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The Multi Billion Dollar Paper and Excel Jam: digitising trade documentation and shipment release

Overview of the industry 🔭

Imagine you’re a cargo owner in the year 1750 shipping exotic spices from India. You hand over your exotic spices to the ship owner (carrier) that will carry them across the world to europe. In return of receiving your spices you are are presented with a bill of lading by the company who is shipping it

WTF is a bill of lading ? It is a glorified piece of paper stating

- What goods you are shipping and how to handled them ?

- Who is shipping these good ? (shipper)

- Where is it coming from (where did the carrier receive it, from where the carrier is shipping it)

- Where is it heading (where will carrier de load it from the shipment and where they will deliver it

- Who is it being shipped to ? (consignee)

Why is a bill of lading so important?

- It defines the title of goods i.e one who has the original copy of the BL at the moment owns the cargo

- It controls the payment settlement between shipper and consignee, as it serves as the proof that shipper has shipped the cargo

- It serves as the pre-requisite document for customs process in both origin and the destination country. Just like your passport is a pre-requisite document for getting a visa

Fast forward to the year 2023: The world has changed dramatically, but the bill of lading remains relatively unchanged. Today, the bill of lading process is still reliant on the physical transfer of paper records and applies to roughly 40 percent of all containerised (shipping happening via shipping containers via sea / oceans) trade transactions.

Definition:

Shipper: The business entity who owns and is going to be ship the cargo

Consignee: The business entity who is buying the the cargo from the shipper and is going the receive this cargo

Freight Forwarder ( aka FF): Gone are the days when shipper was directly going to the ship owner / carrier. Once the world was hit with globalisation, global trade and shipping increased so much that ship owner’s didnt have the bandwidth to interact with shipper’s directly, hence a new set of companies emerged Freight Forwaders who worked in same fashion as travel agent’s. Just like travel agent’s they consolidated demand for booking (just that this booking is for cargo movement :D). Freight Forwarder’s also started acting as the intermediary between carriers and shippers, hence they became integral part of the bill of lading issuing process.

Docs Team: A sales team at FF is responsible for managing the customer (shipper/sub-agent) and providing them with best possible options and rates.

Credit Control / Accounts receivable Team: The pricing team at FF are the folks who maintain and procure rates to move cargo from point a to b from various mode of transports. They manage relationships with multiple network partners in other countries, shipping lines, airlines, truckers and other value add service providers.

Accounts Payable Team: Responsible for the execution of the shipment. They track the movement of cargo, handle any possible exceptions and prevent delays while giving continuous updates to the customer.

Carrier: The entity responsible for transporting the cargo across countries. Shipping Line or Airline.

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Problem Statement 🔬

Freight Forwarder

Docs, Accounts Payable and Credit Control Team pain points

Spanning across multiple shipper and 100+ active shipments every week and day docs team have to track the end to end BL process manually on excels / google sheet

As soon as customer service team has processed the booking, docs team will enter the shipment with the details in their google sheet

They will followup with shipper to get the shipping instruction from them (yes you have guessed it right this collaboration happens on whatsapp as well)

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As soon as they receive the instruction they start the process with shipping line, once the process of draft and its approval is done complete they have to followup with two teams - accounts payable and credit control

Docs team as soon as the approval has been received from shipper on drafts

Release From Carrier

Docs team follows up with carrier and gets the invoice

Docs team shares the invoice with Accounts Payable team for payment

Docs team follows up with the Accounts Payable team whether they have made the payment or not

Once Accounts Payable team pays they share the payment information with the Docs team

All teams manage and track statuses of payment in sheets like this

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Release To Customer

Docs team follows up with Credit control team whether the invoice has been shared with the shipper or not

Docs team follows up with Credit control team whether shipper has paid or not and whether they have approved the BL release or not

Credit control team informs docs team about BL release approval once the payment is received from the shipper

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Pain Points

Not able to track current statuses of BL in real time as information is in silo across teams

Not able to seamlessly release BLs to customers on time

Not able to track critical timelines and priortise which shipments to tackle first

Not able to seamlessly collaborate on BL release process internally

Not able to seamlessly collaborate with shippers on BL release process

Owner / Manager in FFs

In midst of all this a owners of these FF companies never has a solid answer to shouting shippers

Why is there BL not released ?

Why is there BL on hold even when they have paid on time ?

They dont have a clear visibility on performance

What is the avg turn around time we have for BL release to customer from the time shipment is sailed ?

What is the avg turn around time we have for BL release from carrier from the time shipment is sailed ?

Which BLs are on hold and why ?

How many delayed BL release we have this week ?

What is our overall ratio of delayed to and then further analyse the same by customers and sales person ?

Whats the top reason to lose business ?

And many such questions remain only as guesstimates. Owners tend to loose alot of money in bad debt if the BLs were released without getting payments done from the shipper

Owners don’t have controls

They cannot hold the release of the bill of lading to a customer if they are not paying on time or their payments have not come

They dont know who approved the BL release and why even when there was a pending payment

The Approach 🧠

Help us build and experience which allows the different personas

To digitise above process and eliminate the need of excels to track the complete process

Help manage shippers and Freight Forwarder’s internal teams manage all their tasks and steps digitally

Help them track the current open tasks across shipments and priortise them based on due date

Complete these tasks and update relevant information, upload relevant documents being received and share updates to the other stakeholders involved

Eliminate internal whatsapp group and enable internal teams of a freight forwarder to collaborate on a BL seamlessly and release them faster to the shippper

Enable seamless collaboration between freight forwarder, shipper

It should be able to give one click business insights to the business owners

Anything else that Shipmnts can do to make this process lightening fast and seamless?

Sample of the sheet which is maintained to track the end to end process

BL Flow

BL Flow

Scope of work

Sales Executive

Booking party

Liner

Customer

Job number

Job date

Booking No.

No. of cntrs

SI cut off date (from Booking)

AMS filed on

SOB / ETD

POR

POL

POD

FPOD

BL Type

BL Terms

SI received from client /Prepared

SI Submission (post receiving Si and docs from customer)

1st draft from carrier

Share BL draft to Customer for Approval Post receiving from carrier)

MBL draft approved by Client

Invoice requested to Carrier

CARRIER INVOICE RECVD

BUY COST UPDATED

CARRIER PAYMENT PAID

Sharing of UTR details with carriers

MBL RELEASE FROM CARRIER

CUSTOMER INVOICE CREATED

CUSTOMER INVOICE SENT

CUSTOMER PAYMENT RECVD

MBL RELEASE TO THE CUSTOMER

BL Surrender

REMARKS