As the Chinese New Year celebrations near, IBM has undertaken a shipping tracking trial with 108,000 mandarins. The mandarins, which Chinese culture considers a symbol of prosperity, had their main shipping document, called a bill of lading, recorded on a blockchain.
The bill of lading serves as documented proof of ownership of the shipped goods, as well as the contract of the shipment and the receipt of the goods. Usually, this document has to be drawn up and sent to every party involved in the shipment process, resulting in administrative process of up to seven days. Everyone from the shipping company to the bank financing the deal has to receive a copy.
For this trial, IBM transformed the physical bill of lading, or BL, to an e-BL. This increased the efficiency and speed of the administrative process to just one second, 60 million percent faster than the traditional method. It also saved Hupco, the fruit importer and owner of the shipment, a lot of fees in the process thanks to the automation provided by the blockchain. No longer do trucks or ships have to wait for documents to pass through tedious traditional means before they are able to ship the products.
In a press release, the CEO and chair of Hupco, Tay Khiam Back, stated, “By using the e-BL, we have seen how the entire shipment process can be simplified and made more transparent with considerable cost savings.”
IBM is very positive about the results. They said that apart from cutting operating costs, another very important advantage of recording this document on the blockchain is a reduced risk of fraud. The shipment is easier to trace, information handling is simpler, and records are tamper-proof. Document fraud, accounting for over 40% of all fraud in the maritime industry, can be effectively eliminated.
“To date, we have 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,” Lisa Teo, the Executive Director of Pacific International Lines, said in the press release.
IBM seems to be the industry leader in supply chain tracking on the blockchain. Their Food Trust blockchain went live last year, with many retailers including Walmart participating. IBM has already announced another blockchain-powered supply chain trial that will track a shipment of cobalt from its source in the Democratic Republic of Congo through a Chinese refinery and a South Korean battery factory to a Ford Motors manufacturing plant in the United States.