If your business ships products, you know that a bill of lading is an essential part of the process. In the past, bills of lading were always paper documents. However, today, there is an increasing trend towards electronic bills of lading or eBLs.
Whether you're a small business just starting out in the shipping industry or an established company looking to streamline your operations, an electronic bill of lading can offer a host of benefits.
If you're thinking of making the switch to electronic bills of lading, here's everything you need to know about going digital.
What is a Bill of Lading?
A bill of lading (BOL) is a document that outlines the details of a shipment, including the products being shipped, the shipper, the consignee, and the route. The bill of lading also serves as a receipt for the goods being shipped.
Once the goods arrive at their destination, the bill of lading can be used as proof of delivery. Bills of lading are an important part of international trade, and they help to ensure that shipments are processed smoothly and efficiently.
What is an Electronic Bill of Lading?
An electronic bill of lading, also called a paperless bill of lading, is the digital version of the traditional paper document.
It's used to record the details of a shipment, including the shipper, consignee, and commodity being shipped. An eBL can be created and transmitted electronically, which can save time and money compared to the traditional paper-based process.
How Does an Electronic Bill of Lading Work?
An eBL works just like a traditional paper bill of lading. Once the terms of the contract are agreed upon by both parties, the bill of lading is generated. The shipper then provides this document to the carrier who will transport the shipment.
The main difference with an electronic BOL is that it is generated electronically and can be accessed by all parties involved in the shipment via a secure online portal. This portal can be used to track the shipment throughout its journey from origin to destination.
The Advantages of Using an Electronic Bill of Lading
Faster Creation and Distribution
Perhaps the most significant advantage of using an electronic bill of lading is the speed of creation and distribution. An eBL can be created and transmitted to all parties involved in the shipment within minutes.
This is a vast improvement over the traditional paper-based process, which can often take days or even weeks. The electronic bill of lading's speed advantage can lead to faster shipment turnaround times and consequently improved relationships with all stakeholders.
Enhanced Tracking and Visibility
Electronic bills of lading enable shippers, forwarders, and consignees to have real-time access to critical data throughout the entire transportation process. This real-time visibility can help you keep track of your cargo, identify potential delays, and plan for contingencies.
By providing all stakeholders with access to the same information, eBL can help reduce the risk of misunderstandings and miscommunication. Therefore, an electronic bill of lading has the potential to significantly improve the efficiency of your supply chain.
More Accurate Information
Electronic bills of lading can be automatically populated with data making them more accurate than their paper-based counterparts. This is because an eBL eliminates the need for data to be manually entered, which can often lead to costly errors.
The increased accuracy of electronic bills of lading can help to streamline operations and reduce costs associated with billing mistakes and delays.
Unlike paper documents, electronic records can be easily stored and retrieved without the need to print them out. This reduces the amount of paper used, which in turn helps to conserve trees and other natural resources.
In addition, an electronic bill of lading can help to reduce greenhouse gas emissions by eliminating the need to transport paper documents between different locations. As more businesses adopt electronic bill of lading technology, the potential for more sustainable supply chains becomes a reality.
With electronic bill of lading technology, businesses can take advantage of greater security throughout the shipment process.
For one, they are transmitted electronically, which means that they can't be lost or stolen in transit. Additionally, electronic BOLs are backed up by digital signatures and encryption, making them tamper-proof. As a result, businesses can have greater confidence that their shipments will arrive safely and on time.
Finally, all of the advantages of using electronic bills of lading can lead to cost savings for businesses. By reducing paper use, eliminating mistakes, and expediting their shipping processes, businesses can save money on their bottom line.
The Disadvantages of Using an Electronic Bill of Lading
Despite the many advantages of electronic bills of lading, there are some potential drawbacks to consider as well. One such drawback is the learning curve that may be associated with using this new technology.
While electronic BOLs are generally easy to use, businesses will need to take the time to train their employees on how to generate and manage them. This can lead to some upfront costs and may require a bit of a learning curve for employees.
Potential Security Risks
Another potential drawback of electronic bills of lading is the security risks that come with using any type of electronic technology.
While electronic BOLs are much more secure than their paper-based counterparts, there is always the potential for hackers to gain access to sensitive information. Therefore, businesses will need to be sure that they have adequate security measures in place to protect their electronic BOLs. Better yet, businesses can invest in electronic bill of lading software that includes built-in security features.
Electronic BOLs are not yet universally accepted, which means that there may be some legal obstacles associated with using them.
In 1990, The Comité Maritime International established a set of rules for using it in an attempt to make electronic BOLs more widely accepted. Furthermore, the UN Commission on International Trade Law (UNCITRAL) approved the UNCITRAL Model Law on Electronic Transferable Records (MLETR) in 2017, allowing for their legal use both domestically and internationally.
However, only a handful of countries have enacted legislation that specifically addresses electronic BOLs. This means that businesses may need to take extra steps to ensure that their electronic BOLs are legally binding in the countries where they're shipping goods.
This doesn't mean that electronic bills of lading aren't legally binding. However, businesses should be aware of the potential legal obstacles that may come with using them.
Going Paperless With Cargoflip
Despite the potential drawbacks, electronic bills of lading offer a number of advantages that make them a worthwhile investment for businesses.
With Cargoflip, businesses can easily take advantage of all the benefits of electronic BOLs. Cargoflip is a web-based software that can generate electronic bills of lading to streamline your shipping process.
Create electronic BOLs in minutes without needing any special equipment or software and without changing your processes. Our electronic BOLs are backed by digital signatures and encryption, making them tamper-proof and legally binding.
Schedule a demo today to see how Cargoflip can help your business go paperless.