The bill of lading (BOL) has been around in one form or another for hundreds of years. But as technology improves, consumers are demanding more information. Many people today want to know not only where products came from but also where the raw materials used to create those products came from. As you know, BOLs and electronic bills of lading (eBOLs) are legal contracts that protect manufacturers, shippers, and everyone else in the supply chain by specifying who is legally responsible for what at which point in the process.
In this post, we’ll explore how a highly advanced BOL could improve accountability and transparency. We’ll discuss why this type of BOL could be well worth the extra effort, and you’ll find out about some of the challenges that could crop up.
Let’s get started!
How can logistics providers and manufacturers provide the accountability and transparency that many consumers are demanding? It could happen through an expanded, high-tech, ultra-sophisticated BOL.
The move to electronic bills of lading (eBOLs) has been going on for the past few years. But we haven’t unlocked their full potential. Let’s see how eBOLs can serve us even better.
Here’s one way a high-tech, transparent BOL could play out.
Let’s say a golf club company has its headquarters in the United States and has manufacturing plants in Asia. At each step in the example below, ask yourself, what would the purchase order (PO) look like? How would the BOL work?
Why bother doing all of this? Let’s explore the benefits.
Consumers have more questions than ever about where products came from and who helped create them. For instance, does that chocolate bar contain cocoa harvested through child labor? Or is that dining room table made of illegally traded rosewood, an endangered hardwood known as “ivory of the forest”?
Logistics experts and the manufacturers they work with want to give customers the legal, ethically sourced products they demand. And a company that ignores sustainability or environmental impacts may suffer at the hands of the media and consumers.
According to a recent global survey, 85 percent of consumers reported focusing more on sustainability in the past five years—and the younger the consumer, the more likely they were to cite sustainability as a pressing issue. Ignoring where a product’s raw materials came from or how it was made means that you risk damaging your company’s reputation.
Using a master BOL (you could call it a super-BOL) would provide incredible transparency and accountability. If a type of wood became endangered, a type of glue turned out to be hazardous to the environment, or a method of labor proved controversial, then the manufacturer or retailer would be able to pinpoint which items were problematic. Consumers and retailers would have detailed information to reassure them that a specific product is ethical and sustainable.
Another area in which transparency and accountability are essential is the health and wellness industry. People want to know what’s in the vaccines and medications they take, where they came from, and who made them. Jason Dearen’s nonfiction book Kill Shot: A Shadow Industry, A Deadly Disease describes the horrific consequences of ineptly manufactured medications being injected into patients’ eyes and spinal cords. A master BOL would give hospitals, doctors, and patients more security.
Don’t forget the small advantages, too. Because this type of BOL would be electronic, using it would allow companies to avoid using excess paper and toner, and they wouldn’t have to spend money on storing, archiving, and then shredding or otherwise destroying paper copies. Those little costs add up, and avoiding them helps keep money in wallets—and paper and ink out of landfills or incinerators.
To make this life cycle a reality, local, regional, and national governments would need to cooperate and standardize their systems. Businesses would need to provide sensitive information about raw materials sourcing—information that might put them at a disadvantage if their competitors found out about it. And the logistics industry would need to train its people on new methods and systems.
Those are big asks! But they are technologically possible now, if consumers and manufacturers demand it and if logistics companies are willing to make changes. And some organizations such as Vector and the Digital Container Shipping Association (DCSA) are already at work on making this a reality.
Logistics consultant Jack Carbone specializes in new supply chain information systems. Here’s what he had to say about the proposed BOL described above.
“When you get into the bill of lading, you’re expanding your contacts to include banking institutions because sometimes stuff is moved under a letter of credit,” Carbone explains. “You’re also expanding the parties that are interested in the bill of lading to customs organizations. And I would say those two things, more than anything else, probably make it more difficult to standardize, although the DCSA is really attempting to move toward that.”
The DCSA is a nonprofit group of container lines that’s dedicated to creating common processes and standards within the shipping industry. Part of this effort involves getting shipping companies to adopt software that communicates effectively, even if different companies choose different types or configurations of software. The goal is interoperability for logistics professionals and the companies that hire them. A high-tech, transparent BOL would help tremendously with interoperability.
In 2021, a majority of the DCSA’s nine members agreed to abide by its track-and-trace standards. This is a significant step toward interoperability. According to Eric Johnson at the Journal of Commerce, the move “marks progress in getting the systems of container lines to play nice with one another, overcoming an ingrained tendency to see proprietary systems as a competitive advantage.”
Here are the DCSA member companies that are already using the group’s track-and-trace standards:
These organizations are heavy hitters in the industry. Therefore, their adoption of standards that improve interoperability means that other, smaller companies are likely to follow suit.
It also means that new, agile, up-and-coming companies are likely to try to outdo these organizations and provide an even friendlier, more seamless experience—including the single pane of glass experience that so many companies have been seeking, in which up-to-date information from different systems is all available on one screen.
Improved interoperability standards would be significantly different from today’s standards and practices. Jack Carbone ties this back to the golf club example proposed above.
As the situation stands now, he explains, “all the components that go into a golf club become irrelevant once the structure of a golf club is built. You’re importing a golf club. You’re not importing all the detailed components that make that golf club.”
Naturally, an undertaking this ambitious is likely to hit some trouble spots.
Carbone mentions that other forms often accompany shipments, such as an international form called an Importer Security Filing (ISF). He references the golf club example again: “OK, so the third-party carrier picks up the load in China and brings it to the port for export. So the shipper has a booking, and the trucker can pick up the load of the container full of golf clubs and bring it to the port.”
He continues, “But they really can’t bring it to the port until they have that ISF filing 24 hours before the ship. The ocean carrier can’t move it unless they have an ISF filing at least 24 hours before the ship departs.”
Carbone mentions other issues. For instance, railroads and ports use codes that are different lengths. And many ports are vast, so it would be much more useful to have subcodes that designate specific areas within a port.
The technology is most likely already available to expand and extend the BOL life cycle. But coordinating cooperation between local, national, and international governments would be a challenge. So would convincing manufacturers, shippers, and other businesses to invest in the training and software that an expanded, extended BOL life cycle would require. Still, a more robust BOL will likely emerge in the future if consumers and businesses demand it. The fashion industry is already exploring methods to make its products more traceable, and other industries will likely do the same.
This post was written by Kirsti MacPherson. Kirsti writes and edits material for content marketers, educational publishers, nonprofits, and corporate trainers.
Digital workflows across the supply chain.
