Singapore-based Pacific International Lines (PIL), one of the world’s top ten shipping companies, has completed a blockchain pilot with IBM for an electronic Bill of Lading (e-BL). Next Tuesday the Lunar New Year will be celebrated in Singapore and mandarins are a traditional gift symbolizing good luck and prosperity for the new year. Hence it was fitting that the transaction involved a shipment of more than a hundred thousand mandarin oranges from China to Singapore.
Bills of lading are provided by the ship when the cargo is loaded. It’s both a receipt for the goods and functions as a contract of shipment. Transferring a bill of lading passes the ownership to the recipient, and this exchange of documents usually causes delays of several days because it has to be mailed.
By exchanging documents electronically with an e-BL, the transfer is almost instant, and the goods can be released earlier. Time is money for financing and Bills of Lading are the primary documents for trade finance or Letters of Credit in particular. But a faster process is also critical for perishables and reduces refrigerations costs while the paperwork is resolved.
Furthermore, by using blockchain, fraud can be reduced. Document fraud represents 40% of maritime fraud, and by using the blockchain network, the participants are authenticated, and the documents can’t be duplicated.
PIL first announced plans for this project in October last year following a previous IBM track and trace proof of concept (PoC) that completed in February 2018. The current project also involved the Maritime and Port Authority of Singapore, Singapore Shipping Association, Infocomm Media Development Authority, Singapore Customs (National TradePlatform), and the Bank of China.
“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,” said Lisa Teo, Executive Director of PIL.
Harriet Green, CEO and Chairman of IBM Asia Pacific, said: “We have a great opportunity here with our partner PIL to revolutionize the documentation processes in a way that benefits the entire industry.”
The pilot was built to be compatible with TradeLens, IBM and Maersk’s blockchain logistics platform. PIL is also a member of TradeLens.
Inevitably given the size of the industry, there are multiple blockchain-based e-BL projects. Israeli shipping company ZIM completed its first pilot with the Wave e-BL platform in November 2017. Two weeks ago it announced a phased rollout of e-BL across particular shipping routes.