Digital Container Shipping Association (DCSA) has released a report which explores legal and regulatory barriers to electronic Bill of Lading (eBL) adoption.
Summary of the report
On February 15 2023, the Digital Container Shipping Association (DCSA) announced its nine ocean carrier members’ commitment to the 100% adoption of an electronic bill of lading (eBL) by 20301, based on DCSA standards.2 Switching away from the transfer of physical, paper-based bills of lading (B/Ls) could save stakeholders around $6.5 billion in direct costs, enable $30-40 billion in annual global trade growth3, transform the customer experience and improve sustainability.
Possibilities today
eBLs have been in use for roughly two decades already. This is made possible by many existing solutions which enable the use of an eBL using contractual arrangements, even in jurisdictions where the eBL is not officially recognised as such.
However, uncertainty still remains regarding recognition of the eBL, including its function as a document of title and the rights it provides its users. This uncertainty, paired with regulatory challenges, has so far caused market uptake of the eBL to be relatively low, despite the obvious benefits as described above.
Legal and regulatory barriers for the eBL
A number of barriers to achieving 100% eBL4 (according to the DCSA definition) remain and not all of these can be addressed by the industry itself. Notably, legislation and government procedures can complicate or even prevent the use of the eBL. With support of international law firm Baker McKenzie5, DCSA conducted research to pinpoint legal and regulatory barriers from a broad perspective.
According to the research, the use of the eBL is possible in all surveyed jurisdictions. However, different barriers in different areas are still in place, leading to uncertainty. The good news is that huge momentum in trade digitalisation is apparent in these jurisdictions, and a lot of existing barriers are being addressed, either through legal reform, regulatory changes or international initiatives being implemented.
As the research shows, in some jurisdictions, eBLs are not accepted as a matter of law in case of commercial disputes. In others, there are elaborate requirements that must be met to validate an eBL, leading to a possible negative business case when compared with paper. In many cases, while the use of an eBL might be possible, it is not explicitly mentioned in legislation.
In addition to presenting issues in a commercial context, government bodies such as customs, tax and transport authorities rely on the BL and its contents for proof of compliance with a wide range of rules and regulations, which further compounds legal complexities.
Looking forward
The DCSA ‘Overcoming legal and regulatory barriers to eBL adoption’ report provides insight into the current status of the rules, regulations and procedures impacting the uptake of the eBL in 15 legal jurisdictions, which together account for 60% of global trade. The report also provides best practices and recommendations for addressing them.
To some degree, most jurisdictions in the world have barriers that must be overcome. In order to achieve 100% eBL adoption, laws and procedures that prevent the use of the eBL must be identified and addressed.
In any case, as described above, solutions for the use of the eBL are already in place today. DCSA sees these solutions, together with the legal atmosphere and reform undergone in several jurisdictions, as complimentary. Therefore, DCSA urges stakeholders involved in trade not to wait for legal reform or for a certain barrier to be solved, but rather to join the eBL and trade digitalisation movement.
Click here to download the report
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Source: DCSA
