Elon Musk’s electric car manufacturer Tesla piloted a blockchain solution in late 2019 with leading shipment management technology solutions provider, CargoSmart, Cosco Shipping Lines, and the Shanghai International Port Group has been revealed. Tesla’s speed will not only be reflected in the capability of the auto and in the automobile manufacturing process but now also in the logistics of them to market faster.
The project was intended to design, built and test a new application to transform the cargo release process and has the potential to accelerate the digitalization of shipping industry processes and the further optimization of currently stressed global supply chains.
From a Costco Wechat post:
“Originally, customers needed to complete the import business processes of shipping companies and ports separately but now, with the help of blockchain’s traceable and trustworthy technical features, shipping companies and ports have realised the interconnection and interoperability of data between systems and the cooperation and mutual trust of processes which will allow for a paperless process. It affects the entire process of import delivery and also guarantees zero delays for customers’ import businesses.”
The application will soon be available for participants of the recently formed Global Shipping Business Network (GSBN) blockchain consortium once it is officially established.
It is among the first pilot projects with an ocean carrier conducting a real-time exchange of shipment data with a terminal operator through blockchain. The pilot not only demonstrated the benefits of having a single, trusted source of truth in cargo documentation, but also the efficiency gains for industry participants.
Henry Huang, Executive DGM of Operation & Business Department of SIPG, said:
“The pilot is a key component of our journey towards paperless, trusted, and seamless trade processes at the Port of Shanghai, and it demonstrates the benefits for supply chain stakeholders around the world. We look forward to extending the collaboration with more supply chain stakeholders to render extraordinary service to our community.”
Wu Yu, General Manager of Business Process & System Division of COSCO stated:
“The pilot with SIPG and CargoSmart showcased significant efficiency gains not only in the cargo release process but also for downstream supply chain planning by presenting a single source of truth for documentation for all involved parties. We look forward to more blockchain-based applications that can create value for customers and the industry alike.”
The pilot project was designed to minimize consignee and shipping agent verification steps with their ocean carriers in order to speed up the release of sea waybills. As a result, truckers are able to pick up their cargo at the terminal faster, helping shippers meet delivery windows and ensure that service quality and customer commitments are met.
During the pilot in December 2019, COSCO and SIPG streamlined the cargo release process by enabling Tesla to accelerate its cargo pick up procedures on a trusted and secure platform. The pilot also allowed SIPG to view a single, trusted source of COSCO’s sea waybill data, enabling faster preparation of delivery orders for consignees and their shipping agents. In late March 2020, CargoSmart further enhanced the application to display laden gate out, appointment date, and terminal release, enabling shippers to have better visibility of their cargoes.
The successful pilot has proven that the unique collaboration model between ocean carriers and terminal operators is able to create benefits for stakeholders along the global supply chain. Leveraging this successful experience, the cargo release application is expected to further promote carrier-terminal data exchange and streamline operations. It is envisaged that this application will unleash the full potential of the proposed GSBN platform once it is established, subject to the requisite regulatory approvals.
As preparations continue for the future formation of the GSBN, contingent upon securing required regulatory approvals, CargoSmart will conduct similar pilots with Xiamen Ocean Gate Container Terminal Co., Ltd. (XOCT) and other terminal operators such as those at the Port of Qingdao in China and the Port of Laem Chabang in Thailand. The objective is to broaden the scope of the pilot by involving more carriers and terminals and eventually extending the pilot to other industry participants in the near future. To further enhance the value of the pilot application, CargoSmart will enable APIs to explore and test ways to extend visibility to shippers for greater efficiencies throughout the cargo release process.
Maersk and IBM completed a competing shipping supply chain blockchain pilot in 2018 called Tradelens and another Singapore-backed logistics project has also been created called the Open Trade Blockchain.