Some may argue that there is already an Electronic version of the Bill of Lading and that is the Sea Waybill of Lading..
A Sea Waybill of Lading which is also issued by the shipping line is neither negotiable nor signed and it does not require presentation of any negotiable paper document for delivery at destination and is generally circulated by email..
Also, a Sea Waybill of Lading only fulfils two of the 3 roles of the Bill of Lading 1) Evidence of Contract of Carriage and 2) Receipt of Goods.. It does not fulfil the role of Document of Title which is one of the key roles of a bill of lading when issued as a Negotiable Document..
So the question is whether there is space in the shipping world for a Negotiable Electronic Bill of Lading which is electronically signed by the carrier and maybe printed at the office of the shipper or freight forwarder..
In October 2015 BIMCO introduced some major revisions to the NYPE (New York Produce Exchange) Time Charter Party which includes the issuance of Electronic Bills of Lading covered under below clauses
32. BIMCO Electronic Bills of Lading Clause
(a) At the Charterers’ option, bills of lading, waybills and delivery orders referred to in this Charter Party shall be issued, signed and transmitted in electronic form with the same effect as their paper equivalent.
(b) For the purpose of Sub-clause (a) the Owners shall subscribe to and use Electronic (Paperless) Trading Systems as directed by the Charterers, provided such systems are approved by the International Group of P&I Clubs. Any fees incurred in subscribing to or for using such systems shall be for the Charterers’ account.
(c) The Charterers agree to hold the Owners harmless in respect of any additional liability arising from the use of the systems referred to in Sub-clause (b), to the extent that such liability does not arise from Owners’ negligence.
According to BIMCO,
Bills of lading produced in electronic format are designed to replicate the purposes and processes (such as endorsements or reservations) of their paper equivalent so as to offer “functional equivalence”.
Electronic bills can, if required by parties in the trading chain, be replaced by paper bills of lading at any point.
In practical terms, while electronic bill of lading systems do not entirely eliminate the problem of cargoes arriving at discharge ports before bills of lading, their use should result in a significant reduction in the number, and associated risks, of LOIs voluntarily issued by owners.
Although the above is mainly for dry bulk cargoes covered by Charter Party, encouraged by this, could more shipping lines and customers in the container shipping sector opt for Electronic Bill of Lading..??
Is there a future for electronic bill of lading in the container trade where there are more chances of fraud and forgery..??
Are the shipping lines and customers ready to accept and use electronic bill of lading..??
Read this insightful article about the advantages and disadvantages of Electronic Bill of Lading by Reed Smith lawyers and share your opinion..
Have any of you dealt with Electronic Bill of Lading (negotiable) and how was the experience..??