Electronic Bills Of Lading (eBLs) and Trade Digitilization

The Digital Container Shipping Association (DCSA), have said that (DCSA) said that nine major ocean carriers have committed to issuing half of bills of lading electronically within five years and 100% in ten years. 

Electronic bills of lading are critical documents in international trade, representing ownership of the goods in transit.

They are a foundational document for trade and trade finance. Despite most businesses going digital, eBL accounts for a tiny fraction of issued bills of lading, estimated at around 1.5%.

Hence a shift from 1.5% to 50% will be a significant move and a strong push for blockchain adoption.

A fully digitized bill of lading enables a more seamless customer experience across the supply chain and in turn make trade more efficient, and reduce time and costs for all relevant parties.

The need for digitization in trade is urgent.  Industry needs to speed up the process.

Moving to 100% eBL will contribute towards climate goals, as we move towards net zero 2050.

One of the impediments has been the interoperability of different eBL solutions. The GTIN Token Programme of TradeDigitization.com helps to address this as it build on the familiar and universal barcode system 

How TradeDigitilization. com Works

eBLs are critical documents in trade finance because the organization that has the bill of lading effectively owns the cargo.

Making bills of lading electronic prevents fraud when sending a paper based version via courier. And because it can be transmitted electronically, it’s much faster and cheaper.

With Trade Digitilization, traders can now get greater access to trade financing through more reliable trade documentation that meet the requirements of financial institutions.

The process would start with a sale agreed through a TradeDigitization .com platform, possibly one operated by a partner such as TradeKey.

The difference between how things used to work and how Trade Digitalization could help is as stated below.

TRADITIONAL WAY

Step 1
Exporter received Bill of Lading (BL) from carrier (via courier)

Step 2
Exporter checks the details of BL including entire endorsement chain

Step 3
Exporter inserts BL into document pack and arranges courier pickup

Step 4
Exporter endorses and dispatches the BL to Negotiating Bank (via courier)

WITH TRADE DIGITILIZATION

Step 1
Exporter receives eBL from carrier (via email)

Step 2
Exporter checks for authenticity and provenance including endorsement entry

Step 3
Exporter performs endorsement to Negotiating Bank and sends eBL to Negotiating Bank (via email)

Trade Digitilization provides up to 98% savings in transaction times.

Trade is changing

Trade is pretty much done the same way today as it has been for the last 200 years. Trade Digitization can  help address historical problems and increase efficiency. Things are changing.

If you were a cargo owner in the year 1450, you would have handed over your goods to the ship that will carry them across the world, and are presented with a bill of lading—a piece of paper stating what you’re shipping, where it comes from, and where it’s heading.

Fast forward to this year.  The world has changed dramatically, but the bill of lading remains relatively unchanged. Today, the bill of lading process is still reliant on the physical transfer of paper records and applies to roughly 40 percent of all containerized trade transactions.1

Current trade documentation spans many documents and processes, and is a manual, time-consuming, and resource-intensive process for all stakeholders.

Documentation for a single shipment can require up to 50 sheets of paper that are exchanged with up to 30 different stakeholders.2 The bill of lading, issued by carriers to acknowledge receipt of cargo from the shipper, is one of the most important trade documents required for shipping.

McKinsey analysis indicates that the bill of lading accounts for between 10 and 30 percent of total trade documentation costs. Shipping has not matured far beyond where it was in the 1400s.

Digitalizing trade documentation is an important step that can avoid unnecessary cost, save time, and enable trade. It can also improve supply-chain resilience and help to mitigate inevitable future disruptions.

 

Facilitating Trade Financing with Electronic Bills of Lading

When a container ship loads goods, the ship provides a bill of lading which determines who has legal title to the cargo. This document is used to raise trade finance from banks and other credit firms.

Making bills of lading electronic prevents fraud when sending a paper based version via courier. And because it can be transmitted electronically, it’s much faster and cheaper.

Electronic bills of lading (eBLs) are critical documents in trade finance because the organization that has the bill of lading effectively owns the cargo.

By using the TradeDigitization.com Programme, traders can now get greater access to trade financing through more reliable trade documentation that meet the requirements of financial institutions.

E: contact@tradegateways.com