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The world’s largest shipping lines could trim their annual greenhouse gas emissions by switching to electronic bills of lading (eBLs), fresh data shows, yet multiple factors are limiting widespread adoption of digital trade documents.

Last year, nine of the world’s major ocean carriers, representing nearly three-quarters of global containerised trade volumes, made a formal commitment to reach 100% usage of the eBL by 2030.

In a whitepaper commissioned by Hong Kong-based consortium Global Shipping Business Network (GSBN) – and published on April 11 – consultancy firm Sia Partners outlines the sizeable environmental benefits such a shift could yield for the sector.

Were all shipping carriers – including major hitters such as Maersk, Hapag Lloyd and CMA CGM – to digitise their estimated 15.8 million paper BLs issued annually, the industry would reduce CO2 equivalent emissions by up to 440,820 metric tonnes per year, the research finds.

This would be close to the yearly greenhouse gas (GHG) emissions generated by the European country of Andorra, it adds.

Last year, global shipping industry regulator, the International Maritime Organization (IMO), set a sector-wide target of net-zero GHG emissions by or “around” 2050, scaling up a previous goal of halving emissions by this deadline.

To date, much of the focus in the sector’s decarbonisation push has been placed on a drive towards climate-friendly fuels such as methanol or ammonia, which for now, remain commercially unviable. According to estimates, the industry accounts for nearly 3% of global GHG emissions.

But the GSBN paper, titled ‘The Impact of Digitalization in Driving Decarbonization in Shipping,’ flags paper-based trade documents are another key problem area that must be addressed in the coming years.

“Fossil fuel combustion through maritime transportation is not the only source of GHG emissions in the shipping industry… [They] are also emitted along the end-to-end value chain, including, but not limited to, cargo handling in ports, packaging processes and physical handovers of shipping documents.”

eBL usage remains low – just 2.1% of BLs and waybills were issued electronically in 2022 for containerised trade. Nonetheless, the removal of legislative barriers is expected to improve adoption rates.

With the industry currently lacking a framework for calculating GHG emissions produced by paper-based trade documents, the researchers devised a methodology for quantifying the emissions generated across the full lifecycle of eBLs and another paper-based document – a delivery order (DO).

For instance, they estimated emissions produced from printing the trade documents; physical handovers by air, road or sea; and even the recycling of the paper.

They also established parameters for calculating the environmental cost of an eBL and an eDO throughout their lifecycle, including emissions linked to the power consumption of a platform that uses blockchain.

Researchers then deployed their methodology to estimate the likely emissions generated by three original copies of a master BL for a cargo shipment from Shanghai, China, to a buyer in the Dutch city of Rotterdam – and then forecast the environmental impact of an eBL and eDO for the same trade flow.

They found the potential CO2e reduction per eBL is about 27.9kg and approximately 16.9kg for an eDO.

Using a digital format almost eliminates all emissions, the data suggests, with a reduction of over 99% for each document type.

The bulk of emissions reductions were rooted in stopping the physical handovers of printed documents between maritime supply chain entities, including carriers, freight forwarders, shippers, consignees, participating financial institutions, as well as ship and cargo agents and terminals.

Such meetings may require a courier to travel by scooter or car, or even by air or sea, the paper says.

The paper estimates MSC handles 3.2 million BLs per year, Maersk about 2.4 million, CMA CGM around 2 million, Cosco 1.7 million and Hapag Lloyd about 1.1 million.

As such, adopting eBLs could yield “sizeable abatement” benefits for individual shipping firms, the report notes, while also slashing processing times from days to seconds and mitigating fraud risks.

Given the low rates of eBL usage in the shipping industry, the report outlines several recommendations aimed at overcoming trade digitalisation barriers and growing market adoption.

For instance, GSBN says there must be better interoperability between digital trade platforms and common technology standards to avoid the proliferation of so-called “digital islands” in global trade.

The report also urges the trade industry to digitise other documents, as stakeholders will be “less inclined to use one digital document if there are several paper documents remaining” in an end-to-end transaction.

“Just as there are numerous stakeholders involved in the shipping value chain, several documents, others than BLs or DOs, can still be paper based, such as certificates of origin, import licenses, customs declaration or letters of credit,” it says.

“Digitalisation efforts should not focus on just one document type, but on all of those required throughout the shipping process.”

As reported by GTR in early 2023, GSBN transmitted the first eBL for bulk cargo on its blockchain-based technology network after bringing in Cosco Shipping Specialized Carriers as a new member.