A Singapore-based shipping company and multinational information technology giant are working on a blockchain trial to create an electronic Bill of Lading.
Many of the digital transformation strategies for companies have been the death of paper trial. For the partnership between Singapore’s leading containership operator and multinational information technology giant, the solution is blockchain. The two will trial to design and create an electronic bill of lading, overcoming the cumbersome documentation process in supply chain management.
Not a Clean Bill
Typically, a Bill of Lading is issued by the master of the ship to the individual consigning the goods onboard a ship’s cargo. The bill contains a detailed list of the cargo’s contents.
Clearly an important document, the Bill of Lading facilitates international trade since legal and commercial information are inked on it. These might include evidence of contract of carriage, receipt of goods and the title of goods.
Banks rely on the document to provide trade financing. It is also mailed to various parties, increasing the risks of fraud, loss of the original document and document handling costs, spelling inefficiency across the supply chain.
Blockchain for Productivity
The two partners have proposed to use an electronic Bill of Lading, or e-BL, to reduce the paper trail. Instead, the paper documentation process will be replicated online on a blockchain ledger created by the multinational information technology giant.
Cost savings are possible since unnecessary handling costs are cut, and the possibility of fraud is minimised.
For the containership operator, the blockchain system is a big step forward. The e-BL is part of the company’s ultimate goal to create an intermodal transport logistics ecosystem which incorporates the use of blockchain. As the world’s ninth top containership operator and one of the biggest ship-owners in Southeast Asia, the company owns and operates a staggering fleet of about 180 container and multipurpose vessels. These serve over 500 locations in 100 countries worldwide. The sheer scale with which it is working with demands an efficient solution to negate any unnecessary and uncalled for administration.
Its Executive Director said, “As an international shipping company, we believe we have a role to play in enhancing efficiencies within the intermodal transport logistics ecosystem. Working with a complex logistic network comprising ports and terminals, agencies, government entities, banks and shippers; systematic supply chain management is increasingly important to lower costs through the chain by cutting unnecessary expense, movements and handling.”
“Traditionally, information flow is predominantly handled via manual processes and the supply chain is slowed down when there are many points of communication within its framework. The use of blockchain technology to allow for the direct exchange of documents and information via the decentralised network to boost transparency, eliminate disputes forgeries and unnecessary risks will be key for this industry to progress.”
Off into the Horizon
In an infographic designed by the multinational information technology giant, the benefits of blockchain to battle the tide of paper trail in the shipping industry is astounding. The transparency and security provided by blockchain has the potential to raise worldwide GDP by almost 5% and total trade volume by 15%.
In time to come, the partners hope to extend the e-BL to shadow an end-to-end shipment in real time.
In a separate report, the blockchain platform is said to still be in the pilot phase. By the end of 2018, it is expected to be fully commercially available.
The Maritime and Port Authority of Singapore, Singapore Shipping Association, Infocomm Media Development Authority, Singapore Customs and the Bank of China, are supporting the collaboration between the two entities.
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