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.
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