Tech giant IBM is partnering with one of Singapore’s biggest shipper, Pacific International Lines (PIL), in digitalizing one of the most important documents in shipping – Bill of Lading.
The two firms will collaborate in designing and creating an electronic Bill of Lading (e-BL) which will exist on a blockchain. In international trade, the Bill of Lading not only serves as evidence of ownership of goods, receipt of shipment and contract of carriage but is also relied upon by banks and other financial institutions in the provision of trade financing.
Blockchain to the Rescue
But because the Bill of Lading is handled by multiple parties, there is the risk of loss and fraud. Additionally, it has to be mailed to the various parties and this results in unnecessary costs being incurred. With the e-BL which will reside on blockchain ledger developed by IBM, it is hoped that fraud and unnecessary handling costs will be eliminated.
“Traditionally, information flow is predominantly handled via manual processes and the supply chain is slowed down when there are many points of communication within its framework,” PIL’s Executive Director, Lisa Teo, said in a statement. “The use of blockchain technology to allow for the direct exchange of documents and information via the decentralized network to boost transparency, eliminate disputes forgeries and unnecessary risks will be key for this industry to progress.”
The collaboration between IBM and PIL is backed by among others Singapore Customs, Singapore Shipping Association, Maritime and Port Authority of Singapore, Bank of China (Singapore) and Infocomm Media Development Authority.
Good for the World
The e-BL initiative comes a little over a year since PIL together with the Port Authority of Singapore signed a Memorandum of Understanding with IBM with a view of jointly working on proof-of-concept blockchain solutions aimed at enhancing efficiency and security of the supply chain network in the Southeast Asian country. At the time, the CEO of the Port Authority of Singapore, Tan Chong Mong, pointed out that blockchain technology could spur the expansion of global trade:
“Blockchain has the potential to reduce inefficiencies and gaps within the supply chain, promote more cost-efficient transactions and facilitate the continued growth in world trade.”
This is not the first shipping line that IBM is collaborating with in utilizing blockchain technology to enhance operations in the supply chain. Early last year, for instance, IBM teamed up with the world’s biggest ocean container shipper, Maersk Line, in employing the blockchain framework implementation known as HyperLedger Fabric in operations stretching across a network of ports, ocean carriers and freight forwarders.