14 August 2022
Founder and President
The eCMR is an electronic version of a consignment note that provides information on the consigner, place of pick-up and consignee, place of delivery, the goods and all related information about the transport. It is used under the CMR Convention when transporting goods by road.
The United Nations CMR Convention (Convention on the Contract for the International Carriage of Goods by Road) from 1956 was adopted in order to provide a united legal framework for national and international road transport. The Convention defines the CMR consignment note, which signifies proof that a transportation contract exists in accordance with the terms and conditions required under the Convention.
In 2008, it became legally possible to use an electronic version of consignment notes following adoption in Geneva of an additional protocol to the Convention. The eCMR Protocol follows the same principles as the traditional paper method; in order to be considered as a complete transport document a credible electronic signature is required. The major difference between the two notes is that the electronic version connects all stakeholders in the supply chain via a digital platform, usually developed using blockchain technology (see our blog on Blockchain). As the goods move through the supply chain, the eCMR platform updates each stage as well as the delivery status.
The impact of the digital transformation is significant and can be clearly observed by looking at three groups: technologies, human resources and processes.
According to the CMR Protocol, the digital consignment note may be used in addition to the paper documents. Nevertheless, in countries that have not ratified the eProtocol, paper freight documents are still mandatory and cannot be replaced completely by the eCMR. Crossing the border, by road transport, into a non-member country with only an electronic CMR is not an option. Road carriers must also have a paper consignment note ready for inspection by authorities. It is interesting to note that Germany, a strategic country in central Europe, just joined the Additional Protocol at the beginning of 2022.
Each time a driver has a delivery and must pass through a non-ratified country, there has to be a paper version of the CMR in the vehicle, which actually undermines the advantages of digitalization. Traditional CMRs have 3 versions (for contracting, for transportation and for administrative management) which is unsustainable considering environmental protection. After a delivery is completed, the paper waybill is sent to offices where it is inserted into the management system to proceed and close the deal. In addition, the electronic version is recommended for increasing visibility and transparency of the supply chain.
In November 2019, the European Parliament and European Council agreed upon making electronic consignment notes mandatory, thereby signifying that the future digital transfer of documents in Europe between companies, governments and customs administrations is one step ahead. The eCMR Protocol will be mandatory for all EU countries from 2026. To date, only 30 countries worldwide have ratified.
The Importance of the eCMR
Although the new rules will become mandatory soon, it is still worthy to note the advantages of visibility and administrative cost reductions that eCMR brings to the logistics industry.
Digitalization is already a key factor for the development and growth of new market models. Various types of platforms and sharing economy concepts and systems will allow us to enhance resource efficiency. In addition, moving away from paper can improve legal, social and customer-related issues, such as the function and status of internet platforms and positive changes in the labor market.
New European Union (EU) regulations on Electronic Freight Transport Information (eFTI) establish platforms for information sharing between companies and enforcement authorities within the EU. ECMR is not included in this scope but there may be common characteristics with information on the platform. In particular, the data listed in the eCMR and the information needed by the competent authorities to prove compliance with the regulatory information requirements may be the same.
In such a case, eCMR can play a significant role as proof of adherence. However, the platform currently used for electronic waybills can be certified as an eFTI platform, provided that it meets the requirements set out in the Regulation. In this case, we would have a universal platform that can be used in both eCMR and eFTI.
Trucknet already supports the paperless idea and trend of documentation and offers immediate eCMR and POD (proof of delivery). Moreover, we provide continuous status of delivery and an online signature, as well as online emissions calculations. In our e-CMR, we offer information about estimated savings in advance of the planned ride and actual information after the trip is completed, all presented in the e-CMR. Everything is available in an application for the driver and end client; in this environmentally sustainable manner we unite them in a single eco-system.
A global eCMR solution can deliver a modern system by removing paperwork and reducing administrative costs. This technology provides a better understanding of what we have in the truck and which route it should take, including an online signature, thus improving truck utilization and safety and security. We promise greater transparency with control and monitoring of every shipment. The stakeholders involved in each shipment will have more options in the market, thereby improving the efficiency of logistics and contributing to higher economic competitiveness for customers.
“Digitally transformed businesses typically develop an ecosystem that blurs the lines between supply chain, partner, customer, crowd, and employee and both strategy and execution are heavily influenced by this ecosystem.” Isaac Sacolick | Global CIO and Managing Director, Greenwich Associates
The international trade of goods and services is a fundamental component of the global economy. According to the global business data platform “Statista”, over 80% of the world’s commodities are transported by sea passing through many ports on the way. Numerous industries are dependent on cargo shipping, especially those that rely on a supply of raw materials.
Hazardous substances such as oil, gas, and products of the chemical industry are often transported great distances by sea, providing the cheapest means for shipping. Actually, the majority of all cargo is conveyed by sea, and many companies choose this mode of transport in order to increase safety as well as to save costs. In 2020, less than 1% of global cargo theft came from shipping vessels.
Efficient port administration requires rapid and large-scale modernization. Operations are significantly slowed down by ship and truck congestion, due to various causes. A port is a facility comprising areas where ships load and discharge cargo (and passengers). The shipping system is complex, while ports serve as hubs for the distribution of freight by all modes of transportation.
In rare case, such as moving raw materials to a production facility, delivery of goods can be carried out from one port to another, without additional transport modes.
It is clear that ports will eventually be automated. However, it should be noted that processes need to be simplified before successful optimization can occur. Major barriers to automation include professional capabilities and experience (technical positions), data quality, siloed operations and more. Automation does not allow solving problems at individual functions.
Breaking down silos between functions is always a challenge, but it is especially difficult for ports that supply the sea/land interface. One of the basic principles of automation is controlling the process, which requires the use of integrated technology for efficient monitoring of traffic and trade flows in the end-to-end terminal process of ports.
A paper published by the Digital Container Shipping Association (DCSA – an independent organization promoting digitally interconnected container shipping) notes the need for a transition from paper-heavy trade transactions to electronic billing. Use of a digital bill of lading (BL – shipment receipt) could result in potential savings of $4 billion per year if only 50% of the shipping industry would adopt the technology.
An OECD report states that global container handling in ports would rise to four times the current levels by 2030, if ports were smart and automated.
Attempts to create an electronic bill of lading (eBL) began in the late 1990s and now more than 20 years later the issue is back on the agenda. It has been called the “Holy Grail of global trade”, referring to a treasure with miraculous powers; however the many obstacles on the way have prevented implementation of the technology.
- How do we connect the ship with road transport?
The transition to an optimized process of connecting sea freight to road transport will take some time. We would like to offer some suggestions:
Short-term optimization of sea freight transport – Multimodal transport involves the use of more than one type of haulage. The best option today is container shipping, where we can combine sea, rail and land transport. This is the easiest way since container shipping companies provide the vehicles, organize the loading in point A and the unloading in point B, while tracking the process. Today, there are companies developing the use of shared shipping containers, allowing different companies to place their cargo in one container in order to get a full load.
Long-term – The concept of the Fourth Industrial Revolution (4IR or Industry 4.0) relates to the ongoing automation of traditional industrial practices using modern smart technology. True optimization of port administration, Port 4.0, is considered to be part of this future 4IR. A smart digitalized port will include the use of innovative technologies to increase efficiency and improve performance, ensure security and cyber-security as well as reduce harmful emissions.
- Which technologies can help us create smart ports?
Big Data has many uses for logistics in the maritime shipping industry, and one of the most important applications is predicting the estimated time of arrival (ETA) of vessels. Different sources (sensors, texts, audios, videos) of information are needed to track ships and cargo, while big data is used to manage ship sensors and for predictive analysis.
Artificial Intelligence (AI), and more specifically machine learning (ML), can be used to enhance shipping routes by determining the best course at the best speed. For optimization and efficiency of the shipping industry, decision-making automation can forecast and optimize performance by reducing human error and accidents, and in addition increase work safety and security.
Internet of Things (IoT) enables real-time tracking and monitoring of cargo at all levels by Port Authorities. It is used to determine location and to identify in detail what each ship is carrying by using sensors.
Blockchain was addressed in one of our previous blogs. This innovative technology stores transaction data which is impossible to change or delete. It provides an open platform paperwork-free system.
These above-mentioned technologies are powerful tools for the shipping industry and enable actions to be carried out rapidly, such as unloading cargo at the port. Port congestion is reduced, resources are saved and there is less damage to the environment.
New ideas are on the table for ship owners. For example, digital twin models will provide a tool for visualization of ship and subsystems, qualification and analytics of operational data, optimization of ship performance, improved internal and external communication, and safe handling of increased levels of autonomy.
We at Trucknet support the idea of creating an ecosystem, where smart vehicles are combined with virtual processes in the digital world. The concept of integration and connection between all systems and processes only can be achieved with maximum transparency and connectivity. In a world of digitalization and sharing economy, business efficiency will be improved and environmental concerns can be addressed.
“Digitalization is a path, not a journey; Digitalization is not all about technology, it is an intersection of technology, innovation and processes – all equally important”
– Mark O’Neil, Columbia Marlow