Electric vehicle manufacturer Tesla has completed a pilot project on the use of blockchain in its shipping process. The American company used a blockchain application to share real-time data with the Shanghai International Ports Group (SIPG).
The blockchain platform was built by CargoSmart, a subsidiary of Hong Kong-based shipping company Orient Overseas Container Line. It brought together Tesla, SIPG and Chinese shipping company COSCO. The three companies were able to conduct real-time exchange of shipment data, CargoSmart stated in a press release.
The pilot launched in December 2019 and allowed SIPG and COSCO to streamline the cargo release process, one that can be extremely tedious and expensive. This is when the shipping operator, in this case COSCO, hands over the shipment at the port to the client, in this case Tesla. The client must present an original bill of lading to the operator in order to receive the goods. However, quite often, there are complications regarding the bill of lading that leads to weeks of delays and extra charges.
Wu Yu, an executive at COSCO commented, “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 application was not only beneficial to the shipper and the client, but the ports authority as well. SIPG runs the Shanghai port, the busiest port in the world, processing over 37 million twenty-foot equivalent units every year. The blockchain app allowed SIPG to have a trusted view of COSCO’s sea waybill data, allowing it to prepare delivery orders for consignees and their shipping agents in good time. Henry Huang, the general manager of operations at SIPG believes this is the first step towards a “paperless, trusted, and seamless trade processes at the Port of Shanghai.”
The project will be developed further for members of the Global Shipping Business Network (GSBN), a blockchain consortium for the shipping industry. The network’s incorporation is still pending, but it has already attracted some of the industry’s heavyweights, including three of the top ten global shipping companies and three of the top ports operators.
And while GSBN awaits regulatory approval to go live, IBM and Maersk have already launched their own blockchain consortium for the shipping industry. Known as TradeLens, it has attracted some big names as well—over 100 in total—including Hapag-Lloyd and CMA-CGM. Incidentally, these two have pledged to join GSBN once it launches.
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