One of the most important efficiency gains from the system was the reduction of the time taken to transfer a bill to just one second. This is an improvement of 60,000%.
The lading bill is a document typically issued by a shipping company for the documentation of a shipment. It acts as receipt of goods and contract of a shipment and may represent the possession of goods or the right to receive a shipment. It also shows the terms and conditions of a shipment and functions as a proof of the loading of the goods.
And as paperwork, it is usually done on physical paper, which must be printed and distributed to the parties concerned. In this situation it is usually five to seven days before the bill of lading is transferred. The reason why it takes so long is largely due to the fact that many different parties participate in each shipment, each with its own separate systems and data silos as well as its own brokers and intermediaries, and simply the time taken to physically move paper documents through such a complex web of interlocking interests.
This system still works primarily on paper. In addition to inefficiency, there are also obvious security costs, where document fraud accounts for about 40% of all maritime fraud. In an age when cargo thieves use 3D printers to imitate security devices and cover their tracks when they enter shipments, one of the greatest threats is still paperwork that is easy to manipulate.
It’s an amazing dichotomy. For a long time, e-BLs have promised massive efficiency gains. And like many things in blockchain, the electronic lading bill (e-BL) was not first conceived on the blockchain and some equivalents already exist.
Current non-blockchain e-BL systems work similarly to the SWIFT network, as a trusted network operated by a profit-making third party who establishes the system rules, controls access and provides the tools to interface with the system. When this system is used by different parties, they have an efficient and mostly reliable digital network that works better than paper. But there was limited acceptance of these.
There are problems getting everyone on the same page and using these systems means essentially committing oneself to a monopoly of customer. In this regard, blockchain can generally deliver massive efficiency gains for e-BLs, while overcoming the limitations of non-blockchain e-BL systems and opening up many new possibilities.
Orange importer Tay Khiam Back, CEO and chairman of Hupco, said “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.”
PIL executive director Lisa Teo said “We are pleased with the steady progress of our blockchain collaboration with IBM. 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.”
It’s key that a wide range of participants are feeling the benefits.
IBM Asia Pacific CEO and chairman Harriet Green said “A blockchain-based trade network will be a game-changer, and we have a great opportunity here with our partner PIL to revolutionize 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.”
For Chinese, mandarin oranges represent prosperity and good luck.