IBM has partnered with one of Southeast Asia’s largest shipping firms to complete a real-time pilot of its electronic bill of lading (eBL) add-on for the IBM Blockchain Platform.
Pacific International Lines (PIL) was able to achieve an instantaneous digital transfer of the bill of lading for a shipment of mandarin oranges from China, which is a process that, using conventional bill of lading methods, can take up to seven days and is at risk of documents being delayed or lost.
The shipment was received by Hupco in Singapore, which acted as consignee for the trade.
The emergence of eBLs has the potential to revolutionise the international trade industry as archaic paper-based systems mean goods are often held up in ports waiting for bills of lading to verify the goods.
However, national regulators are being forced to play catch-up with this technological innovation, with countries scrambling to implement the legal infrastructure to recognise an eBL without a physical counterpart. Currently, only the US has the facilities to accept electronic documents of commercial agreements and transactions – including eBLs – as legally valid and enforceable, with several other nations looking to implement a similar system.
IBM was unable to verify to GTR whether a paper bill of lading was also used during the pilot to meet legal requirements in China and Singapore.
In the PIL transaction, the quick turnaround of the eBL was crucial as the oranges were being imported in preparation for the Lunar New Year celebrations on February 5, where they are traditionally offered as gifts and represent a sign of prosperity.
In addition to the speed of document transfer, the use of blockchain technology for international trade also promises to increase transparency and tackle the ever-present risk of fraud or mishandling of documents. Document fraud represents 40% of all maritime fraud, according to PIL and IBM.
An IBM spokesperson confirms with GTR that the eBL system is compatible with its other trade finance initiative, TradeLens, which is also built on the Hyperledger Fabric-based IBM Blockchain Platform.
The TradeLens platform, which went live for early adopters in August 2018, was jointly developed by Danish shipping firm Maersk and IBM and aims to connect all parties in the trade ecosystem, enabling them to interact efficiently and access real-time shipping data.
TradeLens will also enable participants to digitalise and exchange trade documentation – anything from packing lists and shipping instructions to bills of lading and certificates of origin – all backed by a secure, immutable audit trail.
According to Harriet Green, CEO and chairman of IBM Asia Pacific, the eBL developed by 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”.
Lisa Teo, executive director of PIL, adds: “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.”
The live trial follows a proof of concept, which was conducted in October 2018.