IBM’s successful blockchain trail on cost-effective shipment for efficient SCM

Blockchain technology has been a buzz world of-late, when it comes to this trendy topic then the most appealing aspect is the probable end-to-end solutions that strikes a chord in various business domains to get rid of bottlenecks that’s quite prevailing in the current ecosystem. 

The trade finance operation and foreign exchange are costly and slow that also involves a series of intermediaries. With the deployment of Blockchain technology, one can think of an ecosystem which is from the involvement of intermediary and at the same time, it also reduces the cost of processing, hence, making the foreign exchange and cross-border transaction cost-effective and time-saving.

However, there are apprehensions that surround Blockchain, like its highly transparent, which makes it easy for anyone in the network to see forex trade occurring in real time.

Companies like IBM have time and again laid emphasis on this fact and have promoted the integration of Blockchain based system with the conventional supply chain management system. It has now instigated the Blockchain-based trial to track the shipment of 28-tons of Mandarin Oranges. This shipment was transported from the port of origin (China) to the port of destination (Singapore), and IBM used the Blockchain platform to track this consignment.

Usually, a letter of credit transaction will encompass the multiple stages of documentary examinations at both issuing and advising banks. Under this mode of transaction, upon complied presentation of various documents (including bulky transport documents, such as bill of lading/AWB/Seaway bill, commercial invoices, insurance certificates, packing lists, fumigation etc need to be stipulated as per UCP (unified customs & practice 600)) as called-in by the L/Cs, delivery of consignment will take place, and this would be lengthy and time-consuming. 

Whereas in this instance of the trial project, IBM generates a bill of lading in electronic mode or as they mentioned e-BL which expedites all these administrative processes. While the trade cycle takes comparatively lesser time.

In this use case, Hupco, the chairman of the fruit importer company noted that with the deployment of blockchain technology in this shipping administrative processes has considerably speeded up the entire process with cost-effectiveness. Courtesy: Blockchain council

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