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.
