Mads Wacher Kjærgaard, Digital Lead at BIMCO, explores how do traditional paper bills of lading compare to their electronic counterparts.
Using the example of a shipment from Australia to China, it illustrates the inefficiencies and risks of paper-based systems versus the speed and security offered by electronic bills of lading (eBLs). The paper process involves multiple handovers between banks across continents, often causing costly delays and potential legal complications, especially when documents don’t arrive on time and parties resort to using letters of indemnity (LOIs). These workarounds, while common, carry significant legal and financial risks.
In contrast, the video shows how eBLs streamline the entire process. Digital documents are instantly signed and transferred, allowing for near real-time verification and release of cargo. This not only reduces delays but also eliminates the need for risky LOIs. As global trade becomes more digital, the video makes a strong case for the industry to embrace eBLs as a more efficient, reliable, and modern solution.
Benefits of electronic bills of lading
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Faster document transfer: Unlike paper bills, which must physically travel between multiple banks and parties (often across continents), eBLs are transmitted instantly, significantly reducing waiting times and accelerating cargo release.
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Reduced delays and costs: Paper bills often cause costly port delays, especially if the vessel arrives before the document. eBLs enable immediate cargo discharge upon arrival, avoiding demurrage charges and logistical bottlenecks.
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Improved efficiency and accuracy: eBLs streamline verification processes for banks and trading parties, minimizing manual checks and reducing the chance of errors in documentation.
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Enhanced security: eBLs eliminate the need for risky workarounds like Letters of Indemnity (LOIs), which expose parties to legal and financial liabilities when discharging cargo without the original paper bill.
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Better handling of cargo trades en route: If cargo ownership changes during transit, eBLs can be instantly reassigned, avoiding the cascading delays and added verification layers associated with paper documents.
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Lower risk of misdelivery: Because eBLs are digitally tracked and controlled, they reduce the risk of misdelivery, fraud, or lost documents—a common issue with physical bills.
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Supports global trade modernization: Adopting eBLs aligns shipping practices with the broader digital transformation in global trade, fostering smoother, more transparent transactions across borders.
In an exclusive interview to SAFETY4SEA, Bertrand Chen, CEO of GSBN, discussed he benefits of an electronic Bill of Lading (eBL), saying that to survive and thrive in this new world, the industry needs to share data, process it and act upon it quickly. Given the complexity and interconnectedness of the shipping industry, there will not be a single solution that can fit the bill, but rather a portfolio of solutions built atop of a common data infrastructure.
