Lack of digital processes in shipping complicates decarbonization game

There is a potential for significant carbon reductions through the adoption of digital processes in the shipping sector, a new study published by Global Shipping Business Network (GSBN) finds.

GSBN commissioned Sia Partners, a global consultancy, to conduct the study, “Impact of Digitalization in Driving Decarbonization in Shipping”. It proposes comprehensive models based on live cases to quantify the opportunities that digitalized documentation processes represent for a sector that is a cornerstone of global trade.

These include the adoption of electronic Bills of Lading (eBL) and the use of paperless solutions during the cargo release process.

Today, shipping accounts for nearly 3% of greenhouse gas (GHG) emissions. While shipping remains more carbon-efficient than air transport, there is a pressing need for decarbonization within the industry as international oversight bodies seek to achieve net zero by 2050.

A major hurdle in this direction is the continued reliance on paper documents for legal and regulatory purposes, which adds to the industry’s carbon footprint, according to GSBN.

The study suggests that the absence of a universally adopted digital platform creates interoperability challenges, complicating efforts to reduce carbon emissions.

As carriers pledge to fully adopt eBLs by 2030, the transition of the estimated 15.8 million paper bills issued annually could reduce CO2e emissions by up to 440,820 metric tons. As a point of reference, the annual emissions for the European country of Andorra are 470,000 metric tons.

The potential CO2e reduction per eBL is about 27.9 kg approximately, and about 16.9 kg approximately for an electronic Delivery Order (eDO), the study highlights.

In 2023, over 120,000 eBLs and more than 1 million shipments using GSBN’s Cargo Release solution contributed to an estimated CO2e reduction of up to 20,248 metric tons, the global not-for-profit consortium launched in 2021 to drive shipping’s digitalization said.

“As the shipping industry sails towards a greener horizon, the journey to net zero is not just about cleaner fuels but also about transforming the very fabric of trade through digitisation. Paper-laden processes are not only inefficient and insecure for modern trade but are underpinned by carbon-intensive land and air logistics. This study aims to offer insights and models to support the industry’s transition, especially given the increasing need for companies to communicate and measure their decarbonisation investments,” Alicia Lee, Chief Operating Officer at GSBN, commented.

Stakeholders across the shipping value chain are urged to recognize the environmental and operational benefits of digital solutions, such as waste reduction and streamlined processes, that are crucial to achieving the industry’s decarbonization goals. The study concludes with actionable recommendations for the industry, emphasizing the need for widespread digital adoption, enhanced data integrity and interoperability, as well as the removal of legal barriers to accelerate toward a greener future for global shipping.

“Our study in collaboration with GSBN offers a clear case for digitisation in the evolution of shipping efficiency, security and decarbonisation. By embracing digital trade documentation such as eBLs and processes such as GSBN’s Cargo Release, not only can the industry cut GHG emissions, but also unlock greater speed, and efficiency and offer value to their customers,” Maria Lee, Managing Director at Sia Partners, said.

The latest study is part of GSBN’s ongoing efforts to partner with organizations including DNV, Global Centre for Maritime Decarbonisation (GCMD), Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMCZCS), to pave the way to support the industry’s decarbonization transition.