Joining the electronic age

Given earlier slow progress in developing the process (it is estimated that $250m has been spent by various parties trying to produce solutions), there has been understandable scepticism that this inevitable switch could be carried out practically and reliably. At last it seems that yes, it can, and the ports sector is gradually getting on board.

Terminal operators are testing systems: as electronic bills of lading amount to online versions of the letters of credit underpinning insurance of the trade process, everyone must have confidence in any offering. One of the key positive aspects for ports and their insurers is the potential for operational risk reduction.

A leading provider of such documentation, Electronic Shipping Solutions, has won acceptance for its forms from more than 60 customers in three terminals in the UK and the US. Chemicals group INEOS, which in 2010 went live with ESS CargoDocs at the deepwater Finnart Ocean Terminal on the west coast of Scotland, has just extended the agreement to cover oil product shipments from Grangemouth refinery.

As the dock is tidal, the claimed saving of up to two hours on documentation will allow vessels more easily to keep to restricted sailing times. This is a big selling point in port terms. Delays in turnaround can cost a loading terminal dearly if they make other ships wait for a berth. Faster turnover enables a reduction in the number of jetties operated and enables better planning of jetty maintenance.

According to consultant Forrester Research, importing a single cargo requires an average of 36 original documents and 240 copies from 27 parties, with an information overlap of 30% to 90%. If terminal and refinery people need to attend vessels less frequently, the health and safety risk goes down.

With other commercial systems for electronic transport records in the field (Bolero, launched in 1998, has been restructured financially, and Singapore-based E-Title expects transactions to start this year), this is an area to watch.

A stronger documentary evidence chain is a further plus in cutting risk, alongside time savings now that cargo manifests for US import and export shipments have to be declared in advance, increasingly by electronic means.