FIT Alliance

The FIT Alliance was formed in February 2022 with five founding members: BIMCO, DCSA, FIATA, ICC and SWIFT. The key objective of the Alliance is to raise awareness and encourage greater use of shipping standards and electronic bills of lading (eBLs) across all sectors of the shipping industry.

FIT Alliance press releases to date:

15 January 2022 FIT Alliance launch

5 September 2023 Launch of eBL Declaration

Declaration of the electronic Bill of Lading

On 5 September 2023, the FIT Alliance launched a “Declaration of the electronic Bill of Lading”. The adoption of eBLs by industry stakeholders can help make international trade more efficient, reliable, sustainable, and secure.

The aim of the declaration is to secure commitment from all stakeholders in international trade to collaborate on driving digitalisation.

Every year, ocean carriers issue around 45 million bills of lading, one of the most important trade documents in shipping. Currently, many international shipping documents are not standardised, and the majority are still paper based. The adoption of eBLs will enable the trade industry to benefit from faster transactions, cost savings and lowered fraud risks.

In 2022, only 2.1% of bills of lading and waybills in the container trade were electronic. This is despite the fact that end-to-end digitalisation of trade documentation will cut costs, make international trade more efficient, reliable, secure, sustainable and less susceptible to illegal activity or fraud.

In the dry bulk sector there are some encouraging signs of growth. Four of the world’s largest mining companies are already carrying around 20% of their iron ore shipments on eBLs.

A McKinsey study estimates that if eBL achieved 100% adoption in the container sector alone, it could unlock $30-40 bn in global trade growth by reducing trade friction in the container trade alone. It could also help save 28,000 trees per year, equivalent to around 39 football fields of forest, and significantly reduce carbon emissions by eliminating paper. 

“A universal eBL will benefit all stakeholders involved in the global supply chain whether in bulk shipping or container shipping. Achieving widespread adoption of a standards-based eBL will benefit not only the shipping industry, but also the global movement of goods, at a time when supply chain resilience is challenged,” the FIT Alliance says.

“This declaration is a significant symbol of our joint dedication to shape the future of shipping. Transforming document exchange through a globally applicable eBL will accelerate trade digitalisation to the benefit customers, banks, customs, government authorities, providers of ocean shipping services and all other stakeholders.”

As many of the technical and legal obstacles to universal eBL are already being addressed, a clear commitment to digitalisation from everyone involved in international trade is a crucial next step. By signing the FIT Alliance eBL Declaration, all stakeholders can publicly signal their readiness for change and their commitment to collaborate to drive digitalisation within their industries.

Find out more here www.fit-alliance.org

Survey: FIT Alliance reveals strong interest in eBL, pinpoints obstacles to address

In June, the Alliance issued a survey [1] to members of its respective organisations to gauge awareness and adoption of eBLs, as well as factors that hinder adoption. The survey results show some promise for growth in eBL use but clearly identify obstacles that the industry must address for eBLs to gain mainstream acceptance. This valuable input will assist the Alliance in ensuring the needs of its membership are met as it collaborates to standardise the digitisation of international trade.

How widespread is electronic bill of lading use?

Awareness of eBLs is high - three out of four respondents have heard at least some (up to a great deal) about them, and 94% have heard at least a little. A closer look at the numbers reveals that 28% of respondents already use eBLs in conjunction with paper. The task now becomes to accelerate adoption by this group, so they can join the 5% who have already made the full transition to eBL. Fortunately, a majority (58%) of those using only paper B/Ls report their organisations have plans to use eBLs in the future, but only just over a fifth (22%) say this will be within the next six to 24 months.

The advantages of digitisation are also well known. When asked what could be achieved through eBLs and wider trade digitisation, an overwhelming 86% of survey respondents identified increased speed, while 78% cited process efficiencies, 73% improved customer experience, and the same percentage, cost savings. Nearly nine in ten respondents (86%) said they believe eBLs can/will unlock wider trade digitisation.

What hinders electronic bill of lading adoption?

To close the gap between what respondents think eBLs can deliver and their actual usage of them, the industry must address the key factors that hinder adoption, which were also identified in the survey.

1.       Concerns about technology, platform and lack of interoperability

The top reasons for not using eBLs, or not using them more, can be grouped as technology, platform or interoperability concerns. These concerns were cited by almost three-quarters (73%) of respondents. Whilst the concerns pointed to different factors such as the need for more education about the security and technology aspects, platform choices or costs, they illustrated that organisations are hesitant to move forward because they do not want to “choose wrong” on eBL solutions.    

Although there are currently seven well-established eBL platforms in the industry, each one is a “walled garden”, with its own proprietary technology and bylaws that govern the relationships between the stakeholders involved in a transaction.

What this means in practice is that parties that want to exchange an eBL must all subscribe to the same platform. If the shipper uses platform A, the consignee platform B, the trade finance bank platform C and the carrier platform D, they cannot use an eBL, as it cannot be transferred between different platforms.

Signing up to use multiple platforms requires significant time and resources: getting the legal department to read through and approve the platform’s rulebook, and training personnel to use the new platform.

There is little doubt that interoperability between platforms would make the adoption of eBLs more appealing to a new generation of users. Technical interoperability is therefore key to both eliminating the need to sign up with multiple platforms and reducing the fear of vendor lock-in.

Technical standards are needed to create a structure for the transfer of standards-based eBLs between platforms, and DCSA, along with carriers, solution providers and ExxonMobil, are working on an eBL interoperability proof of concept (POC) to put these standards into practice in real-life scenarios.

Prior to the interoperability POC, the FIT Alliance had already aligned on the bill of lading data standards developed by BIMCO (for bulk and liquid shipping), DCSA (for container shipping) and FIATA (for B/Ls issued by freight forwarders). This was an important milestone in the FIT Alliance’s work to speed up adoption by ensuring that shippers and other stakeholders shipping different types of cargo can leverage the same set of data standards. In addition, BIMCO and SWIFT are planning their own eBL interoperability POC based on DCSA standards.

2.       Insufficient adoption by other stakeholders 

Since an eBL must flow through the hands of many stakeholders, a hurdle to eBL adoption is insufficient adoption by other stakeholders in the ecosystem. A majority (63%) of our survey respondents cited lack of stakeholder readiness as a key reason for not using eBLs, or not using them more, making it the second most cited reason.  

The solution to this standoff is simply for companies to embrace standardisation by actively contributing to and driving standards implementation within their own organisations. Shipping standards are available now, and the FIT Alliance’s mission is to drive rapid adoption of these standards within their member organisations, as well as industrywide, to accelerate maritime digitalisation and the benefits it will bring.

Those benefits are compelling. When asked what the most important advantages of eBLs compared to paper BLs are, participants identified increased speed, cost savings from process efficiencies, and improved data accuracy due to the elimination of manual data input.[2]

At a global economic growth rate of 2.4% through 2030[3], DCSA estimates the container shipping industry could potentially save more than $4 billion per year with 50% eBL adoption. What’s more, McKinsey’s recent analysis estimates that a commitment to 100% eBL adoption could unlock around $18bn in gains for the ecosystem through faster document handling and reduced human error among other improvements, and $30-40 bn in global trade as digitisation reduces trade friction.[4]

With standards as a framework for digitisation, the industry has a clear path forward to widespread eBL adoption and a future empowered by paperless trade for more sustainable shipping.

3.       Legal acceptance of the electronic bill of lading

Legal gaps were the third most cited reason for not using eBLs, selected by 55% of survey respondents. The United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Transferable Records (MLETR) offers a legal framework that can be adopted by countries to enable electronic documents to be recognised as legally equivalent to paper documents.

In reality, even though MLETR is not yet widely adopted, it does not pose an obstacle to eBL adoption today. eBL solution providers already have legal frameworks in place to enable eBL adoption and legal interoperability.

Nonetheless, the world saw a significant and positive boost when the UK government announced its intention to legalise digital trade documentation. 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. This paves the way for widespread adoption of eBL for all sectors and industries using English law as a basis for international contracts, which includes 80% of bills of lading [5], much of world trade and several leading ocean carriers.

Next steps

eBLs are an important part of the journey towards maritime digitisation. The COVID-19 pandemic highlighted the inefficiencies of the current paper-based system, but these inefficiencies must not be viewed in isolation. Switching from paper bills of lading to eBLs will benefit international trade in innumerable ways by increasing speed, lowering administrative burden, lessening legal risk, and reducing illegal trade and carbon emissions.

Sending physical paper around the world is not sustainable – and today, completely unnecessary. Paperless trade enabled by 100% eBL adoption can save 28,000 trees per year, equivalent to around 39 football fields of forest.[6]

Following the survey, the FIT Alliance is reaching out to survey respondents and other industry stakeholders to get a deeper understanding of their current challenges and collaborate on actions to move eBL adoption forward.

Contact FIATA with insights about what your organisation needs to take the next step towards eBL adoption.

FIT Alliance member interviews

BIMCO: how carriers benefit from the Future International Trade Alliance

DCSA: The Future International Trade Alliance explained

FIATA: what the Future International Trade Alliance means for freight forwarders

ICC: what the Future International Trade Alliance means for shippers

 

[1] Survey conducted by independent firm the BRC in June-July 2022. In total, there were 278 participants from banks, freight forwarders, carriers, shippers, agents, consignees and others across 66 countries.

[2]Rated very important/important

[3] Source: The Organisation for Economic Co-operation and development (OECD) Economic Outlook database.

[4] Source: https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/the-multi-billion-dollar-paper-jam-unlocking-trade-by-digitalizing-documentation; IHS Markit; Lloyd;s List; European Commission; International Chamber of Commerce (ICC); World Bank; UN; McKinsey Global Institute; interviews with subject matter experts (e.g., in customs); assumptions tested in interviews with carriers.

[5]Source: UK Electronic Trade Documents Bill goes into Parliament; Chris Southworth, Secretary General ICC United Kingdom.

[6] Source: IHS Markit; Lloyd;s List; European Commission; International Chamber of Commerce (ICC); World Bank; UN; McKinsey Global Institute; interviews with subject matter experts (e.g., in customs); assumptions tested in interviews with carriers.