Electronic Bills of Lading Over the last 30 years, investors and shipping organisations have spent some $250m on trying to come up with a viable, acceptable system for transforming the bill of lading from paper to electronic form. At last, there seems to be some prospect of success, as the conservatism of the shipping industry, and legal and insurance hurdles are being overcome. There seems a reasonable chance that 2011 could see the breakthrough when shippers, carriers, receivers and others turn to the e-bill as a natural progression for this document of title.

London Shipping Law Centre offered a platform for discussion on this key issue at its latest event, hosted by law firm Reed Smith, which is well known to WISTA members for its kind support for our activities.

The ambition of what might be called dematerialising the bill of lading (a contract which originates from the 13th century) has seen some disappointments, but today three solutions are on the market. Bolero, which made the running in 1998, has refreshed itself since failing to gain traction in those early days. It has been restructured financially and is offering a broader suite of products. In Singapore, meanwhile, the privately funded E-Title, closely emulates the paper process and boasts a simple legal framework.

Marina Comninos and Alexander Goulandris, both from famous shipping families, spoke up at the meeting for their business essDOCS, which is backed by two investment funds, and facilitates many shipping documents in addition to bills of lading, on which live transactions began in 2009. It has conducted trials in the oil trading environment, and customers include several large oil companies and tanker groups.

The two executives underlined the speed and reliability of e-bills of lading compared with the traditional paper process. A further advantage is said to be greater security against fraud, which in this area is believed to cost at least $400m a year.

Russell Harling of law firm Holman Fenwick Willan, who advises essDOCS, told the meeting that a decision by the International Group of P&I Clubs to include in normal cover the main liabilities arising from paperless trading, as long as the systems concerned were approved by the Group, marked a notable coming of age for electronic commerce.

WISTA Editor's Note: WISTA-UK earlier provided a platform to discuss these important issues in its February 2010 monthly event " E-Bills of lading and new legislation". You can read the report by visitng our Digest's archives.