evidently, there’s quite some benefits to be gained from the ecosystem.

Cost for us is naturally one key aspect. There’s nonetheless a couple of other aspects that are really important, like the customer experience.

The bill of lading in its current function is 400 years old. By digitalising that, the nine member CEOs are coming together and saying, we want to do this, and we want to do it in an interoperable way, thereby taking a big step forward into the digitalisation of global trade. That will significant improve the customer experience of international trade, something I personally believe is more important than cost.

Then there’s the sustainability aspect as well. There are companies that we represent that issue bills of lading in Hong Kong, and the bill of lading is transported to a bank. Next, the bank runs it through a letter of credit process. After that, it is provided to a courier company and driven to an airport. Then, from Hong Kong, it’s flown to Hamburg, for example, before being transported to the corresponding bank, where they do their letter of credit process. Finally, it goes out to be delivered to the consignee.

Of course, there is significant greenhouse gas emission associated with this. Although it is far less than our members otherwise emit via shipping, we can’t forget that customers of the industry want to reduce their scope three emissions. This is therefore one piece of the puzzle, while we wait for more sustainable fuel types to be implemented.

What typical issues can occur with physical bills of lading that don’t apply to the electronic equivalent?

Well, there’s a number of things that can happen with a paper bill of lading.

Our nine members don’t all run the same processes. Some will issue the bill of lading in Hong Kong and hand it over to the shipper, who will then pass it on to the bank. There’s also other processes, where the bill of lading is actually printed at the destination. So there’s many different ways of doing things.

Some of the problems with physical documents is that they simply get lost or delayed. We all know the difference cloud computing has made, you only need to look back to when it was a disaster trying to bring over all your contacts to a new phone.

Then there’s the real errors that are put on bills of lading, which is not insignificant. You have misdeclarations, which may pose a real threat to people, equipment and the environment.

Moreover, as shipping instructions may come handwritten, some documents may not be legible. Then mistakes are made when people type in the wrong things.

If we take banking as an example, that’s an industry more advanced than container trade in terms of digitalization. However, if you want to transfer money to someone using your bank, and you make a mistake, the bank has nothing to do with it.

You may correct it, but ultimately, it’s your problem. That’s something that I think we can also learn from. We can put the responsibility on where the data originates from and not where it’s typed in – besides not having a piece of paper where it may get lost.

What will it take for you to reach the 2030 target on time?

There’s no doubt it is an ambitious target. If you compare it to the airline industry, they started back in 2010 with the electronic Air Waybill and right now they’re at around 70-80%, I believe.

The first miles are hard ones here. To be very honest, we need to get momentum among those that need to either build a native capability to produce an electronic bill of lading in house, or contract with a company to get that done. Those are things that they’re going to have to do first before they can get rolling.

The plan for this year is to get to 5%; that’s the next hurdle that we’re working on with our members. We have the backing of the CEOs who signed up their organisations for this journey, which gives a big level of comfort.

The goal then becomes 50% for 2027. Only at the end of the decade do we expect 100%. Whether we reach exactly 100% or whether there are non-digitised pockets here and there is a minor issue.

The point is, if we can do this in China, USA and the European Union, there will be a massive positive impact on customer experience and costs in the industry, as well as sustainability.

Legislation can help too. For example, the Electronic Trade Documents Bill, currently making its way through UK parliament, will legally recognise digital trade documentation as equivalent to paper by mid-2023. The UK is the preferred legal jurisdiction for a majority of B/L’s. So, the Bill is also a major step for achieving 100% eBL. However, other countries still need to follow and need to be aligned with each other.

It’s not only the bill of lading either; this is one out of a series of 20,30 to 40 documents that will ultimately need to become digital. We’re working together with the World Customs Organization, the G7 and the UN. We also cooperate closely with the European Commission and the US Federal Government. This is part of our larger strategy to digitalise trade.

How can you go about convincing the doubters?

One of the reasons the full deployment of eBLs has not happened before is partly because we have not had that unity in the industry to collaborate on a common solution.

I am old enough to remember when the Diners Club credit card was something that could only be used in certain shops. What the credit card companies like Visa, MasterCard, and AmEx and so on did was to come together to create an interoperable system.

This is really what we’re trying to do now. No matter whether your shop has a Visa agreement, you can still pay with your MasterCard. Also, in the airline industry, if you fly with one major airline, you can also fly with the airlines’ alliance partners and only have to pay once because they will solve it behind the scenes.

This is the same thinking we are now applying to this industry. The nine members have come together to agree on standards. There will be technology service providers that customers can choose. However, if a bill of lading has to be transferred between two parties, the technologies will be technically interoperable.

This has been shown via the recent interoperability pilot with Exxon Mobil in which a shipment was made from Singapore to India. We had an electronic bill of lading using two providers between two carriers, a consignee and a shipper. It showed that technical barriers can be overcome.

Transferring a bill of lading from one system to another is only possible if the standards foundation is in place.

The second thing we’ve done regards legal interoperability. It’s important that in one system you don’t have certain legal obligations that don’t exist on the other system. We are working with technology service providers and the P&I Clubs to strive for legal interoperability.

Those are some of the things that have been challenging and remain so. Even so, the fact that the CEOs of these nine companies have come together and committed to creating an interoperable environment is a very strong signal for the industry.

Where do you feel eBLs will take longer to become the norm?

What we typically see with technological changes is an S curve. It’s slow, you gain momentum and that takes off before tailing off again at some points.

There will be places where there might be incentives to keep paper, where there could be facilitation fees for example. It will be more difficult to root out those things.

Interestingly, I was speaking at the IMO (International Maritime Organisation) in early January, and I was really encouraged to hear some of the actions that were taken by the port authorities in e.g. Djibouti,

I think the fact that they are taking these digital steps is enormously encouraging. It’s not because they carry a lot of the cargo either. The major trade lanes are between Asia, Europe, and North America, so it is important for the industry to focus on these.

A few ventures aimed at digitalising shipping have experienced varying degrees of success in recent years, with some falling by the wayside. This has sparked plenty of talk about the use of technology and supply chain visibility, with blockchain in particular coming in for scrutiny. What can the industry learn from this as the digitalisation journey continues?

Although crypto has been under fire a lot recently, I personally believe blockchain still has a lot of interesting properties that can be used in our industry.

We’re talking about many actors that would like to access the same information. Blockchain is very good at keeping that ledger and making sure that nothing changes in that ledger. On the flip side, putting a track and trace event on a blockchain can be very expensive.

I’m not worried by any digitalisation ventures that didn’t quite work out as I know the major shipping companies are still committed to digitalisation.

Another thing that was evident when we created DCSA was that if one shipping company comes up with a solution, none of its competitors will want to buy it. We therefore needed to create a neutral, non-for-profit organisation that would not be seen as a threat.

So that’s what we’ve done now, and we’re delighted to have so many key players working together towards the same goal.