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The 21st Birthday of the Electronic Bill of Lading: With Age Comes Maturity
© 2003 Carsten Schaal & Lex e-Scripta, INTER-LAWYER.com.  All Rights Reserved.


Chapter 1: Convincing Arguments to Promote the Electronic Bill of Lading

As previously mentioned[1], the most burdensome disadvantages of the paper bill of lading is the causation of delays and the extremely costly undertaking of issuing multiple sets of original paper bills. The first aspect results from a modernization-process of the shipping industry. Advanced and faster vessels ensure an accelerated arrival of the goods at the destination port[2], while the documents are often still being verified by some banks for the purposes of documentary credit.[3] Consequently, this causes the bill of lading to arrive delayed at the port of discharge, i.e. that the consignee cannot receive the goods rightfully. In the end, the carrier cannot release the goods from the vessel and additional, high demurrage fees need to be paid.

The latter aspect concerning high costs is composed of non-calculated fees, such as the named demurrage fees, or extra storage charges for depositories. However, it is also composed of the issuing and administration of paper bills of lading itself. It is said that these procedures constitute as much as 10 to 15 per cent of the total transportation costs[4] or up to 10 per cent of the goods value.[5]

Both of these disadvantages are of economical nature and could be improved by electronic means. An electronic bill of lading can be sent from the carrier to a bank and from there to the consignee within a couple of seconds. All the time that remains is the actual and effective time needed for completing and checking the bill of lading - and that should take no longer than the time a fast and modern vessel sails from the port of loading to the port of discharge. Therefore, all additional fees would be abolished and the price of the goods could be reduced. Also, an electronic mail is by far cheaper than the costs of paper and postage imposed on the contracting parties.

There are more advantages to an electronic bill of lading than the two previously mentioned. For example if the problem of delayed arrival of the documents is solved by the e-bill, much more efficient supply systems could be established. Ordered goods could be delivered just-in-time[6], especially in factories where it is absolutely necessary to manufacture in exact time-schedules, because the storage capacity does not allow commodities to arrive before they are actually needed in the production process.[7]

Besides, the electronic bill of lading provides features that are much more convenient than those in the paper-world. The e-bill can be analysed and verified on the same computer where it virtually arrived, texts can be interpolated[8] without issuing or using a new paper document, and the amended or simply checked message can be send to the next recipient without the necessity to bring it to the post office.

In addition, the storage and record keeping of electronic documents is much easier and requires less space than that of paper documents. IT hard drives, little 1.44 MB diskettes, compact disc (CD) writers, smart-card chips and other storage mediums replace the need for huge files for heavy and bulky paper records.

Therefore, the demand for electronic systems is stronger today and, in fact, nobody can honestly imagine a world without electronic data bases, resources, communication systems and internet access. Accordingly, the trade - especially the international maritime trade which has to cope with extreme long distances - also has to evolve with the technology and future possibilities of electronic commerce.

A last point of particular interest for the scope of this paper is the security aspect of electronic bills of lading. Although the technical bases of e-bills will be elaborated in the next chapter, it can already be stated that the high security level of the electronic bill is one of the major advantages compared to the paper bill of lading. The technical possibilities that are available today to secure an e-bill against fraud and unauthorized alteration are of such perfection to be almost beyond human imagination.

[1] See p. 2, notes 3 and 4 above.

[2] Todd, Paul, Cases and Materials on Bills of Lading, Blackwell Scientific Publications: Oxford 1987 (hereinafter “Todd, Cases and Materials”), p. 334 and 338; Yiannopoulos, Ocean Bills of Lading, note 3 above, p. 17.

[3] Yiannopoulos, Ocean Bills of Lading, note 3 above, p. 17.

[4] ibid., p. 18 note 119.

[5] Reed/Angel, Computer Law, note 1 above, p. 322; Todd, Banker’s Documentary Credits, note 2 above, p. 152 note 219.

[6] Bainbridge, David I., Introduction to Computer Law, 4th edition, Pearson Education Ltd.: Harlow 2000 (hereinafter “Bainbridge, Computer Law”), p. 263; Bond, Robert T.J., “The future of electronic commerce in international trade”, (1) International Trade Law Quarterly 1999 (hereinafter “Bond, Future of electronic commerce”), p. 16; Reed/Angel, Computer Law, note 1 above, p. 322; Todd, Banker’s Documentary Credits, note 2 above, p. 152 note 219.

[7] Most manufacturers, e.g. Volkswagen in Wolfsburg/Germany, rely on a just-in-time delivery system; but also great building sites, e.g. the once known biggest building site in Europe, Potzdamer Platz in Berlin.

[8] Laryea, Bolero – Australian Perspective, note 2 above, p. 7.

© 2003 Carsten Schaal & Lex e-Scripta, INTER-LAWYER.com.  All Rights Reserved.

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