Chain of custody offers a new approach to supply chains that has the potential to transform the international trade in recyclable paper, and with it the global circular economy.
The UK Electronic Trade Documents Act, which came into force on 20 September 2023, puts digital documents such as electronic bills of lading (EBOL) on the same legal footing as paper originals. The United States is also tabling proposals to amend its Uniform Commercial Code (UCC) to enable digital documentation. These reforms are opening the way to electronic chain of custody software solutions that could significantly improve the traceability and transparency of recyclable trading worldwide.
Uses of chain of custody
In the past, chains of custody have been used to govern the movement of everything from scientific samples to criminal evidence – basically any situation where it’s important that the contents of a shipment are not altered or inaccurately described.
Traditional chains of custody mostly used paper documents and wet signatures, but digital signatures and smart contracts are now putting the benefits of the chain of custody approach within the reach of a whole range of industries, especially those where traceability and verification are key.
How do chains of custody work?
Chains of custody work by documenting what is being shipped, where it is, and who’s in charge of it. This typically includes details of the commodity in question, such as its grade, quality, quantity and provenance. The chain of custody can also provide a digital paper trail to identify where the shipment is on its journey, and who is responsible for it at any given point in time.
Because chains of custody have rules that all participants need to agree on, it becomes very useful in the event of a dispute or claim. In essence, the chain of custody clarifies who gets the blame if someone doesn’t follow the rules. It also deters participants from making unsubstantiated claims for compensation or refunds because the paper trail is there for all to see.
The trade in secondary raw materials is a prime example of where chain of custody comes in useful. In the timber trade customers want evidence that their goods have been sustainably sourced. So they set up a credible certification scheme backed by chain of custody principles.
The growing need for a broader set of standards to govern chain of custody systems has resulted in the creation of chain of custody ISO 22095.
What’s in the chain of custody ISO?
ISO standard 22095 contains 32 pages of text and diagrams that provide unambiguous definitions of different chain of custody models, and the corresponding requirements, which are independent of sectors, materials, products and issues addressed. If you don’t want to buy the ISO document, Circularise provide a useful overview of the four main types of chain of custody.
Improving traceability and trust
ISO 2095 could transform how waste paper traders and UK exporters of secondary raw materials do business. That’s because the global trade in goods and physical commodities – despite many vested interests – is on the road to digitalisation. And as more live digital information gets shared by waste producers, waste suppliers, waste traders, shipping lines, freight forwarders, agents and end-processors, a digital chain of custody solution provides opportunities to drive greater transparency, trust and growth all along the supply chain. Blockchain technology may well play a part in this.
Waste trading is going digital
Governments and port authorities are already pushing for progress in live data-sharing, especially in the field of compliance. Legislation in places like the UK and Singapore is being put in place to enable wider digitalisation across goods trading. The UK government is introducing mandatory digital waste tracking in April 2025 that is set to replace paper-based documentation with a unified digital database.
Clearly then, momentum is growing behind digital transformation. In the next few years the global goods trade will almost certainly update its processes to enhance efficiency and verification. Chain of custody enabled software may soon be as essential as a single source of truth database for waste paper and plastic traders who want to grasp the digital opportunities coming down the line.