Electronic Bill of Lading (eBL): Change is coming

A bill of lading is a document issued by a carrier (or their agent) to acknowledge a cargo receipt for shipment. A bill of lading is a document that lists the goods being transported, the destination, the name of the shipper and consignee, and other important information. Although the term is historically related only to carriage by sea, a bill of lading today is used for any carriage of goods. A bill of lading has many essential functions, which make it one of the key documents used in international trade to ensure that exporters receive payment and importers receive the goods. 

 The function of a bill of lading: 

• Evidence of contract of carriage.

• Receipt of goods.

• Document of title to the goods.

• A negotiable document accepted by banking institutions.

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 Who are the parties to a bill of lading, and what are their responsibilities?
 

What are the types of bills of lading? 

Master Bill of Lading:

A document issued by a carrier that represents the contract of carriage for the goods. Once the carrier confirms that it has received the goods, it will issue the MBL to the party that booked the freight, usually the freight forwarder. The Master Bill of Lading (MBL) is issued by the shipping line (carrier) to the freight forwarder.

House bill of lading:

A House Bill of Lading (HBL) is a document that the freight forwarder provides to the shipper to confirm receipt of their goods for transport. Essentially, it serves as a receipt for the items. A Freight Forwarder issues the HBL to their customers.

Port-to-port bill of lading:

It is a type of bill of lading that covers the transportation of goods from the port of loading to the port of discharge. The shipping line (carrier) is responsible for the goods from the time they are loaded onboard the vessel at the loading port until they are unloaded at the discharge port.

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Multimodal bill of lading:
 Multimodal Transport B/L involves multiple modes of transport from the place of receipt to the place of delivery. All these movements are carried out as a single contract by numerous service providers under the carrier's employ. The carrier is responsible for any loss or damage to the entire transport, including the sea and other modes of transport.

Through bill of lading
Through B/L—similar to Multimodal Transport B/L, except that in the case of the through B/L, the carrier is directly responsible only for the sea leg; for the inland movement, they act as an agent in arranging the inland movement. The terms on the through B/L issued by the carrier will expressly state this in such a B/L.

 An electronic bill of lading (B/L) is a digital version of the traditional paper B/L used in international shipping. It's essentially a digital document that serves the same purposes as a paper B/L but with the added benefits of the electronic format.

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1 - Faster Processing: Electronic exchange allows faster processing and reduces delays associated with physical document handling. 

2- Improved Tracking: eB/L can be integrated with tracking systems, providing real-time visibility of shipment status.

3- Reduced Paperwork: This eliminates the need for printing, handling, and physically transporting paper documents, saving time and resources.

4- Enhanced Security: Digital signatures and secure platforms enhance security and reduce the risk of fraud or document loss.

5- Same Legal Validity: An eB/L carries the same legal weight as a paper B/L, recognized by international conventions and trade organizations.

Comparison between traditional B/L and electronic B/L?

Change of ownership:

BL: by sending the original B/L

EB/L: Instant transfer

Time in transit to the second party:

BL: 5-10 days

EB/L: Instant

Can be stolen:

BL: Yes

EB/L:NO

Archiving:

BL: Expensive paper storage/office space

EB/L: Included in service (digital storage)

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Are there any procedures required to start using the electronic bill of lading (EB/L)?

Choosing a certified electronic platform:
For example, Bolero or essDOCS, are platforms that enable the secure transfer of electronic bills of lading (EB/L) between parties.

Providing an appropriate data protection system:
like encryption and digital authentication, to maintain the integrity and security of the documents. 

Coordination among all parties:
including shipping companies, customs, ports, and banks.

Implementing digital certificates:
Digital Certificates of Authenticity (CoA) are documents that verify that the holder of the electronic bill of lading (EB/L) is the rightful owner at a specific point in time. The CoA acts as a verifiable record that the possessor held the EB/L at a specific moment and that certain actions, such as endorsements, amendments, or surrenders, were completed according to the records in the 
platform where the EB/L is moving.

These certificates can be shared with parties that are not on the same platform, such as customs officials, courts, or any third party, to demonstrate possession of the EB/L. Additionally, CoAs may be accessible in an electronic (PDF) or printed format and include digital signatures and QR codes for verification, enhancing the credibility of the ownership claim.

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How does the bank handle the electronic bill of lading in Egypt, and does this differ from banking procedures in Europe?

In Egypt, the use of electronic bills of lading has not been adopted yet. This is because not all parties involved in logistics operations use electronic bills of lading. In other words, the adoption of the electronic bill of lading will occur when all parties involved adopt the use of electronic documents. However, in Egypt, one of the key parties—the bank—does not accept electronic bills of lading.

On the other hand, in Europe, some countries use electronic bills of lading as standard practice, such as Finland, France, Italy, the Netherlands, and Denmark)

The ICC has been instrumental in promoting the adoption of electronic trade documents, including EB/Ls, and has developed guidelines and best practices for their use.

UNCITRAL developed the Model Law on Electronic Transferable Records (MLETR). which provides a legal framework for the recognition and use of electronic bills of lading and other electronic documents.

The DCSA focuses on enhancing digitalization in container shipping. It has established standards for electronic documentation, including EBLs, to facilitate interoperability among shipping lines and improve supply chain efficiency.

The IMO has recognized the importance of digitalization in maritime transport and has been involved in discussions regarding the adoption of electronic documentation.

CEN has worked on standards related to electronic documents and trade, that include frameworks for the implementation of EB/Ls within the EU.

The WTO encourages the digitalization of trade documentation and has conducted studies and discussions on the benefits and implementation of electronic documents in global trade.

Bolero is a leading platform that provides electronic trade services, including issuing and managing electronic bills of lading, enabling secure and efficient document transfer. 

essDOCS offers solutions for electronic trade documents, including EB/Ls, and provides a platform for issuance, transfer, and management.

A blockchain-based platform developed by IBM and Maersk, TradeLens facilitates the sharing of shipping data and documents, including electronic bills of lading, among various stakeholders in the supply chain.

4. Cargo X:  significantly enhances the adoption and benefits of electronic bills of lading through its innovative use of blockchain technology, user-friendly interface, and support for various documents.