Covid crisis accelerates digital documentation in international logistics space

As the Covid-19 crisis intensified across the globe, a lot of export cargo that had sailed from India to other destinations stared at the possibility of getting stranded because consignment-related original documents — which are typically sent through international couriers — were unable to reach their destination ports on time.

This prompted some shipping lines like AP Moller Maersk to make alternative arrangements for its customers, by opting for electronic sharing of such documents. Maersk has seen wider adoption of its electronic payment solutions after Covid-19 lockdowns disrupted services.

“After a ship sails from an Indian port, a bunch of important documents — which are required in original form — have to be processed and sent to the destination country by flight. These documents, deposited with the banks in India, had to be flown to foreign banks. But they could not be couriered due to the lockdown as courier service is not part of essential services,” said TS Ahluwalia, President, North India Shipper’s Association (NISA).

These documents usually take a few days to be readied. So, they are flown through one of the international courier firms to the destination. Sent by air, the documents reach the destination port much before the sailing cargo reaches destination.

Services halted

The documents include the Bill of Lading (Negotiable), phyto-sanitary certificate, Legalised Invoices, Bill of Exchange, Preferential Certificate of Origin among others, as desired by contract or Letter of Credit, Ahluwalia told BusinessLine .

This is why they cannot be e-mailed. Banks struggled to courier the documents internationally as major freighter services had to be stopped due to Covid-19. These documents are important for Indian exporters as they receive payments only after the buyer gets these documents in original. The exporter usually pays about 10-30 per cent in advance and remaining amount is released after these documents and cargo reach the destination, said Ahluwalia.

If the documents don’t reach the destination by the time the export cargo does, cargo may get stuck at ports, attracting extra charges like detention and demurrage charges. And if the buyer backs out, the Indian exporter could potentially be looking at the challenge of finding another buyer in these disruptive circumstances.

From the West coast, cargo to Europe can reach in about 18 days, while cargo to Bangladesh can reach in about eight days and it takes about five days to reach Dubai.

Early adoption of practice

DHL Express, the courier major which was picking up and shipping documents among other products and had to discontinue its service, resumed its services after a lag in scaled down version.  "DHL Express started pick-up and delivery for documents for the designated essential goods customers in select cities since April 1. Over the past few days, we have been able to help clear up the back log and will continue to support smooth operation of this vital sector," RS Subramanian, Senior Vice President and Managing Director, DHL Express, told BusinessLine.

Maersk has started online document sharing services as the Covid-19 situation began to unfold, so it was prepared to mitigate all the risks arising of the developments and keep the supply chains running. “There are several stakeholders involved in the entire process and not everyone is on the same page with digital documents’ acceptance; however, we have been ahead of the curve and implemented it at the right time to solve our customers’ problems,” said Maersk.

Maersk added that while it had electronic payments from before (the crisis), the acceptance to those solutions was lower. Now, almost every customer has adapted e-payment solutions, stated Maersk.

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