Standard Chartered announced the successful completion of the first cross-bank Letter of Credit (LC) transaction between Vietnam and Thailand conducted over blockchain, in partnership with Asian Development Bank (ADB), Bank for Investment and Development of Vietnam and Standard Chartered Bank (Thai).
Over the years, I have received several questions from readers relating to a variety of topics on this resource..
Some of them are really valid questions especially if you consider that some of these questions may be from someone importing for the first time or someone exporting for the first time..
It makes you think of the issues that those entering international trade for the first time or shipping their first container would be facing in getting it completed successfully..
The business of shipping, freight and trade could all be a bit overwhelming as there are several processes to be followed and for those who are doing it for the first time, asking questions and finding the right answers is extremely important..
Here are some questions which I received from one of the readers of this resource, possibly, someone who is starting out new or someone experiencing some new problems with their shipments..
A Bill of Lading is one of the most important documents in the shipping cycle and comes in different forms such as Negotiable or Order Bill of Lading, Seaway Bill of Lading or Express Bill of Lading and Straight Bill of Lading with further permutations and combinations such as Port to Port Bill of Lading, Combined Transport Bill of Lading or Multimodal Bill of Lading and Through Bill of Lading ..
As most of you may know by now, a Bill of Lading has 3 basic purposes or roles..
Evidence of Contract of Carriage;
Receipt of Goods; and
Document of Title to the goods
In its role as Evidence of Contract of Carriage, the emphasis is on the term “Evidence” because contrary to popular belief, a Bill of Lading is neither
a contract between the Seller and the Buyer nor
a contract of carriage between the Carrier and Shipper
So if the bill of lading is the evidence of the contract of carriage, then what is the contract of carriage..??
This is the question in the minds of many in the industry and I will try to shed some light on this issue here..
The world of shipping involves several commercial, documentary, operational and financial processes..
While there have been many developments in the industry, a lot of the documentary processes in shipping and freight has stayed much the same for many decades..
Delays in document transmissions which could take anywhere between 5-10 days with the added risk of loss or delay of documents have severe consequences such as demurrage, detention and/or port storage, possible loss or cargo damage due to non-clearance and abandoned cargo..
CarogX Platform, a neutral, public blockchain-based platform is offering to provide a solution which will help to digitalize the trade documentation process using BDT (Blockchain Document Transfer) and reduce document transmission time to 20 seconds..!!
I took the platform for a test drive to see how it works and if it can assist the industry in saving costs and making the process of document transfer simpler, easier, economical and more importantly, secure and safer..
If you are in the business of international trade you would have no doubt heard about a Certificate of Origin.. But not everyone is familiar with what is a certificate of origin, why it is required, who issues it etc.. This article aims to clarify these points..
A Trade agreement is a contractual arrangement between countries concerning their trade relationships and how they conduct trade with each other..
Customs department in the importing country may require a “proof of origin” in order to determine whether or not the cargo that is imported may be subjected to trade measures such as the preferential duty tariff (for stuff that is imported from with the PTA bloc), free trade deals, prohibited goods etc..
Many of you would have come across the term Letter of Credit (L/C)..
If you are a shipping line, you would have heard this term from various customers asking you to expedite the draft bill of lading for checking by the bank or for the release of the bill of lading to be expedited because the shipment is under L/C..
If you a freight forwarder or agent, you may have been put under pressure by the BCO to get all the documents required by the L/C sent to them in time..
If you are a BCO, you may have been told by your bank that the documents submitted do not match the requirements of the L/C and some of the documentation may need to be redone..
So what exactly is a Letter of Credit, what is the need for a letter of credit, who issues it and how does it work..
The pandemic that is COVID-19 is sweeping the world, disrupting global trade patterns like never before.. When one part of the globe is starting to settle down, the other part starts or spikes..
No one has any real idea of how long it will take for the world to get back to normal and its after effects..
Shipping lines, importers, exporters, ports, terminals, Governments, all businesses, insurance companies have all been affected by the pandemic and continue to look for ways to make the business of shipping as easy as possible considering the severe constraints everyone is going through..
This issue is also putting some of the documentary issues and cargo releases under pressure and leaving the industry to face the unknown.. One such issue that is affecting business is the transmission and handling of Original Bills of Lading..
There are a few options that customers can exercise to secure release of cargo without Original Bill of Lading..
Probably not related to COVID-19 but right on time, Ocean Network Express (ONE), the world’s sixth largest container line became the latest shipping line to offer fully electronic bills of lading to their customers..
As we have seen, we are in a unique moment in history as COVID-19 sweeps through the world affecting all countries around the world and in many cases disrupting the flow of physical documentation flow, especially with regards to Original Bills of Lading..
ONE announced recently that they handled their first ever electronic negotiable Bill of Lading (eB/L) using essDOCS’s paperless document solution, CargoDocs..
Last year, I asked a question “Electronic bill of lading – are you and your country ready for it..??”..
This question could not be more relevant TODAY, considering the current circumstances, and the impact COVID-19 on the shipping and freight industry..
An electronic paperless bill of lading is a bill of lading issued electronically instead of being printed on paper and issued physically to the customer as a hard copy..
Whether using an electronic paperless bill of lading issued on the back of a Blockchain based platform or a Bolero based platform, these electronic bill of lading options are said to fulfill the functions in the same manner as a traditional paper bill of lading..
Many believe that the electronic bill of lading will be a game changer in the shipping industry with faster, efficient transactions, reduction in costs with greater security and less risk..
However, there were concerns on the issue of safety, security and acceptability relating to the transmission and receipt of electronic paperless bill of lading and in several cases it was required to check whether the carrier and country were ready for electronic paperless bill of lading..
Currently, we are in a unique moment in history where as per reports, COVID-19 has affected all countries around the world.. And this my friends is a time when almost all shipping lines and customers would be wishing that they had access to Electronic Paperless Bills of Lading..