Electronic bills of lading, blockchains and smart contracts

Abstract

Abstract After a lengthy incubation period, electronic bills of lading (eBLs) are at last taking their first tentative steps in the shipping world. Systems currently in operation, however, are closed; only traders, carriers and banks who are members can participate. These closed schemes are not, therefore, true replacements for traditional paper bills of lading (pBLs), which can be used by anyone. Open eBL implementations are very difficult, which is no doubt why practical schemes so far have been closed. While blockchains and smart contracts make no difference to what is possible, they do to what is practicable. In particular, they may render feasible eBL implementations more open than those that have existed until now. They can obviate the need for distrusted central registries, and resolve the digital islands problem which can plague closed schemes. This article considers how an open eBL implementation might work. The schemes suggested here are rendered practicable by the new technology, should the industry choose to go down the eBL route. It may not so choose, at any rate in the short term, but if it does take this route, the article examines the legal obstacles that would need to be overcome. It assumes no change in the existing law, but concludes with a discussion of what lawmakers should consider, were they minded to assist.