A consortium of European companies involved in the Customs and Forwarding industry has successfully tested a blockchain system that can eliminate the need for printed shipping documents and save the freight and logistics industry hundreds of millions of dollars annually.
The consortium tested a method where documents are no longer exchanged physically or digitally, but instead, the relevant data is shared and distributed using blockchain technology under single ownership principles determined by the type of information. Through a detailed review of the current documentation processes, the group examined a re-allocation of information ownership, accountability and risk, enabled by the trust and security blockchain technology offers.
An international shipment of goods for companies in areas such as the automotive, retail or consumer goods industries typically requires more than twenty different documents to enable the goods to move from exporter to importer. Across these documents, up to 70% of the data can be replicated. This document-heavy approach limits data quality and real-time visibility to all parties involved in the trade and can also delay the financial settlement on goods.
The new method can speed up the entire flow of shipping documents, reduce the requirement for data entry by up to 80%, simplify data amendments across the shipping process, streamline the checks required for cargo and reduce the burden and risk of penalties for customs compliance levied on customers.
What is Blockchain?
Blockchain is a new type of distributed database system that maintains and records data in a way that allows multiple stakeholders to confidently and securely share access to the same information. The technology is poised to revolutionise operations across a multitude of sectors, such as financial services, government, healthcare, entertainment… and – is one of the most promising technologies in freight and logistics.
According to Wikipedia: “Blockchain technology has a large potential to transform business operating models in the long term. Blockchain distributed ledger technology is more a foundational technology—with the potential to create new foundations for global economic and social systems—than a disruptive technology … The use of blockchain promises to bring significant efficiencies to global supply chains, financial transactions, asset ledgers and decentralized social networking.â€
