The Bill of Lading (B/L), which is the key document (besides the contract for purchasing the goods), that currently needs to be issued in paper and transferred physically — securely and safely, usually in more than one copy — can cause numerous problems for the shipper, carrier or purchaser.

One thing is clear — without the original Bill of Lading, the cargo can not be delivered at the destination port, except via a court order (which can take a long time to process).

As the value of the B/L equals the value of the cargo inside a container (on average this is USD 60,000). When the cargo is received, and the B/L is issued by the carrier, this document has to be sent to the owner (shipper) of the cargo. Once payment for the cargo has been received, the owner (shipper) sends this original document to the buyer of the goods (Cnee or Consignee, or in case of L/C a bank) by express courier service (UPS, DHL, Fedex). Upon arrival of the vessel at the destination port the carrier or designated release agent asks the importer (buyer) to present the original Bill of Lading in order to release the shipment to the importer.

There are upsides, but also some downsides of this traditional way of issuing and processing a Bill of Lading.

High cost

Today each Bill of Lading has to be printed out on paper and then sent via express parcel delivery companies such as UPS, Fedex, etc. This is extremely time and money consuming, as the average express courier costs are above USD 100 for each B/L.

Complications when lost

The B/L can be lost, stolen or compromised in some other way. In this case the legal procedures are time consuming, and a significant amount of money is required to reclaim the cargo from the carrier. The importers need to officially declare the B/L lost, and this alone results in weeks of waiting for a new B/L to be issued. This also causes cost of demurrage at the port of destination, late cargo arrival problems, and in some industries, this can cause total factory downtime with multi-million dollar losses and claims.

Low speed

As mentioned before — it can take ages to receive a B/L in a conventional way. The issuer (carrier or NVOC) needs to send it to the shipper (1–2 days), the shipper sends it to a bank of the importer or to the importer (3–5 days), and then the importer sends it to destination carrier office for container release (carrier, forwarder, agent — 1–2 days). In total, each B/L travels with at least 3 courier services and it is in transit for a period of 5–10 days. Just imagine, how many times it can get lost, stolen, or damaged. Reiterate that with the number of cargo loads you are sending.

CargoX: Fast, cheap, safe, secure and reliable

That is why CargoX is up to revolutionize the industry. We are developing the world’s first blockchain Bill of Lading.

The above diagram illustrates the workflow between different parties in the CargoX system.

CargoX will create an open system based on Ethereum and encrypted permanent decentralised data storage which will enable the creation and exchange of Bill of Lading documents.

For more information visit www.cargox.io.

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