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Introduction:
The Covid-19 outbreak unleashed a set of challenges which like
the rest of the world affected the shipping and logistics industry.
The overhaul necessarily required for ease of the much impacted
business including financial institutions and every such remotely
connected entity to ease certain rigid requisitions in the wake of
social distancing or even as a matter of convenience given the
shortage of staff, office supplies, etc. In the shipping business,
ne such requisition which the authorities don’t seem too keen
to be flexible about, is their demand for a hard-copy of the bill
of lading.
A Bill of Lading (“BL”) is the most
vital document in International Trade. It is a legal document
issued by a carrier (including a shipping line/freight
forwarder/Non-Vessel Operating Common Carrier/ Third-Party
Logistics Companies) covering three important functions:
- Receipt of Goods
- Contract of Carriage
- Document of Title (ownership)
Impact of Covid:
Given the contagious nature of the Covid-19 and the social
distancing norms being followed as a preventive measure, various
manual processes with relation to a BL such as surrender of
original the BL at the shipping line’s office, collection of
paper invoice, payment by cash/cheque/other tangible source of
payment to the shipping line, etc. cannot be complied with by a
customer.
More so, the national lockdown and social distancing has become
a grave impediment as the service providers such as courier
agencies are unable to deliver and dispatch the ‘hard copy’
of the BL. This has directly impacted the release of import
containers and cargo at various ports in India. In order to avoid
delay of release of import containers and cargo at various ports in
India, a step towards digitization of BL is extremely crucial.
Having due regard to the mayhem which has followed these past
few months, the Indian Ports Association (IPA) and the trade bodies
in the Federation of Indian Logistics Association (FILA) have
emphasized the importance of digitalization in light of the current
global pandemic. However, due to a significant resistance from
several stakeholders, digitization in the shipping industry would
take some convincing.
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 fulfil the functions
in the same manner as a traditional paper bill of lading.
Benefits of digitization are plenty. An Electronic Bill of
Lading generated using tamperproof Blockchain Technology, will not
only ensure that the trade moves seamlessly with utmost security
but also free of paper and people to people contact, thus ensuring
compliance of social distancing norms. With or without a global
pandemic, digitization is the way to go in the interest of a
seamless, flexible and an efficient ease of business and trade.
Digitalization of Bill of Lading by the Government:
An initiative towards digitalization of BL was taken by Mr.
Gopal Krishna, the Secretary of the Ministry of Shipping of the
Government of India through a letter addressed to the Secretary of
Ministry of Commerce on 16th April, 2020. The letter not
only enlisted the issues faced due the pandemic but also stated the
need and various benefits of digitalization of the BL and requested
the Ministry of Commerce to frame guidelines for use of electronic
Blockchain Technology base Bill of Lading.
As per reports, the Ministry of Shipping gave a go-ahead to run
trial shipments with BLs submitted on CargoX
Platform. Since then, the CargoX Platform for Blockchain Document
Transfer (BDT) has been successfully tested by Portall Infosystems
and India’s global shipping stakeholders to transfer electronic
bills of lading. CargoX and Portall Infosystems have entered into a
partnership to digitalize the processing of bills of lading and the
transfer of trade documents.
This is indeed a very welcome move and if successful, it shall
revolutionize the shipping industry.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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