Debunking some of the myths around electronic bills of lading

Chartering, Insight, IT and Communications, Technology — By on February 12, 2020 at 10:30 PM

Andrew Raymond

Debunking some of the myths around electronic bills of lading

By Andrew Raymond, CEO of Bolero

Surprisingly, there are still many myths surrounding electronic bills of lading (eBLs), despite them being a cornerstone of global trade.

This lack of understanding means businesses are missing out on the efficiency and seamless interconnectivity eBLs can offer. Digitising such a crucial document as the bill of lading has benefits that can completely transform an organisation and help it reach its potential, so why aren’t more businesses getting involved?

Let’s debunk some of the more common myths around eBLs.

    1. eBLs don’t provide any real advantage over traditional methods

Actually, the use of eBLs has a whole range of benefits that some businesses may not even consider. Not only are they smarter and safer, they’re also much faster for everybody involved in a trade transaction. Whether you’re an exporter, a buyer, a bank or a carrier, eBLs can reduce the time to complete transactions  from days down to mere hours – including payments. This has the potential to boost capital and productivity, and every party wins.

    2. eBLs aren’t very secure and are vulnerable to duplication

This is a valid concern, but not one that modern day businesses should be worried about. On a digital platform tampering with an eBL is difficult because authentication and traceability are integral to the technology. Only the registered  holder can request the carrier to amend it, with every action automatically and irrevocably logged.. Documents are encrypted and only the legal holder can make amendments.

      3. They have less legal validity and aren’t equivalent to paper versions

This is a common misconception. eBLs enjoy full legal status and are recognised by English Common Law. They are most commonly recognised in shipping and maritime logistics, and give all parties involved exactly the same protections as their paper equivalent. An eBL  functions as a receipt, evidence of the contract of carriage and document of title, just like its paper counterpart.

      4. All parties have to use the same digital platform

This concerns a lot of businesses but it’s completely unfounded. Using a digital platform doesn’t mean a business can’t easily trade with those on a different platform, or those that haven’t yet subscribed to digital.  If the holder wishes to transfer an eBL to a party which isn’t connected to any eBL-compliant digital platform then he or she can request the carrier to replace the eBL with a traditional paper equivalent.

      5. New technologies like blockchain will provide us with digital documents, including eBLs

While this may be true in theory, and blockchain has the potential to revolutionise the financial sector, it is still very much in its infancy. At best, blockchain is a proof-of-concept and will likely remain so for a good while to come.

However, the benefits of trade document digitisation are with us right now and ready to be taken advantage of. Companies like Bolero will continue to work with blockchain platform-providers to ensure that as technology evolves, international standards are developed that maintain the eBL as valid, widely accepted and legally enforceable the world over.

      6. eBLs need to be sent with all additional documents

This is another misconception. The eBL can be drafted, agreed, approved and passed through banks while certificates and invoices can be sent straight to the buyer. This speeds up the entire trade finance process.

       7. Even with an eBL, you still need the paper original

This is entirely false but the myth persists. The paper original is not required at all when it comes to the use of eBLs – they are valid and legally enforceable on their own.

       8. eBLs are just a proof-of-concept and not widely used

eBLs have actually been in use for the past 17 years, and are fully welcomed and recognised by the International Group of P&I Clubs. Due to intense demand from customers, some of the leading carriers in the world such as CMA-CGM and Evergreen now offer eBLs as a part of their core e-business solutions. Carriers have been using Bolero regularly in countries such as India where digitisation of trade is fast advancing.

       9. Switching eBLs back to paper is not possible, which is hugely inconvenient

Another fallacy. eBLs can be converted back to paper whenever it’s necessary to do so, usually when dealing with somebody who hasn’t yet adopted a digital platform. This is incredibly useful for all businesses, but especially smaller organisations that may need to keep their options open and be more agile when setting out to trade globally.

     10. Isn’t it easy to just print off a bill at the destination and use that as an eBL?

This simply isn’t possible. You can’t print off a copy of the bill of lading and claim it as an eBL. Authentication by the title registry would be needed, supported by the rulebook of a digital trade finance platform. Otherwise, such printed documents would simply be nothing more than a copy of the data with no legal status. It would effectively be a photocopy of a traditional paper bill.

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