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COVID-19: Shipping Ministry seeks govt intervention for recognition of electronic trade documents

Citing bottlenecks caused in handling EXIM cargo on account of the current manual process, it sought the commerce ministry's intervention for issuing advisory to departments, including customs, and the Indian Banks Association for accepting 'electronically generated trade documentation'.

India has 12 major ports -- Deendayal (erstwhile Kandla), Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Kamarajar (earlier Ennore), V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia) that handled nearly 705 million tonnes (MT) cargo in 2019-20.

Service providers face difficulties in discharge of their services due general lockdown restrictions and the requirement of social distancing

Citing challenges faced in handling of EXIM cargo, Shipping Secretary Gopal Krishna in a letter to Commerce Secretary Anup Wadhawan said the inability of service providers such as courier agencies, general lockdown restrictions and the requirement of social distancing are causing severe impediment in issuance, delivery and despatch of physical format based trade documentation, which is directly impacting the release of import containers and cargo.

Current manual process creates a high level of risk with the contagious nature of COVID-19 and causes considerable delays in release of cargo

Stating that the current manual process that requires surrender of original bill of lading (BL) at the shipping lines office, collection of paper invoice and payment by cash and collection of paper delivery order issued by then shipping line add up to 11.5 hours of person-to person contact on an average, Krishna said it not only creates a high level of risk with the contagious nature of COVID-19 but results in considerable delays in release of cargo.

 Considering the present circumstances on account of COVID-19, the Indian Ports Association (IPA) under the aegis of the Ministry of Shipping has taken steps towards digitising some of trade related process through implementation of Port Community System (PCS), the letter said.

 PCS was launched in December 2018 and has managed to digitise the major part in port related activities including e-invoice, epayment and and electronic delivery order (e-DO).

 Bill of lading (BL), a critical component, however is still missing and trade bodies under the umbrella of the Federation of Indian Logistics Association (FILA) have supported the IPA initiative of eBL and identified providers like CargoX, the letter mentions.

 "I would request you to consider issuing suitable guidelines and advisory consistent with international conventions on the subject to Departments as well as to Indian Bank Association for banks in India by accepting 'electronically generated trade documentation'.

Also, the 'stakeholders of the trade industry' such as carriers, exporters and importers can also be issued mandate to adopt and use such platforms for 'electronically generated trade documentation' including Bill of Lading (document of title) across stakeholders and across nations," the shipping secretary said.

Such a measure shall help ease the economic and humanitarian challenges and also encourage continuity of trade

"Such a measure shall help ease the economic and humanitarian challenges and also encourage continuity of trade and also enable trade revival in future. This will also support the Ministry of Shipping and Ministry of Commerce in their efforts to ensure smooth flow of Export Import trade and release of import containers/cargo at various ports in India. Should the stakeholder or financial institutions or Departments require any support or assistance, they can reach out to Ministry of Shipping or the IPA," he added.

The ministry also requested considering CargoX, a public block chain platform that provides the eBL solution and added that other solution providers of eBL like Tradelens, Wave, Bolero etc are explored for maritime EXIM cargo.

The number of vessels handled by ports during 2019-20 was around 20,837, whereas during 2018-19, number of vessels handled was 20,853. The vessel traffic declined slightly by 0.08 per cent in comparison to last year.

 The major ports handle about 60 per cent of the country's total cargo traffic.

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