Pacific International Lines (PIL) has used an electronic Bill of Lading (e-BL) built on the IBM Blockchain Platform in a real-time pilot tracking shipment of mandarin oranges from China for the Lunar New Year celebrations.
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, claimed the parties.
The 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.
The motivation is to reduce document processing times to almost zero by combining e-BL with blockchain technology, with an instantaneous digital transfer of the bill of lading for cargo. Document handling is automated, and goods can be delivered more quickly and efficiently.
Hupco, a Singapore-based importer 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).
Tay Khiam Back, Chairman and CEO of Hupco said: “By using the e-BL, we have seen how the entire shipment process can be simplified and made more transparent with considerable cost savings.
“Our customers can expect their orders in a more timely manner, and, importantly, with freshness assured.”
Companies shipping perishable items such as 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.
For this trial the consignee Hupco benefited from collecting their goods faster with the immediate receipt of the e-BL.
It also enjoyed lower operating costs due to reduced electricity costs resulting from less charging for reefer containers at the port while waiting for collection as well as lower storage costs at port, noted PIL and IBM.
Further benefits included stronger provenance and real-time visibility of documents which is both traceable and tamper-proof and greater security by helping prevent document fraud, which comprises 40% of all maritime fraud.
The live trial follows the e-BL Proof of Concept, announced in October 2018, where PIL and IBM collaborated to digitise the lifecycle of negotiable and non-negotiable Bills of Lading on top of distributed ledger technology.
The live trial is an important milestone because it validates how the system works in real-time conditions, noted the partners.
Harriet Green, CEO and chairman of IBM Asia Pacific, said: “A blockchain-based trade network will be a game-changer, and we have a great opportunity here with our partner PIL to revolutionise the documentation processes in a way that benefits the entire industry.
“Powered by blockchain, the e-BL developed by the IBM Research Singapore will be critical in helping to establish an extensible ecosystem for trade, thus expectedly enhancing trade efficiency and building trusted trade relationships among the industry players.”
The e-BL platform gives various ecosystem players the convenience to manage a Bill of Lading digitally with accuracy and speed, including banks.
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.