Category / Blockchain

by Mike Poverello

WCO News – First Edition 2022

WCO News features an article by the Secretariat on the WCO Data Model – the common language for border management-related processes which enable information to flow seamlessly across different IT systems. The article focuses on the latest data requirements and processes which have been included in the Model through collaboration with stakeholders in the maritime, food safety, waste management and postal sectors. In addition, it offers some practical guidance to Customs administrations which are considering adopting the Model and calls on economic operators to use it in their commercial processes also, as it covers some of the data elements found in commercial documents such as the invoice, packing list and bill of lading.

This is followed by an article by the Botswana Unified Revenue Service (BURS) introducing various projects dealing with the collection, analysis and sharing of data. The author also emphasizes that a culture of innovation has emerged within BURS, and that the working environment supports creative thinking and the generation of new or improved products, services and processes.

The third article presents the results of, and lessons learned from, the first International Survey on Customs Administration (ISOCA), which was co-managed by the WCO and the IMF with the aim of collecting quantitative and qualitative data on Customs administrations and enabling comparisons to be made between countries that share common features. A higher number of participants is required for the Survey to provide a global view of the roles played by Customs administrations, and of their practices. I hope more administrations will participate in future editions of the Survey, which will be simplified to strike a better balance between the need for accurate data and the burden of data collection.

In the next article, Dominican Republic Customs introduces the tools it has developed to measure the time required to release goods and support the Government’s Release in 24 Hours (D24H) Programme, whose objective is to turn the Dominican Republic into the logistics epicenter “par excellence” of the Caribbean region.

A further article takes us to Niger, where the Customs Administration recently financed a study into the use of satellite imagery to analyze cross-border trade flows. The article presents the information collected and explains how it will be used to reorganize operational services and provide efficient links within the territory.

The final article in this Dossier sheds light on the need for harmonization in the digitization of trade documents. This article by the ICC introduces the ICC’s Digital Standards Initiative (DSI), a collaborative cross-industry effort to advance the digitization of trade globally through the adoption of a set of standards.

Many other articles published in this edition of the WCO News directly or indirectly touch on data and on the role that information technology plays in making us more efficient. And this is true of all the editions of our magazine. You have heard or read it many times: in today’s world, it’s all about data. Data is strategic, and we all stand to gain by sharing experience and expertise on how best to manage it in a holistic way.

Source: WCOOMD, March 2022

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by Mike Poverello

Global Supply Chains Making a Huge Bet on Blockchain

System Shock: The $50 Trillion Industry Making a Huge Bet on Blockchain

Blockchain may one day eliminate inefficiencies and lack of transparency in supply chains. While slow in coming, this revolution would benefit not only customers and brands, but the “invisible” workers who power global trade.

In this episode of Bloomberg’s System Shock, we explore how cumbersome, paperwork-bound supply chains—like one stretching from kitchen refrigerators in Europe and the U.S. all the way back to a small farmer in Ecuador—are being transformed by that most modern of technologies.

Source: Bloomberg, System Shock, Gloria Kurnik, 26 January 2022

by Mike Poverello

Pakistan Customs Joins TradeLens

By joining the blockchain-underpinned platform TradeLens, Pakistan Single Window is supporting Customs in modernizing its import-export documentation through a safe & secure, paperless, digital solution to strengthen its controls against trade-based money laundering.

On 20 December 2021, On behalf of Pakistan Customs, the Pakistan Single Window Company today signed an agreement with TradeLens, a blockchain-underpinned logistics platform supported by 5 of the 6 largest ocean carriers globally, to digitize import-export documentation of the containerized cargo moving in and out of the country. Pakistan’s international trade ecosystem is being rapidly transformed through the introduction of technology driven initiatives led by the Pakistan Single Window and the country’s authorities recognize the potential benefits of digitizing supply chains for efficiencies, enhanced transparency, and data-driven decision making.

Advisor to the Prime Minister on Finance and Revenue Mr. Shaukat Tarin added, “Joining the TradeLens platform is allowing us to enhance our ecosystem in a way that all the involved stakeholders get access to a transparent and secure platform that makes processes more efficient.”

Cross-border containerized supply chains are some of the largest and most complex business ecosystems in the world today. It is not uncommon for 30 independent parties, 100 people and up to 200 exchanges of information to be connected to a single shipment. With increased complexity comes increased cost. Shippers or beneficial cargo owners (BCOs) need consistent, auditable and immutable data from multiple sources to effectively manage their supply chains.

The authorization to sign the collaboration came from the PSW Governing Council chaired by Mr. Shaukat Tarin. The Chief Executive Officer of PSW Aftab Haider formally signed the agreement with Irtaza Hussain, the Regional Head of Network for TradeLens at IBM.

PSW integration with TradeLens will help Pakistan Customs and other trade regulators to improve their operational efficiency and create value through the blockchain platform. The immutability of Blockchain-underpinned document information is important in the identification of illegal activities, as well as, improving the smooth operation of legal trade.

Marvin Erdly, Head of TradeLens at IBM. commented “The growth of the TradeLens’ network is evidence that participants from all across the supply chain ecosystem can derive significant value through digital collaboration.  Pakistan now joins an increasing number of connected Customs Authorities on the TradeLens platform exploring innovative solutions to enhance global trade access and enhance process efficiencies for all involved”.  

TradeLens is a neutral platform brings together data from the entire global supply chain ecosystem including shippers and cargo owners, 3PLs and freight forwarders, intermodal operators, customs and government authorities, ports and terminals, and several ocean carriers. This data allows TradeLens and its network partners to modernize manual and paper-based documents by replacing them with blockchain-enabled digital solutions. It also allows the network partners to provide their customers with deeper visibility into the entire journey for their cargo from origin to destination and reduce uncertainty allowing for better planning and reduced inventory costs. TradeLens welcomed it’s first network member in Pakistan, Al-Hamd International Container Terminal, earlier this year.  

Source: TradeLens, 28 December 2021

by Mike Poverello

International Customs Day 2022

The WCO dedicates 2022 to the Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem

Traditionally, every year, the Customs community comes together on 26 January to mark International Customs Day. This day of celebration is a unique opportunity for WCO Members, the WCO Secretariat and global Customs’ partners to reflect on a particular theme and to act upon it. 

Thus, throughout 2022, under the slogan “Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem”, the Customs community will be focusing on how to operate in a fully digital environment and create an operating model that captures and exploits data from across the trade ecosystem.

Over the years, digital technology has evolved rapidly and Customs can now tap into data from other government agencies, commercially available databases, and open-source information platforms such as digitized global public records and multilingual news sources. 

The extent to which data can be used effectively depends on various factors surrounding data ethics, including privacy, commercial secrecy and legal issues regarding the use of data by Customs and Tax administrations, and the importance assigned to innovation in public administrations. 

To build data ecosystems, or consolidate existing ones, the following enabling actions may be considered:

  • establishing formal data governance to ensure the relevance, accuracy and timeliness of data;
  • making use of the standards developed by the WCO and other institutions regarding data format and data exchange;
  • providing appropriate management of data to ensure that the right people have access to the right data, and that data protection regulations are respected; and,
  • adopting progressive approaches, such as data analytics, to collect and successfully exploit data to drive decision-making.

A robust data culture empowers people to ask questions, challenge ideas and rely on detailed insights, not just intuition or instinct, to make decisions.

In order to nurture a data-driven culture, administrations need to enhance the data-literacy of their staff – in other words, their ability to interpret and analyze data accurately. 

Customs administrations should integrate data science into their curriculums for newly recruited officers and participate in the development of distance learning courses to familiarize Customs officers with the collection and analysis of data in order to forge a data-driven culture. Staff also need to understand the bigger picture, namely the impact of Customs on the effective protection of society, trade facilitation and fair revenue collection. 

On the other hand, Customs administrations are invited to consider leveraging data in their relationships with other actors along the supply chain, as well as making data available to the public and academia as a means of enhancing transparency, stimulating the production of knowledge and enabling dialogue with civil society.

Sharing data analysis with other government agencies increases the role and visibility of Customs in policy-making and in obtaining necessary resources, including donor funding. Disseminating Customs data and information in society is part of governments’ response to the general demand for open governance.

To support Customs administrations, the WCO Secretariat has placed data-related topics on the agendas of several committees and working groups, organized awareness-raising seminars, developed e-learning modules, drafted a Capacity Building Framework for Data Analytics which was adopted by the WCO Council in December 2020, issued practical publications and published articles in the WCO News Magazine.

Moreover, a community of experts has been established, under the name of BACUDA (BAnd of CUstoms Data Analysts), which brings together Customs and data scientists with the objective of developing data analytics methodologies. 

The Secretariat will continue to investigate ways to collect and share data on Customs administrations with a view to enhancing the way it delivers capacity building, and will continue to undertake data-driven assessments and work with international experts to respond to assistance requests.

More measures will be presented in the WCO Data Strategy that the WCO Secretariat is currently working on. The ambition will be to make data a vernacular language among Customs administrations and between the WCO Secretariat and WCO Members. The road ahead is not an easy one, there will inevitably be challenges along the way, but as we have learned during the COVID-19 pandemic, the Customs community is united, stronger and more resilient in the face of adversity. 

Dr. Kunio Mikuriya

WCO Secretary General

26 January 2022

by Mike Poverello

Peroni beer deploys blockchain for batch traceability

Italian beer brand Birra Peroni has started using EY’s blockchain platform for the purposes of supply chain traceability.

EY has said that the beer company will be using its EY OpsChain Traceability on the public Ethereum blockchain, with each batch having its own non-fungible token (NFT) – a unique, digital certificate of ownership.

Each NFT is recorded on the blockchain, digital ledger distributed around lots of different users instead of held centrally, with each transaction – for example as a product moves through the supply chain or is paid for – time stamped and encrypted to prevent tampering.

In simple terms, it is a technology to store and exchange information within a group in a secure, trustworthy, and efficient manner that doesn’t rely on the use of a database.

NFTs are becoming increasingly used to “tokenise” and confer ownership on physical and virtual goods – including fine art, collectibles and even the first-ever tweet by Twitter founder Jack Dorsey.

However, the technology is also being deployed to protect goods from counterfeiting and as a traceability tool for consumers who are increasingly demanding that the products they buy are made using sustainable and ethical ingredients.

Peroni – part of Japan’s Asahi Group – said using the technology will be a step forward in bringing visibility and transparency to its supply chain, for both consumers and supply chain partners.

“For Birra Peroni, the bond with the agricultural supply chain and the quality of our 100 per cent made-in-Italy malt are fundamental strategic assets,” commented Federico Sannella, the company’s corporate affairs director.

“We believe that sustainability is deeply related to the respect for the raw material, and we wanted to bring this value alive to our consumers, allowing them to follow the journey of the malt from the field to the bottle,” he added.

It’s not the first brewer to take this approach. AB InBev, which sells brands like Budweiser and Stella Artois, is running a blockchain pilot in Europe to give consumers a view of its barley supply chain via a QR code on the packaging.

by Mike Poverello

Brazil launches national AI strategy

Brazil has launched a new artificial intelligence (AI) strategy, which aims to balance ethical use of the technology while boosting research and innovation in the sector.

Following a public consultation, which ran from December 2019 to March 2020, the strategy sets out six objectives. These include to: develop ethical principles that guide responsible use of AI; remove barriers to innovation; improve collaboration between government, the private sector and researchers; develop AI skills; promote investment in technologies; and advance Brazilian tech overseas.

Since Canada became the first country to adopt a national AI strategy in 2017, other governments have raced to develop policies that will reap the benefits of AI while curbing its harms. The OECD now tracks over 60 countries’ AI policy frameworks.

Brazil’s strategy notes that the state needs to encourage entrepreneurship in the sector. “In 2019, while the US invested US$224 million in AI startups, and China US$45 million, Brazil invested only $1 million,” it said.

Trust and ethics

Brazil has adopted the OECD’s five principles for responsible AI: inclusive growth, sustainable development and wellbeing; human-centered values and equity; transparency and responsible disclosure; robustness, security and safety; and accountability.

The strategy is organised into nine pillars or axes. The first pillar – “legislation, regulation, and ethical use” – is thematic and ensures that human rights are safeguarded and that strong regulatory frameworks are established. This includes a commitment to build ethical requirements into tenders for AI-driven solutions.

Another pillar – “qualifications for a digital future” – aims to “prepare current and future generations to cope with the changes and impacts of AI”. The strategy proposes a national digital literacy programme for students, and tech training for teachers, for example.

And a third pillar focuses on how AI can be applied to government for the benefit of citizens, including a commitment to implement AI in at least 12 of Brazil’s federal public services by 2022.

Big opportunities

The strategy is also ambitious about the possible commercial benefits of doubling down on AI.

One pillar of the strategy, for example, aims to identify productive sectors — such as financial services and the law — and applications, where AI would benefit to industry. It proposes fostering links between AI start-ups and SMEs.

And another pillar – “research, development, innovation and entrepreneurship” – points out that Brazil has a good national distribution of AI experts and practitioners, but that they mostly work in academia or the public sector, rather than in private tech firms.

Source: Global Government Forum, article by Josh Lowe, 13 April 2021

by Mike Poverello

Blockchain – introducing Customs to the Global Supply Chain, earlier

Picture: Dadiani Fine Art

Customs authorities are age-old institutions whose missions have been subject to numerous changes over time. Historically, the main role was to levy customs duties, which, in other words meant collecting resources for the benefit of local authorities. Today, customs performs many other functions, from securing national borders, recording import and export trade and prevention of fraud and illegal trade activity.

From the customs authority’s perspective, there is a constant focus on finding innovative technology and new methods and techniques to become more effective on risk assessment and inspection of the goods circulating across their borders. At the same time, customs authorities must examine the consequences these changes will have on trade, avoiding the creation of additional burden and obstacles for industries and entities involved in the exchange. Adopting flexible technology is often key for meaningful strategic transformations.

More quality data with accuracy and speed

Each country has its own policies for operating border control when goods arrive or depart from their territory. Most of these policies work from systems built off a central repository, powered by data collected from different sources. Time and effort are often spent in sorting and cleansing data from these various sources but disconsonant data can still create confusing outcomes when analyzed.

While globalization gives an incentive to operate in an open market, the increased amount of trade activity also conceals illicit activities that must be supervised by customs authorities, such as tax evasion, drug traffic or smuggling. It is in the best interest of the entire industry to cooperate, allowing data sharing to flag the early recognition of risky trade transactions.

Receiving data related to the supply chain activities prior to and during the transportation process can assist authorities, supporting them to pinpoint risky elements on international trade. Data validation across various trade and transportation documents allows authorities to manage detailed risk assessment processes and is enhanced with access to earlier and more granular information.

Providing government authorities with access to upstream transport data is one of the features of TradeLens. On the platform, customs authorities have access to data related to their countries from the moment a booking is placed with a carrier. Updates on documents from different data sources and transportation milestones are shared in near real-time.

Additional data is not only a way to make sure that accurate risk assessments are being made, but it can also help decrease the burden placed by the bureaucracy related to importing or exporting goods. Increasing the accuracy of the inspection of goods, can enable authorities to focus their resources on the most important targets and improve trade documentation processing for reliable shippers, truckers and carriers. Enhancing global trade and the upstream exchange of information can drive growth and prosperity for the entire ecosystem.

Doing more with less

While many technologies and platforms exist in the marketplace, organizations are often constrained by limited public resources that must be utilized wisely. TradeLens does not aim at replacing existing systems but enhancing them with additional data from the supply chain. The TradeLens Platform provides a forum for authorities to run pilots and test innovative solutions in a true end-to-end shipment lifecycle.

In order to contribute to the logistics operations of the entire ecosystem, customs authorities can send notifications related to their inspection and release activities to TradeLens. This information will be made available in near real-time to all the players involved in the shipment and permissioned to see the data.

Several countries have already started using TradeLens to improve their access to valuable information that will in turn support their mission goals:Indonesia, Ukraine, Saudi Arabia, Thailand, Jordan and Azerbaijan.

Source: TradeLens, 28 May 2020

by Mike Poverello

CargoSmart – Pilots Innovative Cargo Release Application in Shanghai

CargoSmart Limited, a leading shipment management technology solutions provider, announced that it conducted a pilot project with COSCO SHIPPING LINES (COSCO), Shanghai International Port Group (SIPG), and Tesla, Inc. (Tesla) for a new application to transform the cargo release process. It is among the first pilot projects with an ocean carrier conducting a real-time exchange of shipment data with a terminal operator through blockchain. The pilot not only demonstrated the benefits of having a single, trusted source of truth in cargo documentation, but also the efficiency gains for industry participants. Such an application will undoubtedly accelerate the digitalization of shipping industry processes and the further optimization of currently stressed global supply chains. The application will be further developed for participants of the Global Shipping Business Network (GSBN) blockchain consortium, once it is officially established. 

The pilot project was designed to minimize consignee and shipping agent verification steps with their ocean carriers in order to speed up the release of sea waybills. As a result, truckers are able to pick up their cargo at the terminal faster, helping shippers meet delivery windows and ensure that service quality and customer commitments are met. 

During the pilot in December 2019, COSCO and SIPG streamlined the cargo release process by enabling Tesla to accelerate its cargo pick up procedures on a trusted and secure platform (related post on COSCO’s official WeChat account). The pilot also allowed SIPG to view a single, trusted source of COSCO’s sea waybill data, enabling faster preparation of delivery orders for consignees and their shipping agents. In late March 2020, CargoSmart further enhanced the application to display laden gate out, appointment date, and terminal release, enabling shippers to have better visibility of their cargoes. 

Henry Huang, Executive DGM of Operation & Business Department of 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. We look forward to extending the collaboration with more supply chain stakeholders to render extraordinary service to our community.”  

Wu Yu, General Manager of Business Process & System Division of COSCO said, “The pilot with SIPG and CargoSmart showcased significant efficiency gains not only in the cargo release process, but also for downstream supply chain planning by presenting a single source of truth for documentation for all involved parties. We look forward to more blockchain-based applications that can create value for customers and the industry alike.”  

Expanding Value to More Carriers and Terminals 

The successful pilot has proven that the unique collaboration model between ocean carriers and terminal operators is able to create benefits for stakeholders along the global supply chain. Leveraging this successful experience, the cargo release application is expected to further promote carrier-terminal data exchange and streamline operations. It is envisaged that this application will unleash the full potential of the proposed GSBN platform once it is established, subject to the requisite regulatory approvals. 

As preparations continue for the future formation of the GSBN, contingent upon securing required regulatory approvals, CargoSmart will conduct similar pilots with Xiamen Ocean Gate Container Terminal Co., Ltd. (XOCT) and other terminal operators such as those at the Port of Qingdao in China and the Port of Laem Chabang in Thailand.  The objective is to broaden the scope of the pilot by involving more carriers and terminals, and eventually extending the pilot to other industry participants in the near future. To further enhance the value of the pilot application, CargoSmart will enable APIs to explore and test ways to extend visibility to shippers for greater efficiencies throughout the cargo release process. 

Source: CargoSmart.ai, 7 April 2020

by Mike Poverello

WCO News – October 2018

wco_news_87

Another feature filled WCO News e-publication featuring Blockchain big time!

by Mike Poverello

WCO – Blockchain for Customs

WCO-Unveiling the Potential of Blockchain in CustomsThe World Customs Organization (WCO) has initiated work to identify possible case studies and uses of blockchain for Customs and other border agencies with a view to improving compliance, trade facilitation, and fraud detection (including curbing of illicit trade through the misuse of blockchains and Bitcoins), while touching on associated adjustments in legal and regulatory frameworks.

The objective of this research paper is to discuss ways in which Customs could leverage the power of blockchain and the extent to which the future of Customs could be shaped by the use of blockchain-based applications. Blockchain projects are currently in the beta testing phase in the finance sector (facilitating inter-banking system processes), insurance sector (preventing fraud and accelerating coverage) and international trade. With regard to the latter, this paper focuses its attention on two initiatives.

  • The first was launched by MAERSK-IBM as a global trade digitalization platform to which Customs administrations are expected to join.
  • A second initiative consists of an “information highway”, joining the National Trade Platform of Singapore and the Trade Finance Platform of Hong Kong, with a view to creating a Global Trade Connectivity Network (GTCN).

A conclusion that has been reached after discussion is that Customs would be able to have a broader and clearer picture of international trade particularly in terms of the movement of cargoes and consignments as being tied with the flow of capital. With blockchain-based applications, therefore, Customs could become a full-fledged border regulator with greater capabilities in the future.

Source: WCO, Y.Okazaki, June 2018

 

by Mike Poverello

Trade Lens – Maersk and IBM implement their jointly developed blockchain-based solution

TradeLens

Maersk and IBM have introduced their global blockchain solution TradeLens, with 94 organizations already participating. The companies announced their joint venture in January this year after collaborating on the concept since 2016.

Early adopters include more than 20 port and terminal operators across the globe, including PSA Singapore, International Container Terminal Services Inc, Patrick Terminals, Modern Terminals in Hong Kong, Port of Halifax, Port of Rotterdam, Port of Bilbao, PortConnect, PortBase and terminal operators Holt Logistics at the Port of Philadelphia. They join the global APM Terminals’ network in piloting the solution at over 230 marine gateways worldwide.

Pacific International Lines has joined Maersk Line and Hamburg Süd as global container carriers participating. Customs authorities in the Netherlands, Saudi Arabia, Singapore, Australia and Peru are participating, along with customs brokers Ransa and Güler & Dinamik.

Participation among beneficial cargo owners has grown to include Torre Blanca / Camposol and Umit Bisiklet. Freight forwarders, transportation and logistics companies including Agility, CEVA Logistics, DAMCO, Kotahi, PLH Trucking Company, Ancotrans and WorldWide Alliance.

TradeLens uses IBM Blockchain technology built on open standards to establish a single shared view of a transaction without compromising details, privacy or confidentiality. Shippers, shipping lines, freight forwarders, port and terminal operators, inland transportation and customs authorities can interact via real-time access to shipping data ad shipping documents, including IoT and sensor data ranging from temperature control to container weight.

Using blockchain smart contracts, TradeLens enables digital collaboration across the multiple parties involved in international trade. The trade document module, released under a beta program and called ClearWay, enables importers/exporters, customs brokers, trusted third parties such as Customs, other government agencies, and NGOs to collaborate in cross-organizational business processes and information exchanges, all backed by a secure, non-repudiable audit trail.

During a 12-month trial, Maersk and IBM worked with dozens of partners to identify opportunities to prevent delays caused by documentation errors and information delays. One example demonstrated how TradeLens can reduce the transit time of a shipment of packaging materials to a production line in the U.S. by 40 percent, avoiding thousands of dollars in cost.

Through better visibility and more efficient means of communicating, some supply chain participants estimate they could reduce the steps taken to answer basic operational questions such as “where is my container” from 10 steps and five people to, with TradeLens, one step and one person.

More than 154 million shipping events have been captured on the platform, including data such as arrival times of vessels and container “gate-in,” and documents such as customs releases, commercial invoices and bills of lading. This data is growing at a rate of close to one million events per day.

TradeLens is expected to be fully commercially available by the end of this year.

Source: Maritime Executive, original article published 2018-08-09

by Mike Poverello

Australia – Blockchain-based Trade Community System

Trade Community System - Brisbane - DashboardA new Trade Community System (TCS) that will function as a free to access portal bringing together existing data on container shipments is the result of a collaboration between PwC Australia, the Australian Chamber of Commerce and Industry, and the Port of Brisbane.

The goal of the TCS is to link existing supply chain information in disparate systems through blockchain technology, and in the process “revolutionise international trade by removing complexity”.

The developers of TCS noted that one shipment to or from Australia today generates as many as 190 documents and 7,5000 data fields, much of which is duplicating data for different systems, and there is no ability currently to track containers on end to end journeys.

TCS aims to address this with a “National platform that links rather than replaces existing systems, provides end to end visibility and foresight of impediments such as delays and incorrect information, and is permissioned”. All documents, approvals and other requirements would be linked to a single shipment or container number as hashes on a blockchain that supports the TCS system, or stored in an off-chain graph database.

TCS - Brisbane

The developers stressed that TCS “augments, not replaces the systems that are already part of Australia’s supply chains”. Users would access the TCS directly through a web portal or indirectly through their existing systems, and at no upfront cost. “Users are not charged to use the platform or access data about the goods they are managing. Revenue comes from the productivity and service innovations that the data unleashes,” the developers stated.

Speaking at the launch of a proof of concept Trade Community System digital application in Brisbane, Port of Brisbane CEO, Roy Cummins said: “To drive new efficiency gains, industry leaders need to develop mechanisms which facilitate the integration and interoperability of commercial operators across the supply chain and logistics sector”.

This is the goal of the TCS. “The Trade Community System proof of concept is the first stage in building an innovative end-to-end supply chain that will digitise the flow of trading information, improve connectivity for supply chain participants, reduce friction for business and reduce supply chain costs, providing unprecedented productivity gains for Australia’s international businesses,” PwC Partner, Ben Lannan added.

For the Chamber of Commerce and Industry, TCS is an important step in reducing the cost of doing business. “As a trading nation, Australia relies on efficient and effective international supply chains to drive its economic engine room,” said Australian Chamber Director of Trade and International Affairs, Bryan Clark. “At present the current inefficiency across Australian supply chains has added to the cost of doing business, creating up to $450 in excess costs per container. This doesn’t just represent in excess of $1bn in value lost, but goes to the heart of Australian commodity trade viability when it gets priced out of the competitive global market”.

Check out the video – https://vimeo.com/262332930

Source: WorldCargoNews, Editorial, 30 May 2018

 

 

by Mike Poverello

Korea Customs Adopts Blockchain Based Clearance for Fraud and Smuggling Prevention

Korea Customs Service logoThe Korea Customs Service (KCS) has developed a customs clearing system powered by blockchain technology and artificial intelligence to prevent fraud and smuggling in South Korea and is enlisting importers and exporters to try out the new system.

The initiative is a response to a huge import/export and e-commerce boom in the country. The commissioner of the Korea Customs Service (KCS) Kim Yung-moon said back in March: “Adopting new technologies to respond to the ‘fourth industrial revolution’ is an overriding agenda for us as trade form is becoming more complicated.”

The blockchain-based customs clearance platform has enlisted five groups and over 50 exporters as well as five working groups and ten Singapore- and Vietnam-based importers for the test-run.

Improving Certificates of Origin

According to KCS, the volume of trade transactions involving imports and exports in South Korea grew eight-fold from 3 million to 27 million from 1990 to 2017. The new volumes call for improved efficiency in customs clearing. The new blockchain-based data analysis center is expected to increase accuracy and timeliness as well as helping to identify contraband and improve the issuance of Certificates of Origin (CO). A Certificate of Origin is a standard requirement in the shipping industry that contains information about a product’s country of origin and destination and helps to determine the product’s categorization for import tariffs.

The system will use X-rays powered by artificial intelligence to screen and examine high-risk items. It will use blockchain technology to run information networks to connect nodes on the supply chain and to share real-time information that will help in preventing cross-border fraud.

Should everything go according to plan, the Korea Customs Service (KCS) will eventually apply the technology to all its other services. The outcomes of the test will be laid bare this coming Tuesday at Seoul’s central customs office.

Source: Bitrates.com, article by Tom Nyarunda, 14 May 2018

by Mike Poverello

e-Certificates of Origin – Blockchain Platform Launched

blockchain-z

The world’s first blockchain-based platform for electronic certificates of origin (eCOs) was unveiled in Singapore on Tuesday.

The platform is the result of a partnership between the Singapore International Chamber of Commerce  (SICC) and Singapore-based vCargo Cloud. As the first chamber in the world to implement blockchain-based eCOs, SICC seeks to provide its members and trade-related agencies, including trade financing and insurance firms, with a system that offers higher security, efficiency and flexibility. The platform aims to vastly improve transparency, security and efficiency in authenticating trade documents. It permits instant verification of eCOs and runs on a private blockchain network that prevents fraud, alterations and third-party interference.

SICC says the platform represents a quantum leap in processing trade-related documents by hosting information of trade transactions on a tamper-proof distributed ledger system, which can be authenticated and accessed by various stakeholders of the platform. The platform uses QR codes, allowing eCOs to be scanned using smart phones and then printed. The number of allowable prints is restricted to prevent unauthorized duplicates. This improves efficiency and minimizes the costs of verifying COs, removing a major impediment in the process and a frequent cause of high insurance or trade finance costs.

vCargo Cloud intends to leverage on the Singapore launch to promote the platform globally, beginning with Asian countries that are substantive manufacturing exporters such as Japan, Myanmar and Sri Lanka, using a pay-per-use model.

The launch of the blockchain-based eCO platform comes amidst the Singapore Government’s call for a Self-Certification regime through the ASEAN Single Window, which aims to expedite freight clearance and reduce manual paperwork across all 10 member countries.

eCo

Source: Maritime Executive, original article published 8 May 2018.

by Mike Poverello

CargoX – World’s First Blockchain Bill of Lading

CargoX

Hong Kong-based CargoX raised $7 million through an initial coin offering to build its smart contract-based house bill of lading solution. CargoX, has designs on developing so-called smart contracts to transfer house bills of lading onto a blockchain solution it is building. House bills of lading are issues by non-vessel-operating common carriers (NVOs).

The coins, also called tokens, can be used to pay for CargoX’s smart contract solutions, but those interested in the blockchain-backed bill of lading solution can also pay with traditional currencies.

“Our platform will support all the legacy payment options with fiat money, but as we are a startup based on blockchain technologies, we are working on implementing cryptocurrency payment as well,” said CargoX founder Stefan Kukman. “There will be various service levels supported, and there will be additional features and services provided to holders and users of our CXO utility tokens.”

The ICO serves two purposes in this application. It helps CargoX raise funds as opposed to seeking venture capital investment, but the coins can also be used to transact within the solution. So, the sale of the CXO tokens is ancillary to the product offering.

That’s different from another crypto-token liner shipping model that emerged in the second half of 2017 called 300Cubits. That company issued tokens, called TEUs, to underpin a solution that would penalize shippers and carriers for no-show or overbooking behavior.

CargoX, meanwhile, said it wants to be a neutral platform for global trade documentation and is starting with the bill of lading approach. The solution comprises an app, a document exchange protocol, and a governing body, which is currently being established.

“The next step is to demonstrate the viability of our platform with a test shipment,” Kukman said.

That pilot, scheduled for the second quarter of 2018, links a logistics company with its clients on a shipment from Asia to Europe.

“Technology companies often lack the shipping and logistics expertise necessary to break into this industry,” Kukman said. “On the other hand, logistics companies venturing into the tech field may be held back by their reliance on established, old-school business practices.”

To register, CargoX collects “know your customer” and NVO license information “to establish roles and permissions on the platform.”

“Once companies register, they will receive their public and private key for signing the Smart B/Ls. This can be done in the Smart B/L distributed application provided by CargoX, or with the help of the CargoX Smart B/L API (application programming interface) integrated into the company’s system.”

That integration can take a few hours or weeks, depending on the workflow of the company, CargoX said.

The ultimate goal of bringing bills of lading to the blockchain solution is to create a common, encrypted repository of data. The secondary benefit of that process would be the potential to eliminate bank-backed letters of credit for suppliers, as the smart contract would automatically trigger payment.

“The shipping industry currently wastes billions of dollars on spending related to letters of credit, which are used in global trade as a payment guarantees,” Kukman said.

In terms of how the blockchain-backed bill of lading would function in practice, Kukman said that data will be encrypted and stored in a decentralized storage application.

“These are much safer than centralized storage, as they use the same blockchain security mechanisms as the billions of dollars worth of cryptocurrencies such as bitcoin currently in circulation,” he said. “Actual ownership (of the document) will be traded (sent) in the same way people send tokens today, from one wallet to another.”

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Source: American Shipper, E, Johnson, 14 February 2014