Negotiable Electronic Bills of Lading Based on Both Electronic Signatures of the Carrier and the Holder

Abstract

A bill of lading serves the following functions: (1) a receipt for goods; (2) an evidence of a contract of carriage; and (3) a document of title to the goods. It can represent as security to banks and entitles its holder to sell the goods while in transit. Bills of lading in paper form have been criticized these years for the following reasons: It is time-consuming, costly, and open to fraud. The concept of electronic bills of lading has been welcome by many parties involved in the carriage of goods by sea. The third function of bills of lading, as a document of title, is not easily fulfilled in providing mere electronic documents. In this paper, we devise a simple scheme for negotiable electronic bills of lading. The scheme is based on both electronic signatures of the carrier and the holder of the bill. A transaction of electronic bills of lading must be fulfilled by the electronic signature of the original holder and then electronically singed by the carrier. The carrier also maintains a registry system to track electronic bills of lading issued. This scheme can work with current legal framework of electronic commerce. The delivery process and the liability issue are also addressed.