Electronic Bills Of Lading: A Welcome Change But Not Without Potential Pitfalls

Electronic bills of lading (eBLS) have been gaining traction in the international markets, and trade commodity financiers are increasingly recognizing eBLs as valid collateral. The need for a secure and paperless way to manage cargo information in today's markets is obvious, and eBLs seem to answer that need. But is there a downside? Below, we take a look at some of the potential challenges surrounding their use.

Recent changes in English law have brought a legislative framework to recognize eBLs as a legal equivalent to traditional physical bills of lading. This is clearly a welcome development, but in this new and untested area of law we examine the potential pitfalls.

In a global trade and commodities finance market worth trillions of dollars, the risk of exposure to fraud is ever-evolving, as demonstrated by several high-profile cases, such as the litigation arising out of the Hin Leong fraud.¹ Trade finance has come under increasing scrutiny as a result.