Last October, Pacific International Lines (PIL) successfully shipped iron and steel structures from India to the United Arab Emirates. For the first time, the process was entirely paperless.

It was a “significant milestone” for the Singapore-headquartered shipping firm in its digitalisation efforts, says Mr Lionel Chatelet, PIL’s chief commercial officer. 

Typically, a single shipment requires about 50 sheets of paper that are exchanged with up to 30 different stakeholders, he explains.

How did they achieve this? By using electronic bills of lading (EBL). 

A bill of lading is a key document in the shipping supply chain that contains details such as the products, the shipper and consignee’s names, and the route. It is also a receipt for the goods shipped and used as proof of delivery.

Mr Chatelet, 48, says: “The EBL makes document creation, approval, distribution, and tracking much easier than the paper bill of lading.”

Another plus point: The shipment, which would typically take over two weeks to complete, was delivered faster than initially expected, with less effort.

He explains that the EBL saves time as all the documents are digitalised and readily accessible. 

The digitalised system also benefits the ecosystem at large. “It helps to reduce potential fraud and administrative costs, eliminate chances of paper loss, and facilitates faster and easier transfer of documents,” Mr Chatelet adds.

According to global management consulting firm McKinsey & Company, the bill of lading accounts for 10 to 30 per cent of total trade documentation costs. Using an EBL can potentially lead to direct annual cost savings of US$6.5 billion (S$8.8 billion) for all stakeholders.

Digitalisation efforts have become more critical to stabilise supply chains as economies grapple with market challenges, notes UOB’s Business Outlook Study 2023.

Nearly three in five businesses in Singapore say their supply chain has been affected by geopolitical tensions, while 43 per cent say supply costs have risen due to high inflation. 

Released in June, the regional study surveyed over 4,000 business owners and key executives from small and medium-sized enterprises (SMEs) and large enterprises across seven markets – China, Hong Kong, Thailand, Vietnam, Malaysia, Indonesia and Singapore.

Feasible to go digital?

Amid the challenging economic climate today, is this the right time for Singapore companies to prioritise digitalisation?

Mr Shannon Lung, senior vice-president and head of UOB FinLab, sees great opportunity for SMEs if they can scale their operations regionally through digitalisation.

“With Asean’s 660 million population, the business opportunity is huge if SMEs can digitalise their businesses to tackle the perennial challenges of rising operations costs such as manpower, rental and costs of goods sold,” says Mr Lung, 40.

He summarises the benefits of regional expansion:

• Increased revenue: By leveraging access to a larger customer base from the region;
• Economies of scale: Where expansion can potentially lead to cost efficiency in production and operation costs; and
• Diversification: To rely less on a single market, making the business less volatile to factors such as an economic downturn and political changes

Digitalisation also benefits SMEs doing business with large enterprises, says Associate Professor Goh Puay Guan of the National University of Singapore Business School.

Prof Goh, 50, says: “Multinational corporations are going digital to increase the visibility and resilience of their supply chain end-to-end, and they expect their Asian and Asean suppliers to be on board the digitalisation initiative.”

Playing matchmaker

So what’s holding Singapore companies back? UOB’s study reveals that the top challenges to digitalisation are that it is costly to implement (27 per cent), there is a lack of digital skill sets among employees (26 per cent), and concerns over cyber-security issues (25 per cent).

“A simple way to offset the cost of digitalisation is by passing it on to the consumers, but this makes the business less competitive due to higher prices,” says Mr Lung.

As for costs, there is help. SMEs keen to digitalise but lack the funds to do so, can approach UOB FinLab. It helps SMEs identify suitable grants – such as the Productivity Solutions Grant offered by Enterprise Singapore (EnterpriseSG) – to support their digitalisation efforts.

Launched in 2015, UOB FinLab is an innovation accelerator with the goal of helping Asean SMEs scale across the region. It does so by connecting them to industry experts and mentors, and finding the right technology solutions to help them maximise efficiency and grow their business.

“Through our programmes, we will share with participants about the grants available to help them kick-start and support their digitalisation journey,” says Mr Lung.

UOB works closely with government agencies such as the Infocomm Media Development Authority (IMDA) and EnterpriseSG to curate a suite of solutions such as the IMDA Start Digital and UOB BizSmart programmes, to help SMEs digitalise their marketing, finance, and human resources operations. 

He adds: “At UOB FinLab, we are continually innovating and developing new programmes to help SMEs reap the full benefits of digitalisation.

“Through engagement and collaboration with new and existing partners, we are tapping the collective knowledge and resources to build a strong and robust ecosystem to support SMEs in Singapore and across the region.” 

This is the fourth of a 12-part series in partnership with