Secro, a US-based technology company, has completed an end-to-end electronic bill of lading (eBL) transaction on its platform without the use of a private rulebook agreement between participants.
The transaction saw Nitron Group, a global trader of chemical and agricultural fertilisers, carry out a buy-sell transaction involving six counterparties located across three continents. The trade involved a shipment of liquid fertiliser from North America to Chile, managed through agents at both the load and discharge port. According to Secro, the eBL was drafted online, negotiated in real time, electronically signed and digitally interchanged within hours, with the buyer receiving a signed original eBL less than a minute after the transfer was initiated.
Built on the Nem Symbol open source decentralised blockchain platform, Secro enables the digital creation, electronic signing and exchange of negotiable and non-negotiable ocean bills of lading, and was approved by the International Group of P&I Clubs in November last year.
Because transferable records such as the bill of lading are only valid in paper form in the majority of the world’s jurisdictions, other eBL solution providers active in the market have rulebooks that serve as a mutual agreement to treat the eBL as equivalent to its paper counterpart. However, Secro’s solution relies upon Singapore’s Electronic Transactions Act (ETA), which was amended in 2021 to bring it in line with the UNCITRAL Model Law on Electronic Transferable Records (MLETR), and considers eBLs as functionally equivalent to their paper counterparts.
“Thanks to its legal construct, our e-bill of lading has force of law and legal acceptability everywhere in the world, under a simple software user form and without the need for a cumbersome, private rulebook agreement,” Michele Sancricca, CEO and co-founder of Secro tells GTR. He adds that Secro’s system is designed to natively meet the requirements of the ETA – most importantly that an electronic transferable record is equivalent to a paper version if a reliable method is used to ensure that it is capable of being subject to control and if its integrity and identity can be retained from its creation until it ceases to have effect.
“Our technology essentially checks all the boxes per the requirements of the Singapore law,” he says. “It creates a natively digital token that is the representation on a digital ledger of the bill of lading. Our platform creates Ricardian contracts that contain a human readable part that looks exactly like a PDF on the screen, as well as an encrypted machine-readable part. We use a specific type of blockchain whereby the business logic of the contract is not in the blockchain, which enables us to do things like endorsements, or changes in destination.”
This is not the first eBL transaction to be carried out using Singapore’s ETA rather than contract law. In July last year, eBL solution provider essDocs carried out a transaction involving the sale of nickel matte in containers by BHP to Jinchuan Group, shipped on an Ocean Network Express vessel from Australia to China, which was governed by the recognition of the new Singapore law in its services and users agreement.
However, Secro’s solution is the first to have no rulebook at all, and simply rely upon all parties choosing Singapore as the jurisdiction for dispute resolution.
“The idea that e-bills of lading need to be approved in 200 countries to work is a wrong assumption. With force of law across multiple jurisdictions and no private agreements, Secro creates new opportunities for traders and their customers,” says Sancricca.
Secro expects the imminent passage of the Electronic Trade Documents Bill in the UK, which will bring English law in line with MLETR, to help drive adoption of its solution, which is currently targeted at the bulk shipping sector.
“With the Singapore law and the imminent UK law, you have two very familiar legal frameworks that are widely accepted and recognised by everyone in maritime trade,” says Sancricca.
The development comes as efforts towards attaining 100% worldwide adoption of the eBL gain momentum. In February, nine of the world’s major ocean carriers, representing nearly three-quarters of global containerised trade, made a formal commitment to full usage of the eBL by 2030. This was followed by an initiative from the Baltic and International Maritime Council that will see bulk shippers achieve eBL usage for 25% of their annual seaborne trade volume for at least one commodity by 2025.