The International Group of P&I Clubs (IGP&I) has approved Wave’s electronic bill of lading system for use by its members.
Made up of 13 protection and indemnity (P&I) clubs, the IGP&I as a whole provides marine liability cover for approximately 90% of the world’s ocean-going tonnage. Previously, the IGP&I’s rules specifically excluded liabilities in respect of the carriage of cargo under all electronic systems to the extent that the liabilities under such systems would not have arisen under a traditional paper system.
This changed in February 2010, when the group decided that these liabilities would be covered, but only on systems that it had first approved. It then greenlighted electronic bills of lading (eBLs) administered by essDocs and Bolero. In 2015 it added Singapore-based eTitle to its list, and then in June 2019, edoxOnline was added – at the time the first group-approved system to use blockchain technology.
Wave is now the latest system approved by the group. Its distributed ledger network uses blockchain technology to enable parties to issue, exchange and sign a variety of supply chain encrypted documents with no need for a central server or registry.
“Once a system is approved by IGP&I, if a carrier is exposed to any kind of legal conflict with one of the shippers, they will cover it. This approval of Wave means that they are willing to insure the carrier and the ship agent and anyone else if any problem occurs,” Gadi Ruschin, Wave’s CEO, tells GTR. “This provides the highest level of certification. The IGP&I not only accepts Wave’s system, but they are also willing to pay if something goes wrong.”
Wave, which completed the world’s first live blockchain trade transaction with Barclays in 2016, has now become the second blockchain system that the group will cover, and the first to be fully decentralised.
“This means that we are the first service which allows an actual dematerialisation of the bill of lading,” says Ruschin. “All other blockchain-based solutions are just using it as a secure database. We use the blockchain in a very different way.”
Using an eBL offers several advantages that improve upon the current paper-based system, including significantly faster document transfers, which in turn leads to a shorter payment cycle. Being electronic, it is also far less likely to be susceptible to forgery, fraud, loss or other forms of human error.
Ruschin says that Wave has already onboarded Israeli international cargo shipping company Zim, which represents around 2% of the global shipping supply chain. He adds that a further 40% of the world’s container shipping supply chain is currently being integrated into the system.