Blockchain has proven to be a revolutionary piece of technology and it has expanded far beyond than just fintech. The tech is now being exploited across several industries ranging from the supply chain, healthcare, green energy trading, and much more.
The global shipping industry is one of the sectors that have recently started to experience blockchain-based innovation. The shipping industry has followed the traditional ways for a long time and the formalities related to every shipping transaction are quite chaotic.
The process involves a variety of documents such as sales contracts, bills of lading, charter party agreements, port documents, letters of credit and others related to the vessel and the cargo. These documents often need to go through multiple parties, and this makes the entire process quite lengthy and hectic. It is quite a common event that the vessels often arrive at the discharge port before the bills of lading.
Blockchain to revolutionize shipping industry
To address these issues, CargoSmart, the software arm of Hong Kong-based Orient Overseas Container Line, has partnered with Cosco, Shanghai International Port Group (SIPG), and the electric vehicle giant Tesla, to conduct a pilot program for an application that would revolutionize the cargo release process.
The application uses blockchain technology to exchange shipment data in real-time between the carrier and the terminal operator. CargoSmart has been conducting research and development for its application to digitize the documentation process thus reducing the consignee and shipment agent verification steps. As a result, the shipping process becomes a lot faster.
About the application, CargoSmart stated:
“The application will undoubtedly accelerate the digitalization of shipping industry processes and the further optimization of currently stressed global supply chains.”
Future upgrades coming
Prior to this, Tesla was successful in speeding up its pickup process by implementing CargoSmart’s application to streamline the process back in December 2019. Since then, the application has been updated and it now boasts more helpful features like “display laden gate out, appointment date, and terminal release, enabling shippers to have better visibility of their cargoes.”
The company plans to develop the application further and establish a blockchain consortium for the members of the Global Shipping Business Network. The report also states that more tests would be conducted at ports in Xiamen, Qingdao and Laem Chabang in Thailand “to broaden the scope of the pilot by involving more carriers and terminals.”
Henry Huang, a senior executive at 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.”