It is possible to retire the paper bill of lading in today’s digital world, a recent test of CargoX’s blockchain-based Smart Bill of Lading shows.
The test was carried out by G2 Ocean — a joint venture of Grieg Star and Gearbulk — and Manuchar NV. “Paper Bills of Lading are already considered a historic artefact… The Smart B/L will bring cost optimization and improved data security into their processes. The document transaction reliability in this system is undisputable,” Rune Birkeland, CEO at G2 Ocean, commented.
The CargoX Smart B/L is a solution for digital transfer of bills of lading issued by any cargo shipper worldwide. The system completes the document ownership transfer securely and reliably within minutes. That stands as opposed to the days or weeks it takes to send a document via regular courier services.
According to G2 Ocean, the new approach prevents delays and business damage or loss, demurrage and other costs. In addition, it provides safety and reliability for users. The two companies concluded their test of the blockchain-based B/L system this April. During the test, they transferred ownership of goods with shipments traveling from China to Peru.
In total, the partners have completed five separate pilot shipments, with five Smart Bills of Lading. They departed the port of loading Xingang China on April 5, 2019, and reached the port of discharge, Callao, Peru, on May 26, 2019. The distance between ports is 9,504 nautical miles. The importer received the Smart B/Ls after a couple of minutes.
“G2 Ocean consider smart contracts based on distributed ledgers or blockchain as a unique opportunity to digitalize and automate manual processes between its clients and subcontractors. The Bill of Lading is one of two priority areas in 2019 using blockchain technology. Based on these successful pilots, our next step will be to scale this up and offer it’s as a value-added service to our clients,” Leif Arne Strømmen, Vice President of Innovation G2 Ocean, said.
The solution is powered by the blockchain document transaction system (BDTS) technology. Compared to classic IT systems, the CargoX Smart B/L enables users to state and transfer ownership, create bills of lading, and also attach other accompanying documentation in electronic format.
Documents can be transacted among parties to a specific process in a way similar to a banking transaction. They can also be amended or annulled if needed too. Last year, CargoX completed the official test shipment of a container with its Smart Bill of Lading. The Smart B/L was issued electronically and transferred with the help of a blockchain network.