Technological advancements have led to new possibilities in the international shipping industry for centuries. The shipping industry has constantly evolved from the invention of large cargo ships to the creation of containers in the 1950s. Paperless shipping has recently surged in popularity, and many top carriers have followed the trend. Nine of the largest ocean carrier companies have even committed to a fully electronic bill of lading by 2030. The bill of lading, or BL, is traditionally a document that a carrier issues on physical paper. A completely 100% electronic BL is a milestone in shipping and can lead to a fully digital supply chain in the future.
During the coronavirus pandemic, digitalization became increasingly necessary for shipping companies. This is due to how supply chains were affected by Covid-19. When lockdowns happened in countries globally, carriers packed ports with thousands of containers. The reason behind the crowding was the cancellation of countless flights carrying BL documents. BLs are necessary to release the containers from ports, and Covid-19 limited the amount of BLs sent, causing a backlog.
A record number of international shipments from Covid-19 further increased the backlog. The effects of the containers stranded in ports were incurring demurrage charges, lost sales, and higher working capital for shippers. With the time spent sending a physical BL document, a digital BL could have alleviated many issues. A study reported that stakeholders could have saved $6.5 billion in costs and allowed for $40 billion in international trade.
Modern-Day Benefits of Electronic Bill of Ladings
The most prominent carriers are transitioning to paperless BLs because of the benefits offered. As previously described, sending physical documents to ports and customs may be time-consuming. One of the main advantages is that digitalization allows for the immediate transmission of documents such as the BL. An increase in one of the supply chain parts can mean the entire supply chain becomes quicker. Speed is also one of the critical factors that a shipper looks for when deciding on a freight forwarder.
Another benefit of digital BLs is the enhanced level of security. Various electronic BLs are stored and transferred over blockchain platforms and cloud storage, which are protected. The high security also lowers the chances of fraud since the documents are secured by blockchain technology and signed electronically. Digitization also allows for fewer mistakes because autocomplete functions and form fields are possible when using digital programs. Eliminating errors, reducing paper usage, and removing BL transportation are cost-effective benefits for businesses.
As the world of international shipping continuously evolves and changes, the shipper needs to be up to date with the industry. Understanding the best alternatives for transporting goods can provide supply chain delays and help businesses keep clients. Contact A1 Worldwide Logistics at 305-440-5156 or firstname.lastname@example.org for a quote to move your freight internationally. Our digitalized freight forwarding process helps streamline your cargo’s transport time. We also provide solutions like warehousing and domestic transportation to assist with your shipping needs.