(Bloomberg) -- They are relatively easy to fake. Frequently get lost. And can add huge amounts of time to any journey. Yet paper documents still rule in the $25 trillion global cargo trade with four billion of them in circulation at any one time. Most Read from BloombergKey Taiwan Tech Firms Helping Huawei With China Chip PlantsWhy a US Recession Is Still Likely — and Coming SoonWall Street Fear Gauge Ratchets Up After Jobs Data: Markets WrapKevin McCarthy Ousted as US House Speaker by Republica
-- They are relatively easy to fake. Frequently get lost. And can add huge amounts of time to any journey. Yet paper documents still rule in the $25 trillion global cargo trade with four billion of them in circulation at any one time.Airbnb Is Fundamentally Broken, Its CEO Says. He Plans to Fix It.
“It’s the easiest type of fraud to commit,” said Neil Shonhard, chief executive officer of anti-fraud platform MonetaGo, “either falsifying a document or sending duplicates to banks ‘A’ ‘B’ and ‘C’ without them speaking to each other.” The greatest barrier to that expansion has been legal. Banks, traders, insurers and shipping companies have had the means to go digital, but up to now a paper bill of lading has been the only document recognized by English law that gives the holder title ownership to a cargo. A bank or insurer won’t cover a deal that isn’t legally secure, and without financing, deals are unlikely to happen.
The UK’s legal push is based on a model law put forward by the United Nations. Such transnational bodies have been important in putting together statutes that have to be acceptable and usable by the whole world. It has been broadly welcomed by the industry: “We believe this is one of the solutions which would help in reducing documentary fraud,” said the trading house Trafigura Group.
Such trips still happen, even though that transfer of documents could feasibly be executed in minutes via an online platform. The full documentation process on a 2022 deal to ship nickel in containers from miner BHP Group Ltd. in Australia to Chinese buyer Jinchuan, financed by banks from each country, took under 48 hours over the ICE Digital Trade platform, the company said.
In many cases a carrier will need to set sail before this process is complete, so the vessel’s captain will provide a shipping agent with a letter of authority to complete the documents on their behalf. “Practically everybody I know who works in the industry has at some point encountered bills of lading getting lost,” said Richard Watts, a Geneva-based specialist in maritime trade and a board adviser to electronic document platform Secro. “It doesn’t happen often but given the pure number of documents that we’re sending around the world at any one time — even if 0.001% of them get lost — that’s still a very expensive and complex problem, often with a ship waiting to discharge.
“We’re still living in the Dark Ages in terms of global trade,” said Secro’s Watts, “after this call I’ve got to go down to pick up some bills of lading for a fertilizer shipment from a bank and send them via courier to Argentina, it’s all just a bit silly.”Hacking the Help Desk: How Attackers Talk Their Way Into Company Networks
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