The Bill of Lading (B/L) is essential in trade and international logistics.

While most transactions are still done on paper, there is a noticeable movement towards digitization, particularly in Europe.

In this column, we will explain in an easy-to-understand manner the benefits of digitizing bills of lading (B/L) and why it has not yet been realized.

 

In this first installment, we will start by explaining the basics about the Bill of Lading (B/L), which is a term rarely heard of outside the trading and logistics industries.

 

■What is a Bill of Lading (B/L)?

The Bill of Lading (B/L) is an extremely important document in the trading and shipping industry.
It is issued by the shipping company responsible for transporting the cargo and has several functions:

 

・Receipt of shipped cargo

・Proof of contract of carriage

- Certificate that proves the holder is the owner of the relevant cargo

 

In international trade, the bill of lading (B/L) is essential to ensure that exporters receive payment and that importers receive goods.

There are many different types of bills of lading (B/L), depending on shipping arrangements and contractual requirements.

 

■ History of the Bill of Lading (B/L)

The origins of the bill of lading (B/L) date back to the 16th to 18th centuries, during the rise of mercantilism in Europe.
During this period, trade flourished as a major economic activity in each country. As the importance of trade increased, so did the need for a system to guarantee the delivery of goods to ensure fair trading. This led to the creation of "title certificates" to certify the location and transfer of ownership of goods.

This is said to be the forerunner of the modern bill of lading (B/L).

 

■Issues facing bills of lading (B/L)

The bill of lading (B/L) is indispensable for modern trade, but due to its nature, various issues have been pointed out.
For example, bills of lading (B/L) are exchanged across the ocean as original paper documents rather than digital documents, making them vulnerable to damage, loss, and delays, which can lead to inefficiencies in trade and the risk of transaction delays.

Furthermore, if it is stolen rather than simply lost, this could escalate into a much bigger problem.

 

Due to the structure of the Bill of Lading (B/L), the owner of the cargo becomes the person who holds the original.
In other words, if the bill of lading (B/L) falls into the hands of an unintended third party due to loss or theft, the ownership of the cargo will be officially transferred to that third party, resulting in significant damage.

 

All of these issues arise under the assumption that bills of lading (B/L) are exchanged in their original form.
In other words, these issues can be overcome if bills of lading (B/L) can be digitized and transferred safely and securely via data.

The transition to bills of lading (B/L) is a key factor in moving the international trade and logistics industry to the next stage.

 

(Continued in ②)