On 1st February 2021, the Singapore parliament passed the Electronic Transactions (Amendment) Bill, enabling, among others, the creation and use of an electronic bill of lading that is legally equivalent to a paper bill of lading.
The Bill adopts the UNICTRAL Model Law on Electronic Transferable Records (“Model Law”), with certain modifications, according to information provided by UK P&I Club.
As explained, electronic bills of lading are able to overcome certain challenges traditionally posed by the use of paper bills of lading in the following ways:
- Instantaneous transmission of documents and reduction of time spent on verification and rectification.
- More security against forgeries due to digital authentication technologies.
- Lower costs of legal documentation, transportation and trade financing.
- Environmental sustainability.
A research conducted by Digital Container Shipping Association (DCSA) in 2020 found that the total cost of processing paper bills is almost three times that of eBLs. At a global economic growth rate of 2.4% through 2030, as forecasted by the OECD, DCSA estimates that the industry can potentially save more than $4 billion per year if 50% eBL adoption is achieved.
This comes amid a recent rise on the uptake of electronic bills of lading, despite the adoption being initially slow due to lack of understanding and skepticism.
Although Singapore’s adoption of the Model Law is a step in the right direction, it remains to be seen if this will have any impact on current practices, given that parties may be more comfortable with using electronic bills of lading only if more countries adopt the Model Law. That said, the Covid-19 pandemic which has highlighted the practical limitations of paper bills of lading may well be the catalyst to accelerate the adoption of electronic bills of lading,
…the Club noted.