When the UK Electronic Trade Documents Act comes into force on 20 September 2023, electronic bills of lading will move a step close to being a practical alternative to traditional paper bills of lading.
The Act updates the UK’s legal framework so that digital documentation is effectively on the same legal footing as original paper versions. This matters because English law applies to 80% of international bills of lading.
But are electronic bills of lading (EBOLS) really a practical alternative to original paper bills of lading for UK exporters?
EBOLS aren’t practical yet – but you need to get ready
The short answer is no. EBOLS are not a practical alternative to original paper bills of lading. Yet.
But once secondary legislation puts meat on the bones of the current Act, EBOLS will be on the road to widespread adoption. If the United States follows through on proposals to update its own Uniform Commercial Code (UCC), which seems likely, then other countries will follow. Digital innovation will then gather pace and transform the global goods trade far quicker than precedent would suggest.
Don’t wait til the last minute
Inevitably some businesses won’t be ready when the digital floodgates open. These digital laggards will then be scrambling to catch up with their EBOL-enabled competitors — losing valuable market share in the meantime.
Practical steps to prepare for electronic bills of lading
So in practical terms, what does a UK exporter of secondary raw materials such as waste paper OCC, scrap metals and recyclable plastics need to do to get ready for using electronic bills of lading?
Well, let’s assume you’re still running your back-office off a combination of Excel spreadsheets, bog-standard office software and thousands of disorganised email threads.
Step 1 – Get a single source of truth database
A sensible first step is to digitalise your back office with modern scrap trading software that puts all your data in one place where it can be updated and synchronised with a single click. Basically, start to get everyone reading off the same digital page. If the software can generate electronic documentation using accurate and up-to-date information from your single source of truth, then you’re nearly set up.
Again, it’s highly recommended to avoid software that doesn’t have a single source of truth. Otherwise costly errors will creep into your documentation and your shipments will be exposed to unnecessary risks. Our own research has shown that many traders of waste paper consider claims and penalties caused by contract errors to be an unavoidable cost of doing business. It’s not!
Step 2 – Get an API
An application programming interface (API) is a fairly common technology that allows applications to talk to each other. This will enable your system to exchange real-time data with your shipping line or freight forwarder, correct errors on screen, and connect to the secure blockchain infrastructure that underpins EBOLS.
You need software that is API enabled.
Step 3 – Reach out to EBOL-enabled partners
Shipping line MSC has already partnered with tech innovator WAVE BL to pilot EBOLS. There are others out there already – and there will be many more.
So go ahead and ask them about their plans for electronic bills of lading.
Step 4 – Is your destination country EBOL-friendly?
Singapore has already joined the UK in updating its laws to allow electronic bills of lading. Spain is taking steps, and the U.S. is on the way too.
But take care. Even when a country or a port tells you that it accepts EBOLS, the banks involved might not agree! Paper bills of lading with wet signatures are still required for banks in India, for example. So check with your agent on the ground – and stay updated on the waste management rules and legislation in your destination countries.
When change happens, it happens fast.
