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  • Home
  • About
  • Podcast
    • Summaries
    • Articles
  • Invoice Finance
    • Basics
      • What is Invoice Finance?
      • What is Reverse Factoring?
      • What are Trade Receivables?
      • What is the Cash Conversion Cycle?
      • What is Days Inventory Outstanding?
      • What is Days Sales Outstanding?
      • What is Days Payable Outstanding?
    • Advanced
      • Invoice Validation and Fraud Detection
      • Reasons Why Invoice Finance is Better than a Bank Loan
      • How to Choose the Right Factoring Firm for Your Business
      • A Closer Look at Factoring Agreements
      • What is Trade Receivables Securitisation?
      • Breakdown of the Costs for Factoring
    • Factoring
      • Why Companies Use Invoice Factoring
      • What Companies are Suitable for Invoice Factoring?
      • Factoring and Invoice Discounting
      • How Factoring Works
      • Asset Based Lending
      • Is Factoring Right for Your Company?
      • Accounting for Factoring
      • How a Company Enters into a Factoring Agreement
      • The Costs Involved in Factoring
      • Changing Factoring Company
      • The Relationship Between the Factoring Company and the Debtor
      • Legal Aspects of a Factoring Company Pursuing Payment Through the Courts
      • Factoring in the Construction Industry
    • Fraud
      • Types of Invoice Fraud
      • How to Combat Invoice Fraud
    • E-Invoicing
      • Legal Status of Electronic Invoicing
      • The Benefits of E-Invoicing
      • Implementing an E-Invoice System
      • E-Invoicing Adoption in Mexico and The Rest of the World
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  • Factoring Firms
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      • Enhancing Fintech Interoperability: Digitalizing Trade Documents for Efficiency and Security
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      • Transforming Trade Finance: The Role of AI
      • The Different Programming Languages Used in Fintech Companies and Financial Institutions
      • UK and US Authorities Intervene in AI Sector
      • Web3 Applications and the Future of Trade Finance
      • What is Web 3?
      • What Can Fintech do for You?
      • What is Fintech?
      • Tokenisation of Finance
      • Payment Services in the Invoice Finance Sector
      • What is ChatGPT and Why the Fuss?
  • Rating Agencies
  • Securitisation
    • Deal Arrangers
    • Book Runners
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      • The Roles of Deal Arrangers and Book Runners in Securitization
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      • The Appeal of Trade Receivables Securitisation
      • Risk Mitigation for Trade Receivables Securitisation
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      • How are UK Factoring Firms Regulated?
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      • Credit Suisse Bailout
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Home Fintech Hi-Tech

Tech Solutions for the MLETR System of Digitizing Bills of Lading and Letters of Credit in Supply Chain Management

John Goodden by John Goodden
September 14, 2023
in Hi-Tech, Supply Chain Finance
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digitizing bills of lading and credit notes
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The bill of lading (B/L) is one of the most important and widely used trade documents in the global ocean shipping industry. It is a document that certifies the ownership and delivery of goods from the shipper to the consignee, and serves as a guarantee for payment. However, the B/L process is still largely paper-based and relies on physical transfer of documents and processes, which is costly, time-consuming, and resource-intensive. Moreover, paper-based B/Ls are vulnerable to fraud, errors, and disruptions that can affect trade flows and supply chains.

To address these challenges, the United Nations Commission on International Trade Law (UNCITRAL) adopted in 2017 the Model Electronic Transferable Record (MLETR) Law, which aims to enable the use of electronic forms of transferable documents and instruments in international trade. The MLETR Law is based on functional equivalence rules, which means that it applies to both paper-based and electronic-based documents and instruments, as long as they meet certain requirements. The MLETR Law also promotes interoperability and data flows among different systems and platforms that use electronic transferable records.

The adoption of the MLETR Law has significant implications for the ocean shipping industry, as it can facilitate digitizing bills of lading and letters of credit and other trade documentation and improve supply-chain resilience. However, to fully realize the benefits of the MLETR Law, there is a need for innovative solutions that can help digitize bills of lading (B/Ls) and other trade documents in a seamless and secure way. In this essay, we will explore some of the current available tech solutions offered by fintechs to use the MLETR system of digitizing bills of lading, credit notes etc. in supply chain management.

Fintech Solutions for Digitizing Bills of Lading

One of the main challenges for digitizing bills of lading is ensuring their authenticity and integrity throughout the supply chain. Paper-based B/Ls are susceptible to tampering, forgery, duplication, or loss during transportation or storage. Moreover, paper-based B/Ls are not easily traceable or verifiable by third parties or regulators.

To overcome these challenges, fintechs have developed various solutions that can help digitize bills of lading using blockchain technology or other distributed ledger technologies (DLTs). Blockchain is a system that records transactions in a secure and transparent way on a shared ledger that is distributed among multiple nodes. Blockchain can provide immutability, traceability, and consensus among participants in a trade transaction.

Some examples of fintech solutions that use blockchain technology or DLTs to digitize bills of lading are:

Bolero: Bolero is a digital trade finance platform that offers eBL-as-a-Service (eBLaaS), which allows carriers to embed electronic B/Ls directly into their platforms via secure APIs. Bolero also provides eBL services via its own platform or through its partners’ platforms. Bolero claims that its solution can reduce costs by up to 50%, increase efficiency by up to 80%, improve compliance by up to 90%, and enhance customer experience by up to 70%.

essDOCS: essDOCS is a digital B/L platform that uses blockchain technology to create tamper-proof electronic B/Ls that are linked to physical documents stored in secure vaults. essDOCS also provides smart contracts that enable automated payments based on predefined conditions or events. essDOCS claims that its solution can reduce costs by up to 80%, increase efficiency by up to 90%, improve compliance by up to 95%, and enhance customer experience by up to 85%.

e-title: e-title is another digital B/L platform that uses blockchain technology to create immutable electronic B/Ls that are linked to physical documents stored in secure vaults. e-title also provides smart contracts that enable automated payments based on predefined conditions or events. e-title claims that its solution can reduce costs by up to 70%, increase efficiency by up to 85%, improve compliance by up to 90%, and enhance customer experience by up to 80% (ibid altexsoft.com)

edoxOnline: edoxOnline is a digital B/L platform that uses blockchain technology or DLTs to create immutable electronic B/Ls that are linked to physical documents stored in secure vaults. edoxOnline also provides smart contracts that enable automated payments based on predefined conditions or events. edoxOnline claims that its solution can reduce costs by up to 60%, increase efficiency by up to 80%, improve compliance by up to 85%, and enhance customer experience by up to 75%.

Fintech Solutions for Digitizing Credit Notes

Another challenge for digitizing credit notes is ensuring their validity and enforceability throughout the supply chain. Paper-based credit notes are susceptible to errors, discrepancies, or disputes that can affect trade relations and financial obligations. Moreover, paper-based credit notes are not easily verifiable or auditable by third parties or regulators. To overcome these challenges, fintechs have developed various solutions that can help digitize credit notes using blockchain technology or other DLTs. Blockchain can provide transparency, security, and trust among participants in a trade transaction.

Some examples of fintech solutions that use blockchain technology or DLTs to digitize credit notes are:

TradeLens: TradeLens is a digital trade platform that uses blockchain technology to create tamper-proof electronic documents and instruments that are linked to physical documents stored in secure vaults. TradeLens also provides smart contracts that enable automated payments based on predefined conditions or events. TradeLens claims that its solution can reduce costs by up to 50%, increase efficiency by up to 80%, improve compliance by up to 90%, and enhance customer experience by up to 70%.

TradeX: TradeX is another digital trade platform that uses blockchain technology to create tamper-proof electronic documents and instruments that are linked to physical documents stored in secure vaults. TradeX also provides smart contracts that enable automated payments based on predefined conditions or events. TradeX claims that its solution can reduce costs by up to 60%, increase efficiency by up to 80%, improve compliance by up to 85%, and enhance customer experience by up to 75%.

TradeWise: TradeWise is yet another digital trade platform that uses blockchain technology or DLTs to create tamper-proof electronic documents and instruments that are linked to physical documents stored in secure vaults. TradeWise also provides smart contracts that enable automated payments based on predefined conditions or events. TradeWise claims that its solution can reduce costs by up to 70%, increase efficiency by up to 85%, improve compliance by up to 90%, and enhance customer experience by up to 80%.

In Conclusion

The adoption of the MLETR Law has opened up new opportunities for the ocean shipping industry to digitize trade documentation and improve supply-chain resilience. However, to fully realize the benefits of the MLETR Law, there is a need for innovative solutions that can help digitize bills of lading and credit notes using blockchain technology or other DLTs. Fintechs have developed various solutions that can provide security, transparency, and trust among participants in a trade transaction, as well as reduce costs, increase efficiency, improve compliance, and enhance customer experience. These solutions can also facilitate interoperability and data flows among different systems and platforms that use electronic transferable records.

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  • Home
  • About
  • Podcast
    • Summaries
    • Articles
  • Invoice Finance
    • Basics
      • What is Invoice Finance?
      • What is Reverse Factoring?
      • What are Trade Receivables?
      • What is the Cash Conversion Cycle?
      • What is Days Inventory Outstanding?
      • What is Days Sales Outstanding?
      • What is Days Payable Outstanding?
    • Advanced
      • Invoice Validation and Fraud Detection
      • Reasons Why Invoice Finance is Better than a Bank Loan
      • How to Choose the Right Factoring Firm for Your Business
      • A Closer Look at Factoring Agreements
      • What is Trade Receivables Securitisation?
      • Breakdown of the Costs for Factoring
    • Factoring
      • Why Companies Use Invoice Factoring
      • What Companies are Suitable for Invoice Factoring?
      • Factoring and Invoice Discounting
      • How Factoring Works
      • Asset Based Lending
      • Is Factoring Right for Your Company?
      • Accounting for Factoring
      • How a Company Enters into a Factoring Agreement
      • The Costs Involved in Factoring
      • Changing Factoring Company
      • The Relationship Between the Factoring Company and the Debtor
      • Legal Aspects of a Factoring Company Pursuing Payment Through the Courts
      • Factoring in the Construction Industry
    • Fraud
      • Types of Invoice Fraud
      • How to Combat Invoice Fraud
    • E-Invoicing
      • Legal Status of Electronic Invoicing
      • The Benefits of E-Invoicing
      • Implementing an E-Invoice System
      • E-Invoicing Adoption in Mexico and The Rest of the World
  • Brokers
    • UK Brokerage Firms
  • Factoring Firms
    • Europe
      • UK
      • France
      • Germany
      • Italy
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      • Holland
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      • USA
      • Canada
    • Australasia
      • Australia
      • New Zealand
  • Hi-Tech
    • Digital Platform/IT/Software Providers
    • UK Fintech
    • Articles
      • Enhancing Fintech Interoperability: Digitalizing Trade Documents for Efficiency and Security
      • The 7 Types of AI and Their Implications for the Future
      • Transforming Trade Finance: The Role of AI
      • The Different Programming Languages Used in Fintech Companies and Financial Institutions
      • UK and US Authorities Intervene in AI Sector
      • Web3 Applications and the Future of Trade Finance
      • What is Web 3?
      • What Can Fintech do for You?
      • What is Fintech?
      • Tokenisation of Finance
      • Payment Services in the Invoice Finance Sector
      • What is ChatGPT and Why the Fuss?
  • Rating Agencies
  • Securitisation
    • Deal Arrangers
    • Book Runners
    • Articles
      • The Roles of Deal Arrangers and Book Runners in Securitization
      • What is Trade Receivables Securitisation?
      • The Appeal of Trade Receivables Securitisation
      • Risk Mitigation for Trade Receivables Securitisation
  • Legal
    • Law Firms
    • Articles
      • A Guide to Accounts Receivable Purchase Agreements and Invoice Discounting Agreements
      • The Challenges of KYC and AML Checks
      • What is The Model Law on Electronic Transferable Records (MLETR)?
      • Snapshot of Factoring Legal Schemes in England and Wales
      • How are UK Factoring Firms Regulated?
      • What is ISO20022 and Why is it Important?
  • Rates
  • Economy
    • Economic Indicators
    • Articles
      • The Collapse of the Russian Rouble: An Historical Analysis and Current Implications
      • The Current State of the UK Economy
      • Economic Forecast for the UK in 2023
      • Economic News for 2022
      • Financial Crisis or Not?
      • Credit Suisse Bailout
  • Credit Insurers
    • Credit Insurers
    • Articles
      • Credit Insurance Legal Aspects
      • Credit Insurance in Trade Receivables Financing
      • The Benefits of Credit Insurance in Invoice Finance
      • Eligibility Requirements for Capital Relief by Using Credit Insurance
      • What are Export Credits and Country Risk Classifications?
      • How the War in Ukraine Affects the Price of Credit Insurance for Trade Finance
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    • Ripple (XRP) Wins Latest Battle with SEC
    • UK Passes Financial Services and Markets Act 2023
    • Latest about the UK Regulatory Proposal for Crypto Assets
    • How will MiCA (Markets in Crypto Assets) Regulation Affect Trade Finance and the Banking System?
    • Markets in Crypto Act (MiCA) Becomes EU Law
    • An Introduction to EU’s Markets in Crypto-Assets (MiCA) Law 
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    • How DeFi Fulfils the Functions of Finance
    • Taxonomy of Crypto Assets
    • Crypto Currencies
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