Shipping can be a complex process; the goods from every nook and corner pass through several hands, and then they reach the final consumer. Did you know shipping is considered the backbone of the world economy? It consists of import, export, intercontinental trade, etc.; without these, the economy would come to a halt.
Over the past years, the shipping sector has seen tremendous advancements in technology. The traditional paper bill of lading has been transformed, and now you have access to smart contracts and electronic bills of lading. The electronic bill or digital bill of lading streamlines the operations and documentation process.
In this article, you will get all the required information on how smart contracts and electronic bills of lading are making the shipping process easier.
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Understanding Smart Contract And Electronic Bill Of Lading
A Bill of lading is a legal document that is issued to a shipper by a carrier. This bill is vital as it is required to ship goods, and it is considered as a receipt and as a bill. The digital version of this bill is the E-Bill of lading! Now, in today’s time, there is a modern way to secure the goods title, via Smart contracts.
Smart contracts are powered by IoT and blockchain technology, and it is impossible to alter the contracts. These contracts also automate the process of transferring and issuing the bills of lading, which reduces delays and errors.
Smart contracts can:
- Automatically issues the electronic bills of lading
- Ensure transparent and secure asset tokenization
- Create a safe and secure network, preventing any change in the contract specifications.
The combination of smart contracts and bills of lading automates the traditional logistics but they also optimizes its efficiency and security. Blockchain smart contracts eliminate the need for third parties to mediate the shipping process, as well as provide automatic verification.
The integration of bill of lading and smart contracts will diminish the occurrence of hold-ups, disagreements, and delays in the payment settlements among the traders.
In today’s time, the integration of these technologies enables businesses to maintain a cohesive supply chain, and it lessens the risk of fraud occurrences and makes the world trading system more agile.
This is not it; there are benefits of implementing smart contracts that make the shipping process smooth.
Benefits Of Electronic Bill Of Lading And Smart Contracts
Understanding the benefits will help you understand how these technological advancements have streamlined the shipping process. Having a reliable platform for managing all your shipping data will ensure that you are getting the benefits. These advantages are:
Paperless Process
Smart contracts and Electronic bills of lading provide traders with a paperless process. Earlier, the supply chain party had to rely on a physical piece of paper, which made it difficult to ensure security. However, when you generate an electronic bill, all the data is entered digitally, and all the information can be instantly transferred.
This eliminates the need for human error and reduces the need to store and share physical documents, etc.
Risk Mitigation
Smart contracts are programmed to carry out transactions when specific conditions are met without involving intermediaries, hence reducing the possibility of human error and violation of the terms and conditions of the contract. Also, there is zero chance of contract manipulation, and traders can easily avoid contract breaches.
Easy Accessibility
Using smart contracts and electronic bills of lading, users can easily access the data and documents instantly. They can access the data via mobile phones, tablets, PCs, etc. To get access, you only need a smart device and an internet connection.
This way, you can access all your documentation anywhere and anytime. Also, you can get a backup of your data and get access anytime you want.
The Accuracy Of Data
The traders and supply chain parties rely on the validity and accuracy of the information present on the bill of lading. In this scenario, when you have to re-enter the data manually, there are chances for errors that can affect the accuracy. However, with an e-bill of lading, you do not have to worry about accuracy, and you can be assured of security, too.
Eliminate The Costs Of Postage
Undoubtedly, when you have a physical bill and you have to post the shipping documents and bills of lading physically, it can be expensive. Although, at first glance, the postage costs might look expensive, when you add up the yearly costs of postage, it can be a lot. Adopting digital transformation will help you save a good amount of money.
Real-time Tracking
When you use the conventional methods of mailing/posting the documents, then it not only costs you money but also leads to a huge loss of time if there are delays and any errors. However, if you use smart contracts, then you can transfer the documents instantly.
This removes the need for any intermediates, and due to blockchain technology, you can also track the shipments. You can also get insights if there are any changes and issues in the supply chain.
During delivery, you can have supervision over the shipments. Also, if the customers decide to cancel the order, then the shipping company can easily cease the shipment of the package and notify the relevant parties. Since there is real-time tracking, the whole process is transparent.
Conclusion
Summing up, the digitalization of smart contracts and bills of lading made a revolutionary step to create a better and more transparent and secure trade and shipping ecosystem on a global scale. Adopting digital documentation and smart contracts helps you create operational simplicity, reduces costs, and makes supply chain management more agile.
The shipment process can become complex, but integration and implementation of smart contracts and electronic bills can transform the shipping sector and ensure a secure and flexible foundation.
