BASF South East Asia and its carrier APL Limited (American President Lines) have implemented an electronic bill of lading programme offered by JPMorgan. The electronic delivery of the bill of lading document - which allows a buyer to take title to the goods once they have arrived at port - will speed up the trade finance process.
Under the system, APL sends an electronic copy of the document to JPMorgan once BASF's Asia-bound products have been loaded onto ships from one of three manufacturing sites in Europe. JPMorgan then prints that document, complete with signatures, and presents it to the importer who uses it to clear the goods from the dock.
The bill of lading has been one of the more difficult documents to convert to an electronic form because of its standing in the law. The document is the only proof of ownership of goods once they set sail. In the past, these bills of lading have been hand delivered from one corner of the globe to the other.
Christina Yeo, global product manager for TradeDoc at JPMorgan in Singapore, says exporters are driving the push towards electronic delivery of bills of lading. "This new system reduces the cycle time for the forwarding and presentation of documents," she says. "In the past this process could take up to 20 days but now we can speed it up to three or four days."
This suits parties on both sides of the transaction, says Bruce Alter, vice president of treasury services at JPMorgan. "The exporter gets paid more quickly and the importer gets title to the goods sooner," he says. It also eliminates the risk of errors and reduces the costs related to manual document preparation.
JPMorgan is hoping that three other Asian shippers will implement the electronic system in the next six to 12 months. "These carriers are looking closely at the APL experience and realizing that it improves their chances of attracting business from importers and exporters."