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There are three legal functions of a bill of lading; 1. Evidence of Receipt of Cargo 2. Evidence of a Contract of Carriage 3. Documentation of Title to Cargo (only if its an order bill)

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Introduction

International Business Law 081375217 In International commerce, the Bill of Lading is an important document where there will be transportation of goods via sea carriage. The Bill of Lading can be traced back to being used as early as the 14th Century (Bennet, 1914). There is no definition of a Bill of Lading through common law or existing legislation related to Bills of Lading, however Indira (2010, p174) suggests that it can defined by the functions that it assumes. A Bill of Lading is a document issued by a shipper acknowledging that stated goods have been received on board as cargo for transportation to a designated place for delivery to the consignee who is usually known. There are three legal functions of a bill of lading; 1. Evidence of Receipt of Cargo 2. Evidence of a Contract of Carriage 3. Documentation of Title to Cargo (only if it's an order bill) As a receipt, the Bill of Lading is signed by the carrier, approving whether the goods corresponding to the contract description have been received and in good condition. A Bill will be described as 'clean' if the goods have been received on board in apparent good condition and stowed ready for transport. The Bill of Lading acts either as evidence of a contract of carriage or if it has been signed over to a third party then it acts as the contract of carriage. ...read more.

Middle

However, this issue of solving fraud can also be argued as a disadvantage of electronic bills of lading as there are a number of security risks involving the exchange of data electronically and the misuse of computers. This risk is enlarged over the use of open networks such as the Internet and introduces confidentiality issues as information is shared with third parties. Indira (2010, p198) suggests that the implementation of a paperless Bill of Lading scheme would also have to overcome these key areas: 1. Security to prevent and discourage fraud 2. National and International Law to discourage and deal with hacking 3. Partnership working between countries to share data and evidence 4. Acceptance of computer data as a substitute for written documentation There would be large initial costs to change to electronic bills instead of paper, as the technology required to successfully carry this out would be expensive initially. The cost of implementing this would undoubtedly impact on the entire sector. Traders are reluctant to move to a system that has not been trialed and tested, although the paper system is less cost efficient, there is a high degree of trust and certainty in which the traders and not willing to give up. Thus unless everyone is willing to change, the electronic system will not work as there would be a split in the way in which traders carried out their business and thus complicating matters further. ...read more.

Conclusion

However, it is evident that the paper bill system is now dated and has not kept afoot with advances in shipping and technology. This has resulted in problems arising where by goods arrive before the Bill of Lading, increased costs as a result of inefficiencies and the potential for fraud. Electronic Bills of Lading also have distinct advantages including reducing costs, improving security, and making the process more efficient. However, they also present legal issues as it would be necessary for legal systems to adjust to cope with a change in method as well as a huge investment in time and technology throughout the sector to support a change of system. In addition to this, they raise issues about confidentiality, security and long term storage of evidence and documentation. Despite the obvious advantages of moving to an electronic system, there are clear issues that will need to be addressed in order to give the users of the system confidence and to ensure fairness and transparency. Current work being carried out by Bolero as mentioned has run a successful pilot scheme, and with the want for international trade to move forward with the technological times there is large support by key trade partners to drive this forward so that it becomes a fully functional and widely accepted method and will progress the use of electronic Bills of Lading so that there can be a smooth transition from paper to electronic Bills of Lading in the future. ...read more.

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