Bill of Lading
When a Chinese manufacturer is exporting their goods by sea across the globe, the terms of transportation are agreed upon among three stakeholders: supplier, carrier, and recipient.
Known as a Bill of Lading (BOL), it acts as a receipt of freight services and a document of title. It also serves as evidence of the contract of carriage entered between the carrier and the exporter. A BOL provides the driver and the carrier with all the necessary information to process the freight shipment.
Traditionally, this critical document is mailed from one party to another, creating opportunities for fraud and loss of the document — in addition to raising handling costs.
Problems arise when the paper BOL reaches the consignee at its destination after the cargo has arrived due to long bank procedures or slow postal services. When this happens, the carrier may claim damage costs for the detention of cargo and the cargo owner may be affected given prices of goods could fluctuate.
Blockchain technology could potentially move the needle away from paper BOLs by digitizing the issuance and transfer. For example, IBM has teamed up with Singapore’s largest privately-owned shipping line, Pacific International Lines (PIL) in a blockchain trial to design and create an electronic BOL.
Blockchain allows for a direct exchange of documents, boosting transparency and eliminating disputes, forgeries and unnecessary risks along the supply chain. Instead of waiting for the BOL, a blockchain-enabled system issues the authenticated document immediately, speeding up the entire process.