By Staff Reporter
Blockchain is often seen as a solution looking for problems and supply chain management is widely seen as one of the best use cases.
There have been a number of experiments of distributed ledger in shipping and supply chain involving leading industry players.
The latest amongst them is the Pacific International Line’s (PIL) collaboration with IBM to ship 28 tons of fresh mandarin oranges from China to Singapore prior to the Lunar New Year holidays, according to a press release.
They did so by digitizing the Bill of Lading which reduced the time to transfer shipping documents from seven days to one second.
“With the use of IBM Blockchain powered e-BL, the trial has produced a significant reduction in the administrative process of transferring the title deed from five to seven days to just one second,” said the statement.
Bill of Lading is one of the most crucial documents used in international trade, typically issued by a shipping carrier to document the title or ownership of goods. It also functions as a receipt of goods and a contract of the shipment.
Instantaneous digital transfer of the bill of lading ensures that the goods delivered more quickly and efficiently, which is crucial in perishable food and fresh produces.
Hupco Pte Ltd, a major importer in Singapore of mandarin oranges for the upcoming Lunar New Year, took part in the e-BL trial as the consignee of 3,000 cartons of mandarin oranges (approximately 108,000 mandarin oranges).
Mr Tay Khiam Back, chairman and chief executive of Hupco said that the blockchain helped in simplifying the entire shipment process and provided more transparency, resulting in considerable cost savings.
Harriet Green, chief executive and chairman of IBM Asia Pacific, said that “a blockchain-based trade network will be a game-changer” to create a more efficient and faster trading eco-system by replacing the current paper-based documentation processes with a digitized one.
Companies shipping perishable items like these mandarin oranges require faster document processing and expedited cargo clearing for delivery. This shortens the overall shipping time – reducing potential risks for retailers and providing fresher options to consumers.
Some of the benefits include:
- Real-time receipt of the document means lower operating costs such as electricity costs (charging for refrigerated cargo containers at the port while waiting for collection), storage costs (at port) and cost savings from enhanced equipment utilization.
- Stronger provenance and real-time visibility of documents which is both traceable and tamper-proof.
- Greater security by helping prevent document fraud, which comprises 40% of all maritime fraud.
The live trial follows the proof-of-concept that was announced in October 2018. It was supported by Maritime and Port Authority of Singapore, Singapore Shipping Association, Infocomm Media Development Authority, Singapore Customs (National TradePlatform), and Bank of China Limited Singapore Branch (BOC)
Lisa Teo, executive director of PIL, said, that it has “received very positive feedback from the industry and authorities, and we are enthused by the possibilities of how our blockchain developments can transform and inject a much-needed boost in efficiency and innovation into the industry.”
A similar trial from Singapore to Brunei has taken place for negotiable e-BL with key stakeholders participating including Bank of China Limited Singapore Branch (BOC).
The negotiable e-BL network establishes an extensible ecosystem which facilitates trade transactions and settlements, as the process of issuing Letter of Credit and Guarantee is enhanced.
Previous experiments of blockchain in supply-chain include a collaboration between Cargill, HSBC and ING to ship corn from Argentina to Malaysia with a help of a digitized Letter of Credit.