“Interest among corporates for electronic presentation of trade documents is clearly on the rise. Bolero, one of two providers of electronic bills of lading, recently asked 148 trade finance bankers whether they had received enquiries from customers about eBLs. Nearly 40% confirmed that they had, representing an all-time high.” reported The Asset in an article on ‘Electronic trade finance reaching tipping point’.

It is well understood that, as The Asset explain that: “In a classic secured trade transaction, including letter of credit (L/C) or documentary collections (D/C) financing, bills of lading are presented by the seller to the confirming bank for payment upon shipment of goods. The document is then passed through the issuer’s bank to the buyer, who will use it to take possession of the goods at the port of discharge. The process, which often also involves related documents, can take a week or more.”

Companies, like BP, are adopting the use of eBLS wherever possible due to the improvements in speed and efficiency, and are trying to convince their many counter-parties of their benefits.

Record usage

EssDocs, one of the two provider of eBLs, has had a 75% increase in the last year. Although the majority of eBLs are on an open account, The Asset report that, “the proportion of electronic bills of lading that are issued under trade finance arrangements is approaching 10%.” 

Much more in The Asset article on future of eBLs - here, recommended.

Cutting fraud with electronic bills of lading

Not only are these benefits of using eBLs, there is also the potential to reduce fraud. The Asset in an article entitled ‘The catalyst is here’ gives examples of how paper based Bills of Lading were used to trade related crime. They conclude that, “However, the complexities of claiming payment based on fraudulent or overblown trade claims increase by several multitudes when electronic platforms are involved. Documents would need to be faked on part of many more parties to a transaction, which would make such an endeavor much less rewarding.”

Much more in The Asset article ‘The catalyst is here’.

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CTMfile take: The future of the electronic Bills of Lading is bright.