Archives for May 2020

The target of 50% of all bills of lading to be electronic within the next decade has been set by the Digital Container Shipping Association (DCSA) in an announcement made last week.  The international freight transport insurer, TT Club welcomes the commitment by the group of container shipping lines that together operate nearly 70% of the world’s capacity.  The initiative is consistent with the increased trend towards digitisation across the industry to improve efficiency and reduce costs.  However, the current pressures felt through the supply chain as a result of the COVID-19 pandemic have no doubt spurred the action.

In its role as liability insurer and adviser on risk management throughout the container industry, TT Club is active in encouraging digitisation, including the cumbersome bill of lading processes.  Additionally, the mutual has been providing valuable guidance to operators on the unique practical issues that they are experiencing with the physical transfer of bills of lading and other documentation due to lockdowns, government restrictions and other COVID-19 related disruptions. The Club has compiled a dedicated COVID-19 webpage¹ to communicate such advice, including numerous briefings, FAQs and links to further regulatory information.

Peregrine Storrs-Fox, TT Club’s Risk Management Director comments, “As early as the late 1990s TT Club recognised the substantial benefits that would accrue to the entire international unitised supply chain, as well as liner shipping businesses, through the adoption of electronic documentation, taking its part in the foundation of bolero.net². This initiative also understood that the bill of lading is but one component in much broader trade practices, including buyers and sellers and, critically, banks. As a result bolero.net has developed a significant array of trade offerings that wrap around the fundamental characteristics that are fulfilled legally in the traditional bill of lading.”

TT Club is concerned that there continues to be such significant reliance on paper-based processes, whether certification, checks, or the range of contractual documents in international trade.  The opportunity for seismic efficiencies and broader benefits were extensively explored in TT Club’s joint work with McKinsey & Co, ‘Brave new world? – Container transport in 2043’³ which adamantly concluded that the future for the container shipping industry was digital.

Some advances towards true digitisation have been made over the last two decades, including the formation of DCSA itself, with a mission to bring efficiencies through standardised messaging amongst shipping lines. More pertinent to the electronic bill of lading (ebsl) itself, the last few years have seen a proliferation of options being brought to market, mostly embracing to greater or lesser extent the much-vaunted distributed ledger technologies, or Blockchain. It is also clear that TradeLens, the consortium founded by Maersk and IBM, also has ebsl in sight.

Storrs-Fox concludes, “The current pandemic has inevitably advanced the digital cause. It is entirely reasonable for DCSA to grasp this particular nettle, taking full advantage of the lessons learned over the last two decades. Indeed, the plethora of physical documentation and ‘chops’ for every international transport involving sea carriage remain fertile ground for further efficiencies that may yet dwarf those immediately in view.”

¹https://www.ttclub.com/news-events/coronavirus-guidance/

²https://www.bolero.net/

³https://www.ttclub.com/news-events/brave-new-world/

ENDS

About TT Club

TT Club is the established market-leading independent provider of mutual insurance and related risk management services to the international transport and logistics industry. TT Club’s primary objective is to help make the industry safer and more secure. Founded in 1968, the Club has more than 1100 Members, spanning container owners and operators, ports and terminals, and logistics companies, working across maritime, road, rail, and air. TT Club is renowned for its high-quality service, in-depth industry knowledge and enduring Member loyalty. It retains more than 93% of its Members with a third of its entire membership having chosen to insure with the Club for 20 years or more.

www.ttclub.com

While many of the Western consumer economies tentatively explore the easing of social restrictions, the global supply chain environment remains significantly disrupted and operators will continue to face many challenges.  International freight insurer, TT Club seeks to guide them with advice for turbulent times.

London, 14 May, 2020

TT Club draws attention to its dedicated Coronavirus webpage, including both risk briefings and alerts, as well as a set of Frequently Asked Questions (FAQs)*.  The insurer, in line with key elements of its mission to make the industry safer and more secure, is keen to provide commentary on issues that have arisen during the onset of the pandemic.  The diverse governmental responses around the globe have created a variable demand for goods, complex regulatory structures, and significantly changed trade patterns.

Among the expanding range of questions dealt with by TT Club’s FAQ service, cargo abandonment and seafarer welfare at port facilities, a current focus for crew exchanges, are particularly salient.  There is likely to be an increase in the abandonment of low value cargoes in containers, either delayed in transit or for which a market is no longer available, causing additional headaches for forwarders and terminals alike.  Similarly, amongst the issues faced by ports, many face a responsibility for properly protecting all involved in the safe transfer of ships’ crews, many of whom have had protracted periods at sea.

“While the current circumstances facing global supply chains and the operators that serve it are truly challenging, TT is providing carefully considered and pragmatic advice to real issues,” says TT Club’s Risk Management Director, Peregrine Storrs-Fox.  “As a specialist insurer for the international transport and logistics the Club has a unique insight into the nature and extent of risk exposures.  As such, the ability to compile and recommend mitigating measures in the current circumstances is well-founded.  In relation to the FAQs, we would welcome enquiries from the industry on issues that maybe of concern.”

Other topics currently covered by the FAQs include: dealing with customers whose cargo delivery has been delayed and the proper use of force majeure clauses in contracts; protecting key workers in a responsible way; advice on demurrage and detention charges; comments on the need to alter terms of Standard Terms and Conditions (STCs) and bills of lading in order to protect against liabilities; and a responsible approach to any relaxation of safety regulations by government authorities.

“Extraordinary circumstances will often require innovative and exceptional practices.  At this time, while supply chain stakeholders strive to maintain their valuable operations effectively, we seek to provide input that supports sound, safe practices, protecting as far as possible against unexpected liabilities,” concluded Storrs-Fox.

* https://www.ttclub.com/news-events/coronavirus-guidance/

ENDS

About TT Club

TT Club is the established market-leading independent provider of mutual insurance and related risk management services to the international transport and logistics industry. TT Club’s primary objective is to help make the industry safer and more secure. Founded in 1968, the Club has more than 1100 Members, spanning container owners and operators, ports and terminals, and logistics companies, working across maritime, road, rail, and air. TT Club is renowned for its high-quality service, in-depth industry knowledge and enduring Member loyalty. It retains more than 93% of its Members with a third of its entire membership having chosen to insure with the Club for 20 years or more.

www.ttclub.com