BIMCO and global mining companies release paper on bulk trade digitalisation

The four mining companies have formed a working group, the Metals and Mining Digitalisation Forum (MMDF) and, with the support of BIMCO, aimed at engaging all parties involved in the digitalisation of trade, from solution providers to legislators, in an initiative to break down the barriers to a digital future.

The position paper outlines the progress made so far in digitalising the metals and mining trade, highlights the barriers that MMDF members are facing in achieving full end-to-end digitalisation, and describes the significant benefits to the industries, and thereby the global economy, if trade digitalisation is achieved.

The economic benefits of trade digitalisation are unmistakable. According to a report by the International Chamber of Commerce (ICC), an estimated 4 billion trade documents are in circulation. If stacked on each other, the documents would be 520 000 m high and constitute about half a million trees, testifying to the fact that paperless trade reduces the carbon footprint of trade.

“Manual paper-based processes are a source of cost, delay, error, inefficiency and risk. One research report shows that these inefficiencies contribute to a staggering US$507 billion of working capital trapped in S&P 1500 supply chains alone,” said Grant Hunter, Director, Standards, Innovation and Research at BIMCO.

Often, legal uncertainty, interoperability of various platforms and the lack of comprehensive standards are cited by industry stakeholders as barriers and challenges that need to be resolved.

“As a working group, the MMDF aims to bring forth the next wave of digitalisation at speed, drawing on insights and synergies from all stakeholders to advocate for a conducive environment and greater adoption of digital tools,” the mining majors said in a joint statement.

Global events such as the Covid-19 pandemic and the disruption of shipping and supply chains due to lockdowns, lost a number of paper documents and the error clearly highlighted the need for change. Over the past decade, each of the founding members of the MMDF has invested in digital transformation within mining processes, operations and supply chains. At the forefront of trade digitalisation, the founding members have carried out digital-first transactions.

An area of initial focus is the Electronic Bill of Lading (eBL) which has gained traction in the iron ore trade. Based on information provided by MMDF members, and consolidated by BIMCO, MMDF members together account for around 1 billion tpy of iron ore shipped. Between 2021 and 2022, these leading mining companies contributed to an increase in the amount of iron ore carried on eBLs by 80%, equivalent to 100 million t of cargo. eBLs now account for more than 20% of their annual trade volumes for iron ore.

In March 2023, BIMCO launched its '25 by 25 pledge' where shippers commit to target moving 25% of their annual seaborne trade volume for at least one commodity on eBLs by 2025. Anglo American, BHP, Rio Tinto and Vale have all supported the pledge.

Read the article online at: https://www.drybulkmagazine.com/dry-bulk/15122023/bimco-and-mining-companies-release-paper-on-trade-digitalisation/