Tech giant IBM has successfully completed a trial test using blockchain technology to track a shipment from China to Singapore.
In an official announcement by the firm, a shipment containing 28 tonnes of mandarin oranges (approximately 3,000 cartons of 108,000 fruits), were delivered ahead of schedule for the Chinese New Year celebration on February 5.
The company explained its specific choice of mandarin oranges as they represent a symbol of prosperity in the Asian region while they also say this is a trial test to ascertain the project’s effectiveness on a larger scale. Details concerning the shipment’s document and bill of lading were all recorded on the blockchain.
The documents include a proof of ownership of goods, receipt of goods and a contract of the shipment; all of which before now were normally mailed to all individual parties in the shipment chain, including banks providing the trade financing.
For this pilot project, IBM created an electronic bill of lading (e-BL), which helped streamline and speed up the old administrative processes to just ‘one second’ as the document flow through the parties involved in the chain is fully automated – a huge contrast to the paper based process which takes up to five or seven days. The e-BL also helps shippers follow a product from factory to depot.
CEO of Hupco Pte Ltd, a mandarin orange importer in the region remarks:
We are delighted with the outcome of the trial. By using the e-BL, we have seen how the entire shipment process can be simplified and made more transparent with considerable cost savings.
According to IBM, other advantages of the blockchain-based electronic shipment system include: cutting operational cost in cases where electricity is required for refrigerated cargo containers awaiting collection, reduced storage costs for perishable items and other overhead costs.
The blockchain system also allows for better handling of information, provides traceability and tracking of shipment cargoes as well as a tamper-proof record ledger for the shipping industry; where document (paper work) fraud accounts for 40% of illegal practices in that industry.
IBM continues to get involved in multiple projects involving use of blockchain technology in solving problems of inefficiency across various industries from tech, logistics, finance, healthcare and more. The company is quoted to be spending approximately $160 million yearly on blockchain projects, with over 1,600 employees across different blockchain initiatives.
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