Blockchain and Bills of Lading: Legal Issues
in Perspective
Huiru Liu
Abstract This chapter examines the basic concept of the new blockchain technology, also known as distributed ledger technology (DLT), as a decentralized system
analogous to a ledger in which transactions are recorded. The focus of the chapter is
on the application of blockchain technology to the traditional bill of lading which
bears the characteristics of being at once evidence of the contract of carriage between
the carrier and shipper, a receipt given by the carrier for taking the goods, and a
document of title facilitated by the bill being a chose in action and a negotiable
instrument. How these characteristics may be retained through the use of blockchain
technology is the essence of the discussion. The chapter concludes with a critique of
the blockchain concept alluding to its efficiency on the one hand and its operational
downsides on the other. It also points to the traditional conservatism of the shipping
industry in terms of its acceptability and proposes an approach that combines
traditional business practices with the positive aspects of blockchain technology to
bills of lading.
1 Introduction
1.1 Background
In earlier times, shipping could be described as a “three in one” operation. The
shipowner, the cargo owner and the master of the ship were usually the same
individual. In other words, the shipowner was also a merchant of goods who
navigated his own ship. In that era, the “three in one” entity kept a record of cargo
in a book that came to be known as the “book of lading”. It must be recognized that
the word “lading” is old English virtually unknown to the common parlance of
modern times, but it continues to be used as a well-established maritime term, the
meaning of which can be gleaned from the word “loading” and the often-used word
H. Liu (*)
World Maritime University, Malmö, Sweden
e-mail: p1507@wmu.se
© Springer Nature Switzerland AG 2020
P. K. Mukherjee et al. (eds.), Maritime Law in Motion, WMU Studies in Maritime
Affairs 8, https://doi.org/10.1007/978-3-030-31749-2_19
413
in Perspective
Huiru Liu
Abstract This chapter examines the basic concept of the new blockchain technology, also known as distributed ledger technology (DLT), as a decentralized system
analogous to a ledger in which transactions are recorded. The focus of the chapter is
on the application of blockchain technology to the traditional bill of lading which
bears the characteristics of being at once evidence of the contract of carriage between
the carrier and shipper, a receipt given by the carrier for taking the goods, and a
document of title facilitated by the bill being a chose in action and a negotiable
instrument. How these characteristics may be retained through the use of blockchain
technology is the essence of the discussion. The chapter concludes with a critique of
the blockchain concept alluding to its efficiency on the one hand and its operational
downsides on the other. It also points to the traditional conservatism of the shipping
industry in terms of its acceptability and proposes an approach that combines
traditional business practices with the positive aspects of blockchain technology to
bills of lading.
1 Introduction
1.1 Background
In earlier times, shipping could be described as a “three in one” operation. The
shipowner, the cargo owner and the master of the ship were usually the same
individual. In other words, the shipowner was also a merchant of goods who
navigated his own ship. In that era, the “three in one” entity kept a record of cargo
in a book that came to be known as the “book of lading”. It must be recognized that
the word “lading” is old English virtually unknown to the common parlance of
modern times, but it continues to be used as a well-established maritime term, the
meaning of which can be gleaned from the word “loading” and the often-used word
H. Liu (*)
World Maritime University, Malmö, Sweden
e-mail: p1507@wmu.se
© Springer Nature Switzerland AG 2020
P. K. Mukherjee et al. (eds.), Maritime Law in Motion, WMU Studies in Maritime
Affairs 8, https://doi.org/10.1007/978-3-030-31749-2_19
413