Swift announced it is working on proof of concept trials to enable interoperability between different electronic bill of lading (eBL) solutions. Eight out of ten of the approved eBL solutions use blockchain and so far it is working with two of them, CargoX and edoxOnline.
Despite COVID, only about 1.5% of bills of lading are electronic. In February, the Digital Container Shipping Association (DCSA) made a key breakthrough by getting nine major ocean carriers to commit to eBL. Within five years, half of their bills of lading will be electronic, rising to 100% in ten years.
A recent McKinsey study predicted eBL could enable $6.5 billion in direct cost savings and $30 – $40 billion in growth in global trade.
However, there are ten different approved eBL providers. That potentially involves ten different integrations that need to be created and maintained. But more than that, without interoperability, all the participants in a shipment – the shipper, consignee, trade finance bank and carrier – must use the same eBL network.
In February 2022, the BIMCO, DCSA, FIATA, ICC and Swift formed the FIT Alliance to promote shipping standards and eBLs. A FIT Alliance survey earlier this year found just 5% of respondents had fully transitioned to eBL. Almost three quarters had concerns about choosing the right eBL platform and interoperability.
Hence the need for an interoperability solution. As a first step, the DCSA has established eBL standards for data and processing for container shipping. And it has been conducting its own proofs of concept since last year. BIMCO developed standards for bulk and liquid shipping and FIATA for eBLs issued by freight forwarders.
Swift’s eBL POC
Swift says its developed an API that uses the DCSA specification. “Our proposed solution offers a highly secure single window that avoids the need for multiple inefficient connections,” says Terry Hubert, Global Trade Strategist at Swift. “The goal of the proof of concept is to have visibility over exchanging eBLs across trade platforms, with Swift as a connecting network.”
During a follow up to one of the DCSA trials, eBL provider Bolero observed that three things are needed for interoperabilty. “The first is a common structure for the eBL data, the second is verifiable party identities, and the third is the sharing of identification tokens between systems.”
CargoX agrees. “By interacting through a connecting partner that serves as an identity proxy, a new level of interoperability is achieved that facilitates frictionless global trade,” said Peter Kern, VP at CargoX.
SWIFT plans to share the details of the POCs later in the year and also start a second phase involving banks.
Meanwhile, SWIFT has recently been involved in other interoperability trials, including for tokenized digital securities. Another targets central bank digital currency (CBDC), both to enable cross border CBDC payments and integration of CBDCs with conventional payment systems.