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The Maritime Advocate - Electronic Bills of Lading

Maritime Advocate
electronic bill of lading
Alexander Goulandris


essDOCS is featured in the latest edition of the Maritime Advocate, which examines the functional and legal requirements for electronic bills of lading.


The Maritime Advocate - Electronic Bills of Lading

We had cause this last week to look into the current prospects of the electronic bill of lading. The leading proponent of this cause is undoubtedly Alexander Goulandris and essDOCS:

Here is what we passed on about the functions of an eB/L:

An eB/L must clearly replicate the core functions of a paper B/L, namely its functions as a receipt, as evidence of or containing the contract of carriage and, if negotiable, as a document of title. However, a paper B/L is much more than this: it is a document which, through usage and as a matter of custom, is versatile enough to allow traders to buy and sell cargoes internationally and often while in transit (this versatility includes the ability to change the B/L, for example, by changing the destination of the cargo or the volume to be discharged to a particular receiver). To be a true functional equivalent, therefore, an eB/L needs to replicate the existing attributes of a paper B/L in an electronic world, while ensuring that the eB/L is transferred at a faster rate than the cargo to which it relates, thereby eliminating or significantly reducing the current reliance on delivery LOIs.

So what is required to create a genuine eB/L? It must have three core attributes:

(a) Legal Framework: either through the current multipartite agreement route or, in future and subject to their widespread adoption, via the Rules, to ensure that the eB/L replicates the rights and obligations of the parties under a paper B/L. As part of this legal framework, any provider of an eB/L solution must ensure that its system meets all its users' insurance requirements, particularly those of shipowners' P&I insurance.

(b) IT Framework: the IT framework within which the eB/L exists must be secure. It is essential that there is only ever one original eB/L and one party which has control of that eB/L: no-one should be able to interfere with this right of control or with the integrity of the eB/L.

(c) Functional Framework: the eB/L must have the necessary range of functions:

(i) the inherent functionality to allow the progress of an eB/L from issue to production in a manner similar to a paper B/L: this includes the ability to (i) endorse the eB/L to another party, transferring the right to possession of the cargo; (ii) provide a security interest in the cargo; (iii) ask for an amendment of the eB/L; and 

(ii) the novel functionality necessitated by its existence in electronic form: for an eB/L to be fully functional it must also be capable of being converted to paper, if, for example, the eB/L needs to be endorsed to someone who is not prepared to accept it in an electronic form or if it is required by a court.

Since January 2010, essDOCS CargoDocs™ Service has been live in certain trade routes. The closed system approach, which requires all users to sign up to a multiparty agreement, is therefore a current practical reality and can provide the shipping industry with the e-commerce solution. In the year ahead, essDOCS plans to rollout CargoDocs™ globally in crude, refined and chemical trades as well as entering liner and dry bulk shipping.

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