Wednesday, February 18, 2015

Electronic Bills of Lading, Electronic Elements Of Entry , Pratique, and Clearance

By Johnas Presbyter, former Master & Chief Purser

 Updated 2/26/2016

American Admiralty Books Safety & Privacy Policies   EU VISITORS WARNING POSSIBLE COOKIES AHEAD

 Merchant Marine Deck Officers and Staff Officers in the Purser Grades are responsible for maintaining the paper work to effect entry, pratique and clearance between ports. Such paper work usually involves Clearance documents from the last port, manifests, crew lists, stores lists and documents that relate to the actual ownership of items of cargo. The most definitive such ownership document is the Bill of Lading. These days Deck officers preparing for the ship's business and law section of their professional license exam study from reference materials and answer exam questions that reflect a paper process. In fact much of the paper work of entry, clearance, and pratique, as well as cargo ownership, is actually dealt with by on line or other forms of electronic filing, and often these filings are prepared by shore based personnel supporting the ship. Electronic filings in the maritime sector have lagged in comparison to other forms of commerce due to language barriers, non uniformity between port states relative to authentication requirements or even the ability to receive and process electronic filings. 

 In the liner trades with good shipping company and port steamship agency support the entire entry and clearance process may seem routine and smooth to the ship's deck officers who most often today aren't backed up by a staff officer Purser. However we recommend producing paper copies of key documents such as cargo manifests, crew lists, and stores and bills of ladings whenever possible. These come in handy when things go wrong and when an officer shifts to a tramp trade from liner service he or she can never know how much or little of the entry, pratique, and clearance process may be performed electronically in the various ports, especially third world ports. Knowing and being familiar with the paper requirements of the entry , pratique, and clearance processes helps keep a merchant officer prepared for the variety of paper and electronic document demands and alternatives called for in a global shipping system, especially in non liner and non hub port trades.


 Ship's health certification is part of entry , partique and clearance and was the first element of the process to benefit from electronic transmission of information. Radio Free Pratique has been around as long as I have and I've held an officer's license and a staff officer's certificate of registry for 50 years. Basically in Radio Free Pratique, the ship's master certifies to the port's health authorities that his ship has not visited a plague port , that he is in possession of de-insect and de-rat certifications and has no sickness aboard. In addition he must answer by radio any other ship's health questions that the port health authorities may have. If the health authorities agree radio permission is granted to proceed directly to assigned berthing and proceed to hold communications with the shore , vice having to display the request pratique signal flag and await boarding and physical inspection before starting business with the shore. Unfortunately customs duties, and cargo transfer to inland carriers requires more documentation and certification than the relatively simple conversation that is "Radio Free Pratique" . It should be standard practice to have aboard paper cargo manifests, stowage plans, stores lists, and crew lists . Customs and Border control agencies will usually want these. Many of these documents are simple lists and lend themselves to transmission by simple office FAX. Stowage plans contain more graphic elements and are often only readable in full drafting paper size. While not impossible FAX transmission of over sized documents is not always practical. Generally, however health, crew, and cargo documentation lend themselves readily to electronic transmission of one form or another. 

 Bills of Lading on the other hand, have elements of title or ownership of goods and are documents of what lawyers and notaries call "authentic acts".  Transmittal of these types of documents by electronic means is complicated by the need of accepted verification protocols. In the old days of paper documented entry these types of documents were authenticated by dated signature and / or were certified by notary. The rest of this post will deal with the various forms of electronically transmitted Bills of lading. 

Electronic Bills of Lading compared with On-Line Bills of Lading
Electronic Bills of Lading [eBLs] have been around the shipping industry since the late 1990s. However, they are sometimes confused with an aspect of shipping company service which is the delivery of a traditional Bill of Lading using on-line methods (eCommerce/eServices). In the e Commerce service the carrier provides a secure website where the customer can access, download and print bills of lading. The e-commerce process produces something which is not much more than a paper document by employing electronic means. But these kinds of arrangements to produce on-line bills of lading do not really compare with the characteristics and advantages of using a certified (industry accepted) eBL.

 A certified eBL is an amalgam of a universally accepted legal regime, technology and a community of users able and willing to accept that the eBL in use is original, unique, valid and unaltered. Like the e Commerce/ e Services arrangement the Online BL is "delivered" using electronic methods. But here the similarity ends, the eBL is subsequently printed by the customer and retains all the costs, risks and drawbacks associated with the paper document. Couriers may well be used for inland delivery to the cargo receivers. Often in the bulk trades paper documents may be claused and altered in ways which are not intended, letters of indemnity may have to be employed and the general speed of processing is slow. In addition to slower processing speed, and time is money in shipping industry,  the production and transmittal costs associated with processing these kinds of documents in paper form are much higher.

 The eBL system by contrast provides carriers,shippers, consignees, and port authorities in  international trade transactions numerous advantages. There is no paper from the beginning to the end of the process. The Bills of Lading will be signed using digital certificates [as used by banks for electronic funds transfers] which produce an encrypted signature that is unique and as  tamper proof as the computer state of the art can make it. .
The eBL provides a full equivalent to the traditional Bill of Lading and its traditional function as a document of title, receipt for the goods and contract of carriage. The eBL incorporates all the terms and conditions of the traditional Bill of Lading and is treated in the same way by the carriers P&I insurers. The Bolero Bill of Lading was the first document to be accepted by the P&I Clubs as a fully comparable transport document and may be considered as a normal working tool of the shipping industry today. .

 The benefits of the Bolero eBL are reasonably secure and attractive for shipping companies today. The problems associated with using orthodox paper Bills of Lading are eliminated., With the Bolero eBL there are no lost Bills of Lading and no fakes, the use of letters of indemnity is greatly reduced, there is no need to acquire new software or hardware. Other risks are reduced and the customers can be offered a modern speedy alternative to a very old and slow  process.

 The practicing deck officer, purser, or steamship agent needs to know about the eBL today but must also understand the paper documentation requirements that are still described in national shipping laws, and international customs conventions. Away from the hub port served liner services entry, pratique, and clearance are often more paper dominated processes than the norm in liner service along the principal trade routes. More over, the ship's officer preparing for advanced professional license examinations must know the basics of the paper system because this is still the basis of the test sections on ship's business and law. There is a reason why masters and even Chief Mates are so often  exempt from navigation watch standing on larger ships. The record keeping, compliance record keeping, and the constantly reoccurring administrative requirements of the entry, pratique, and clearance routines can often keep two officers extremely busy. An in port delay over a documentation compliance issue can sometimes be as costly to the profits of a voyage as an unintentional grounding. Like every other job on our watery planet these days, the job "ain't over till the paper work is done".



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