BOLs: Recent Digital Innovations Drive Efficiency
A bill of lading (BOL) is arguably one the most important parts of a refined fuel transaction, yet one of the most overlooked. Its main functions have remained the same since inception: to serve as both a title and receipt for the commodity being shipped, and to outline the agreed terms and conditions for the transportation of the product.
The BOL has been a part of the process since sea commerce began centuries ago and hasn’t evolved much in decades. The opportunity for continued digital transformation of this paperwork promises to make the BOL a more efficient and effective tool moving forward.
Here’s a quick look at where the BOL started, how it is evolving and the impact on business efficiency and profitability.
A brief history
Bills of lading were first used in the 1400s as a transportation contract. When commerce started to grow between cities, it became necessary to create a system that could function as a receipt for goods received by the merchants and ship owners. The BOL really became important once merchants’ businesses grew so large that the merchants themselves weren’t able to travel at sea themselves with their products. These transportation documents were needed to prevent disputes and to serve as a proof of shipment to protect both the shipper and receiver.
Today, that system hasn’t evolved much – physical piece of paper remains at the center of transactions while the paperwork itself essentially remains the same. The biggest change has been customizing the document for different businesses and industries, using hundreds of different codes and unique nomenclatures, with no overall standardization.
However, in recent years there’s been an uptick in the use of electronic BOLs – and it is proving to be a game changer for all involved, although it is not without its challenges.
Digital transformation of BOLs
Electronic bills of lading are eliminating the paper-based system. With eBOLs, there is potential to make efficiency gains and ultimately increase profitability.
While eBOLs have many benefits, the biggest one is the speed and automation of customer invoicing. It’s becoming common practice in the U.S. to use eBOLs—more than 300 petroleum marketers are now using them to automate their invoicing processes.
Electronic BOLs also help with overall accuracy and elimination of mistakes. By not relying on manual data entry, processes are streamlined with greater accuracy. eBOLs also help to catch missing carrier paperwork more quickly. And saving a BOL electronically as a PDF improves reporting and historical information gathering.
However, the digital transformation faces some challenges. Without standard formatting or nomenclature, combined with the use of hundreds of different product codes in the fuel industry, the progress with electronic integration becomes more challenging.
The most recent digital innovation in BOLs
Despite challenges, petroleum marketers are finding one of the latest eBOL innovations to be potentially transformative: a system to account for lost or missing BOLs.
In refined fuels, the average value of one BOL can easily top $15,000. When BOLs are incorrect or lost, revenue and profits are impacted, while productivity is lost reconciling missing information.
New technology is helping suppliers identify lost documents (often before customers realize they were overlooked) to ensure BOLs are reconciled in a timely fashion. A good example is DTN TIMS BOL Recon, which automatically identifies missing BOLs every 24 hours.
A SaaS-based solution can reduce overhead, help realize revenue faster, and boost transparency between the suppliers and terminals. The DTN BOL Recon system includes a watch list function that allows users to add BOLs to the list. The system will inform the user when it sees that a BOL has been billed.
This digital transformation is quickly making these contracts more effective and efficient. To learn more about DTN solutions for refined fuels, visit DTN.com.