eBL: And the FIATA light
eBL: And the FIATA light
eBL: And the FIATA light
The Bill of lading (BL) is the canonical contract of maritime transport, between the exporter and his carrier. A vulgar parchment which conditions, among other things, who should be blamed if the goods are sent to the bottom (and the captain with it). While the CMR benefits from international regulation via the CMR Convention and is slowly rising towards the ethereal skies of the eCMR, the shipping world has not given the BL such a well-defined legal and contractual framework. However, this does not prevent the most determined, FIATA and its partners, from laying the foundations of eBL. An endless story of interoperability, multimodal and digitization (you are here for that, or you wanted to buy chocolate online and got lost).
In the Bill of Lading (BL), it is all about protection of the goods and compensation in case of loss during the transport of goods.
In 1675, in Turkey, silk embarked for London, it is said to be the oldest Bill of Lading known. Three centuries later, the respect of the tradition is almost intact, the shipowner no longer affixes a wax seal but Corine of the import/export department continues to lick the edges of the envelope before handing over to her client this document on which everything rests. With 80% of international trade passing through the oceans, that's a lot of envelopes to seal to respect tradition.
The missions of the BL
The BL's missions, whether they accept it or not, are:
- Confirm that the goods are loaded on board the vessel
- Materialize the carrier/exporter contract
- Whoever has it is legally responsible for the safe delivery of the goods
Is it too much to rely on a piece of paper that can be falsified, duplicated, and fragile? We leave it for you to decide, but what is undeniable is that it remains the foundation of any maritime transport contract.
Despite its importance, digitalizing it has proven to be a challenge. Even with the use of EDI,, we have not been able to eliminate paper, resulting in a sort of rebound effect that is relatively harmless, but damaging to the fluidity of the logistics chain.
To go from "simple" BL EDI to eBL, we talk about fully paperless trade i.e. creation, approval and exchange of documents electronically, and financial transactions. Today, there is no legal eBL object, but market players make multilateral agreements to consider eBL as legal within their alliance by committing not to question its validity. In 1924, the Hague rules laid the foundations of maritime transport and in particular of the BL, no eBL in sight since Alan Turing was 12 years old.
Attempt at agreements
In 1968, the Hague-Visby rules updated the text. The problem was the equivalence between paper and electronic formats. The Hamburg rules are not much clearer on this subject, it is 1978.
The Rotterdam rules finally modernize the legal framework by integrating the multimodal and electronic dimensions, with the exception that they are not in force since they have only been ratified by 5 countries (Benin, Cameroon, Spain, Togo, DRC) since 2009. In 2017, 6 other countries agreed at the UN on the MLETR (Model Law on Electronic Transferable Records), whose effect is therefore inversely proportional to the merits of its intentions to make the electronic way an equivalent of the historical paper formats. This work has been carried out by UNCITRAL: United Nations Commission on International Trade Law with the objective of creating the framework that will put an end to "anti-electronic discrimination". That is, it aims to establish the equivalence between the historical Bill of lading (or Bill of exchange, Promissory note, Warehouse receipt) in its paper format. And they also invented the United Nations Convention on the Use of Electronic Communications in International Contracts which as its name indicates deals with contractualization in a general way (thus broader than the transferable documents included in the MLETR). It is the most successful to date, and even goes so far as to propose an implementation of distributed registries.
Finally, because we need to stop this indigestible historical digression, FIATA, which we will talk about right away, is working on the subject via the FIT (Future International Trade) Alliance with the DCSA (creation of standards in the shipping industry), the ICC (International Chamber of Commerce), the BIMCO (Baltic and International Maritime Council, the largest grouping of shipowners) and SWIFT (Society for Worldwide Interbank Financial Telecommunication, the association that defines the rules to allow us to pay everywhere, all the time)
A watchword is ('cross-border paperless trade' (native English speakers might have a better word for it).
A pack of wolves ready to pounce
It is an international grouping of freight forwarders who are committed to the smooth running of the supply chain(a day keeps the doctor away). It is made up of several entities: Customs Affairs Institute, Air freight Institute, Multimodal Transport Institute, Logistics Institute and Advisory Bodies. FIATA works to produce standardized documents, including the Paper Negotiatable FIATA Multimodal Transport Bill of Lading: the most popular, the "foal". In the absence of international regulations, it enables the use of a BL in maritime transport to be harmonized, as is the case with the CMR in land transport (which benefits from an international agreement via the CMR Convention). FIATA is organized in five regions: Africa & Middle East, Americas, Asia-Pacific, Europe. 22 companies and one association are registered in France alongside the 5800 other companies and 109 associations that make up FIATA.
If you listen carefully at night, you can hear the pack of freight forwarders howling at the moon against the lack of interoperability of the systems and the sometimes hazardous integrity of the data exchanged with their partners (airlines, shipping companies, carriers, port operators, exporters...).
In the same way that the CMR tends to evolve into eCMR, the FBL has come out of its cocoon to become eFBL, endorsed by UN/CEFACT in 2022 since it respects its Multimodal Transport Reference Data Model and has proven itself during a POC on the entire life cycle of the eFBL involving 7 software providers (AKANEA, Bolero, eCustoms, eDox Online, CargoX, Cargowise, TradeWindow) and 19 forwarders. Let's say that an alpha male will have seen in digitalization a way to bring answers to these problems and to keep an alignment between operational processes and business models(the abuse of anglicism is dangerous for health, paragraph to be consumed with moderation) of our time. FIATA has therefore taken up the subject to propose interoperable, secure and... multimodal solutions (you forgot, not us). The implementation of eFBL is underway and UN/CEFACT is not the only one to put its foot down. The International Group of Protection & Indemnity Clubs, the mutual marine insurance club that insures 90% of the goods in circulation has validated 4 of the eBL platforms: Bolero, essDOCS, e-title, and edoxOnline.
The Liverpool & London P&I Club insured the Titanic. It no longer exists. Fun fact
Digital initiatives to be followed closely
Speaking of foals, the eFBL project is actually FIATA's workhorse, as it crystallizes several central issues for freight forwarders. In addition to the concerns mentioned above, FIATA is working to set up an ecosystem of trust, i.e. a common platform between all partners in the logistics chain that acts as intermediaries and guarantors in the exchange of information and documents. This is the purpose of the digital identity envisaged by FIATA: each actor who wishes to do so becomes a member of FIATA and provides his profile (liability insurance, legal identity...), then the platform allows each of them to share information, to choose with whom he shares it and to retrieve information from his partners. At this point, we don't know if the snake is biting its own tail: the eFBL ecosystem is only viable if everyone integrates it, otherwise the information transits through other channels, and for everyone to integrate it, the ecosystem must be viable.
- Do you have your membership card?
- Then you don't go in.
- How do you get a membership card?
- You have to look inside.
Michel Caudiard, Just because you don't have an API doesn't mean you have to shut up.
Waiting for the Brut report on the eBL
In parallel to FIATA's efforts, other actors are working to create an ecosystem that will make eBL a reality and a legal object.
The following descriptions serve to illustrate what four ecosystems look like today and are endorsed by the International Group of P&I Clubs.
The starting point for this paragraph is an article from altexsoft article, supplemented by an exploration of the official sites, which is akin to a fierce struggle in the jungle of acronyms of each ecosystem.
We are talking about platforms that perform two key functions:
- Certification of documents, which guarantees the integrity of the information,
- Guarantee of a legal framework, which makes it possible to identify each third party, their rights and duties.
Centralized closed systems
Bolero (for Bill of Lading Registry Organisation) exists since the end of the 90's, it is a historical actor in the field of the BL and recently of the eBL by conceiving its own concepts in the service of the four benefits of the digitization of this type of documents:
- You don't have to carry the document, so you don't have to pay and wait.
- When my truck is stolen, I limit the damage compared to the situation where the BL is in the truck.
- The electronic signature and encryption work to prevent forgery, manipulation or theft while making it easier for authorized persons to edit the document.
- The eBL becomes a kind of universal tracker to know where the goods are without having to rely on a third party to confirm the information.
The two key functions are based on:
- The Rulebook: The platform that guarantees the application of the BL's general conditions.
- The Title Registry: The title management system with which Bolero tools communicate directly from the creation of the eBL by the carrier to the closing of the contract, at any time of the eBL life, it allows to know and edit the third parties involved, their rights and obligations.
This creates an ecosystem where the documents exchanged have a legal value while being unforgeable and induplicable. The platform is free except for exporters. Use cases - split of BL, switch from an eBL to a BL, delegation of eBL creation to an agent... - are detailed in a FAQ.
Just because a man is thirsty for eBL doesn't mean he has to jump on the first platform. Ravel
The same type of platform is made available by essDOCS (founded in 2005) which is leading a roadmap that will take its partners from "simple" edocs to fully paperless trade: creation, certification, financial transactions and global visibility up to taking care of the documentation from A to Z.
Many products are offered by essDOCS but the two key functions are fulfilled by :
- Assemble Cargo Docs provides the creation and management of the eBLs. Additionally, other documents such as the consignment notes, manifests, or invoices are covered by the dedicated modules
- Exchange Title Docs: Exchange of documents
- Databridge Services & Users Agreement (DSUA): The legal framework
Conventional users use a web browser to interact with the platforms, and an XML API is provided to directly connect customers' internal tools to the platform.
e-title (founded in 2004) takes the opposite approach of the "big platform" methodology by not forcing users to use a single database (or "central registry"). While guaranteeing the security and legality of the documents, this solution works on a peer-to-peer basis in a decentralized and hybrid approach (paper and digital coexist). e-title will generate and register an eBL at the request of the carrier or modify an eBL at the request of a competent authority, ensuring at all times the validity of the title. The communication channels between the different partners are independent of the e-title software core. All formats are supposed to be handled by e-title, from raw scan, PDF or more structured formats.
Key functions are performed by:
- The HSM (Hardware Security Machine) mechanism that registers eBLs and verifies their validity
- The Electronic Title User Agreement which provides a legal framework aligned with the UNCITRAL MLETR.
Web portal & blockchain
edoxOnline, developed by GlobalShare, provides proprietary tools to the entire logistics community (shippers, surveyors, fumigation, ship agents, traders, forwarders, chambers, carriers...) to collaborate in real time on cargo documentation. The starting point is the "Destination point" which initiates the document. The platform then orchestrates the information to be provided by the exporter and the carrier throughout the BL's life cycle, guaranteeing secure and personalized access to information. One of the particularities of edoxOnline is the implementation of a blockchain.
The jsonification of the world is to computer development what the Bescherelle is to conjugation: a necessary evil. Jason Fatra - Defender of Lost Standards.
There are those who have been gagged for less. It's hard to say the word blockchain with impunity in 2022. To conclude and open this article, we will use the words of others to talk about this subject that is much talked about and that seems to infuse even the archaic practices of the BL with the initiative Tradelens carried by Maersk and IBM and with which Bolero collaborates.
A simple and optimistic explanation is given by altexsoft.
There are other more nuanced analyses on the Internet, such as this short post that goes against the grain of the use of blockchain in companies at all costs. The article takes the example of asymmetric cryptography (public/private key system) as an older technology and sometimes more adapted to current uses, but also of technologies that are independent of blockchain and that are developing in parallel to it, such as DID. It is possible that the concerns of the industrialists and the public will join the work of the most geeks, which has been hidden until now.
Why aren't we logging into everywhere with public keys, if the technology is so old? Well, it's not because we didn't have blockchain technology before, but because decentralized identity was not the goal before. One of the most promising and new developments in recent years has been a renewed interest in building decentralized systems of all types. Many people are looking into building a system of decentralized identity and giving that control back to the users.(https://cmdli.dev/blog/blockchain/)
While others are resolutely pessimistic, like Molly White who, along with several other people who are well known in the field, debunks an article from the New York Times. Whether we judge them to be militants, proselytizers, prophets of doom or frustrated crypto enthusiasts, the authors of this analysis are still assiduous chroniclers and scrutinizers of the web3 and its excesses.
It is still difficult to define the contours of interoperability in what is still only a draft of federated networks. Nevertheless, we can see that FIATA is acting as a prescriber, that IGP&I is certifying platforms, that some of them are taking over the work of UNCITRAL and that others are interfacing - as is the case for edoxOnline, which interfaces with Bolero and CargoDocs. Let's hope that the fruits of this emulation are neither an emulsion that will soon fade away nor an accumulation of hollow concepts that would distract us from the real problems. After having detailed the missions of the BL, will we look at the issue of the eBL? Let's bet that it will be for another time...