Building on the TradeLens network connectivity Youredi has provided since 2018, 3PLs, shippers and cargo owners can now use their software integration services to connect quickly and flexibly to the TradeLens platform. The Youredi Integration service, is an offering that integrates seamlessly and easily with a wide variety of TMS, ERPs and other supply chain and logistics applications, whether on premise or cloud-based.
Permissioned data sharing across the maritime industry, improving the speed of data connectivity between different stakeholders, plus the need to digitalize and automate workflow processes has been a pain point for the industry for decades.
Youredi will support BCOs, 3PLs, carriers, freight forwarders, ports and terminals, authorities, customs brokers, and any other stakeholders to connect with the TradeLens platform rapidly with a predictable cost, effort and time commitment. Connecting different stakeholders with the platform will create a more transparent container shipping industry in which all parties can collaborate and trust each other.
The Youredi solution takes care of the data translation, so you can always send and receive data in your preferred data standard or format. The solution can work both with structured (rich data) and unstructured (PDFs, scans, images) data. Whenever required, Youredi can also provide data validation and data enrichment logic.
Like with most businessecosystems, the functioning of global trade relies on efficient exchanges of information, especially of documents. While industries and ecosystems around the world are now digitizing associated processes and automating the bottlenecks, the business ecosystem of global shipping has been slower to realize innovation and digitization.
Supply chain processes require close coordination among many parties and a major choke point in this process is the requesting and finalizing of bills of lading with ocean carriers. There are many situations which cause even the most straight-forward flows to be disrupted and require multiple versions of documents to be created, reviewed and exchanged until final approval and the final bill of lading submission.
TradeLens Workflows utilize blockchain smart contracts to automate and digitize multi-party interactions — this helps drive efficiencies across supply chains. Let’s take a look at each major element to understand what digitizing document workflows looks like for the shipping industry.
Blockchain as the foundation
The foundation of TradeLens Workflows is a permissioned blockchain which guarantees the immutability and traceability of shipping documents and their processes on the platform. This is a very important building block in providing the trust needed to scale.
The permissioned blockchain transforms some of the basic concepts around business networks — contracts, ledgers, transactions, the flow of assets and identity of participants — and introduces the following:
Consensus. Transactions in a blockchain network are first proposed, then consented to by the group, and only then committed to the ledger.
Shared ledger. Trust anchors have an exact copy of the ledger.
Immutability. When a block is committed it is cryptographically secured with previous blocks in the ledger forming an audit log that becomes the foundation of trust.
Accountability: All participants are digitally identifiable, and each blockchain transaction is signed with a permissioned user digital certificate.
TradeLens Document sharing provides a framework for organizing and sharing trade documents related to a host of information such as shipments, consignments and transport equipment. This is all done through permissioned access according to the role of different players and includes security, version control and privacy provisions.
Each trade document is stored on a single stack within the blockchain network, under the control of the operator and accessible only to permissioned parties within a channel. Users can upload, download, view and edit documents as allowed by their permissions and access control on that specific type of document for the trade object in question.
It is important to note, only the hash of a given document is stored on the ledger. The document itself is stored securely where access is granted according to the TradeLens Data Sharing Specification. Each time a document is edited or uploaded, a new version is created and added to the document store. Every version can be verified against a hash of its original submitted content in the ledger.
Blockchain ensures the immutability and auditability of all these documents, promoting trust and alignment across trading partners.
Beyond document sharing
The TradeLens Workflow feature takes thedocument sharing capability one step further. It provides a way to interpret structured documents and take actions on them according to well-defined workflows. In other words, by understanding the purpose and contents of documents we can automate certain actions and notifications in the shipment flow.
As documents are submitted through the TradeLens API or UI, they are interpreted by looking at specific attributes that determine which trade object the document is applicable to, and which actions to perform. The actions are checked against defined rules and only specific actions by specific actors are accepted.
When all requirements are fulfilled, the document is saved and the appropriate action gets recorded as a transaction on the blockchain. Smart contracts ensure the state and progression of a TradeLens Workflow — what can be done at each step, and by which organization or actor.
Our workflows also update generated events to help notify subscribers (members of the supply chain) of the actions and results.
An example of TradeLens Workflow: SI-BL Flow
Let’s talk about a specific TradeLens Workflow — the SI-BL. This variation simplifies the process of sending a shipping instruction (SI) to the ocean carrier and receiving back a verified bill of lading (BL). The TradeLens SI-BL Workflow removes the need to manually edit, amend and transfer these critical documents, accelerating end-to-end flow to achieve a final bill of lading.
When a shipper (or their representative) submits a SI to the TradeLens Platform, it is analyzed by its attributes to determine which consignment it’s related to and which ocean carrier should be notified. Once the carrier has it, a draft BL is submitted back to the platform, the shipper can review and make amendments and share back to the carrier and so on, until a final BL is agreed upon. Because this is an automated process between systems at the shipper and carrier, manual tasks are eliminated along with their inherent delays.
There are many other variations of this flow, but the benefits come from the visibility and increased speed in processing these transactions. Also helpful for shippers, this offers a single mechanism and process for interacting with different ocean carriers with an immutable, shared audit trail for all draft BL revisions and approvals — all recorded on the blockchain ledger.
A digital ecosystem to meet old and new challenges
TradeLens Workflows help connect your ecosystem, drive information sharing and foster collaboration and trust by enabling the digitization and automation of how you work with others.
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.
But for as much as shipping has changed over the decades, not much about the bill of lading (BL) has. Today, it’s pretty much the same often-paper, always-time-consuming document it ever was.
That’s why driving an eBill standard is largely considered the Holy Grail of global trade. Succeed in that, and partners up and down the supply chain would benefit from the days and weeks that paper BLs add to the process as they are printed, pouched, messengered, lost, found and waited upon.
It’s ironic because there isn’t a single aspect of the BL that couldn’t be done better digitally. To demonstrate, let’s dive into the essence of these documents and the challenges that remain to making them digital.
How does an original paper bill of lading work?
Once the vessel departs, an original BL can be issued by the ocean carrier. After the shipper endorses the original bill, it is couriered to the buyer who then needs to surrender it back to the carrier at destination as part of the cargo release process.
It sounds simple enough, but along the way the BL impacts many other processes and actions. Even before issuance, the time-consuming process from a shipping instruction to the issuance of a verified BL, many iterations and changes can occur to get the BL into an approved state.
The BL, and its critical data fields are required for customs clearance, letter of credit, change of title and other processes. One delay in any of these can result in costly extra charges.
The functions of a bill of lading were made to be done electronically
In oftentimes convoluted international shipments, the BL is the legal go-to document that facilitates negotiation, lending and risk reduction by performing three key functions:
1. It is evidence of a contract of carriage
2. It confirms receipt of goods
3. It serves as the title to the goods
So, can eBill perform these functions while maintaining the integrity and legality that’s required? The P&I Clubs think so. Today’s top eBill solutions meet these challenges through rule frameworks and advanced security measures — all while providing significant cost and time savings.
eBills can play a pivotal role — and a digital role
Carriers issue the BL, but they rely on information from shippers which may change multiple times during the booking and shipper’s instruction processes. Electronic features like structured documents make creation, approval, distribution, tracking — everything — easier than paper.
This benefits not only the shippers but the carriers, buyers, sellers and banks without having the need to continue to print out paper — which defeats the purpose
Digital does the different types of bill of lading better
There are many types of BL, reflecting the complexities of international trade. Eliminating paper is only the beginning of the ways eBills can help streamline processes related to the two main categories of BL:
Sea Waybills are sometimes referred to as “Express Release.” They have a named consignee on them but are issued without any original documents that have to be presented for the release of the cargo. Non-negotiable and non-transferable, they are usually used in three cases:
Intra-company shipments between divisions located in different countries
Shipments when no negotiations take place between the seller and the consignee
Instances when the shipper doesn’t have to submit an original BL to any party in order to secure their payment
Original BLs have different forms that all hinge on the issuance of original BL documents in some way.
· Order BLs are the most common type of BL. They enable delivery of the cargo to be made “To Order” to the bonafide holder of the BL. These types of BL are negotiable and often linked to letter of credit transactions. Often banks must verify and endorse the original BL before the cargo can be released to the buyer.
Straight BLs stipulate that the cargo may only be released to the specified consignee and only upon the surrender of an original BL.
Open BLs are negotiable and transferable. The name of the consignee can be changed with the consignee’s signature and transferred — often multiple times.
Going Digital assists in filling out the bill of lading
With shippers providing the majority of the information for a BL, completeness and correctness is crucial. eBills help guide the way. If shippers can provide bill of lading information digitally, there’s less risk of keying errors. Form fields and autofill features all speed the process and lead to time savings.
One of the challenges of going paperless with BLs from the very beginning is standards. Adhering to set data standards makes information useful for different parties within organizations and multiple supply chain partners and it enables seamless workflows from automation. Unfortunately, standards are far from being standard today.
Digital makes the information included in a BL more useful
Users look to the bill of lading as an infallible source of essential and comprehensive information like names and addresses, purchase orders or reference numbers, special delivery instructions, pickup date, description of items, packaging type, NMFC freight class and DOT hazmat designations.
eBills of lading can make this information highly transparent to supply chain partners who can use it. But like many of the benefits of eBills, this transparency hinges on adoption — if all the participants of the supply chain are rowing together digitally, it works. If not, it just makes for another manual process that may end up being even more work than paper.
With its centrality to supply chains and essentiality to digitizing global trade, it’s easy to understand why the industry has its sights set on digitizing this important document. But acceptance of the eBill remains both the goal and the greatest challenge today. That’s why getting the eBill to catch on will require successfully digitizing the entire process for eBills, too.
TradeLens, with its relationships with the world’s largest ocean carriers, is in a unique position to explore the digitization of this process at an unprecedented scale. Within an ecosystem where there’s already widespread acceptance, the potential of the eBill could finally be revealed.
The IBM development is unarguably one of the leading bodies driving global adoption, with the development of a blockchain platform built with flexibility and ability to run on any cloud. The blockchain platform allows upcoming projects to build, operate, govern and grow blockchain solutions across any computing environment through its blockchain technological advancement.
IBM successfully introduced its TradeLens platform in partnership with the Danish transport giant, Maersk in 2018. TradeLens has recorded huge success, partnering with major organizations and government agencies across the world due to its ability to deliver services such as cross border goods shipping at a faster rate.
Blockchain taking the Centre Stage
With blockchain gaining more followers and the adoption race picking up pace, many organizations, countries, agencies, and more seem to be jumping on the blockchain train before they get left behind with IBM blockchain technology in the forefront of delivering products that are needed by upcoming blockchain projects to strive. Recent news coming from Indonesia, revealed that after several months of working towards implementing a new partner on its platforms, the Indonesian Customs and Excise Department have announced that it would make use of IBM TradeLens technology.
Indonesia’s customs department is set to be the 11th government agency to be part of the TradeLens consortium after the realization of the benefit and advantage of making use of the TradeLens platform, other countries whose custom departments have partnered with TradeLens includes Thailand, Canada, Azerbaijan, among others.
The effects of customs agency deploying IBM TradeLens technology
The company’s stated goal is to facilitate faster trade and to eliminate altogether paper-based verification processes thereby paving the way for quicker trade and customs validation
By digitizing the supply chain industry using blockchain, the country stands to boost its production potential by around fifteen percent (15%), which is a substantial figure in an industry driven by extremely thin margins
The president/director of IBM Indonesia, Tan Wijaya is optimistic that the partnership with Indonesia’s custom departments will be beneficial to all stakeholders in the entire logistics ecosystem and it will encourage the overall modernization of trade.
The company’s stated goal is to facilitate faster trade and customs verification and eliminate paper-based processes which are in line with Indonesia’s custom and excise service.
As TradeLens continues to onboard new projects and partnership with other organizations, its platforms which allows supply chain data to be immutably tracked and broadcasted using a permissioned blockchain. The company’s highlighted objectives are to facilitate faster trade and customs verification and also to eliminate completely the strenuous paper-based procedures. Other constraints include the inability to provide a comprehensive risk assessment, complex promotion, inefficient and expensive stakeholder communication, and lack of transparency.
IBM initially launched TradeLens in partnership with Danish transport conglomerate Maersk during August, 2018. Earlier this month, Maersk estimated that approximately 10 million supply chain events are being tracked on TradeLens each week which points to how successful the platform is turning out to become.
Early February, The United States Federal Maritime Commission granted an antitrust exemption to five US-based members of the TradeLens consortium to be able to share data in regards to American supply chain events with the agreements between the five (5) parties coming into effect on 6th February,2020.
Regulators from Indonesia embrace Blockchain
It is worth noting that TradeLens Partnership with Indonesian custom authorities is not the first venture of the country’s positive nature towards the adoption of blockchain and its technologies.
The recent partnership announcements between TradeLens and Indonesia customs departments comes three weeks after Indonesia’s oldest cryptocurrency exchange, Indodax formerly known as bitcoin.co.id, received full license from the country’s Commodity Futures Trading Regulatory Agency (BAPPEBTI) to operate in the country.
This and other partnerships of blockchain projects in Indonesia shows that the country is primed and set to grow along with the new blockchain technologies.
In August of 2019, both the United States and Thailand announced their plans to test blockchain applications for tracking and managing shipments. The U.S. Customs and Border Protection (CBP) is planning to test a blockchain application against their current system to determine how distributed ledger technology (DLT) can improve its existing processes. Thailand, on the other hand, plans to use IBM’s blockchain-based logistics platform Tradelens to improve customs processes such as data sharing.
Originally developed in a joint venture between IBM and logistics giant Maersk, Tradelens seeks to streamline processes in the global shipping industry by making the flow of information occur in real-time. The blockchain platform is reported to currently process about half of the world’s shipping data.
These moves highlight countries’ increasing interest in employing blockchain technology in their customs and border operations. The Tradelens website says its ecosystem comprises over 100 different organizations including carriers, ports, terminal operators, third-party logistics firms, and freight forwarders. More specifically, a map on the Tradelens website suggests that about 60 ports and terminals worldwide are directly integrated with TradeLens.
Elsewhere, the Directorate-General for Taxation and Customs Union (TAXUD), which develops policies and operational systems for the European Customs Union, explored the applicability of blockchain in customs and taxation with a focus on utilizing blockchain as a notarization service.
The Union is looking into using blockchain to digitize ATA Carnet, an international customs document used in 87 countries for temporarily admitting goods duty-free. A pilot project conducted in collaboration with the International Chamber of Commerce World Chambers Federation (ICC WCF), was successfully tested in 2018.
The ICC WCF, a body of the ICC that helps facilitate mutually beneficial partnerships between ICC members, has been working with different customs authorities to develop solutions for converting ATA Carnets into electronic documents.
About 80 countries around the world have developed authorized economic operator (AEO) programs and signed a mutual recognition agreement (MRA), all in an effort to streamline cargo security. Under such arrangements, individual countries identify and approve trustworthy logistics operators that pose a low risk in security and share the approval information with participating countries.
This allows countries to piggyback on the security checks of other countries to make customs operations more efficient. However, a few problems have arisen with the program.
There are information leakage risks associated with the conventional way of sharing AEO data by email. While a sender’s email server may be encrypted, there is no guarantee that the receiver’s is as well, and vice versa.
Data sharing is not real-time, but monthly or at an agreed-upon interval. This limits the speed at which information on new or suspended AEOs can reach all participants.
To avoid the aforementioned problems as well as achieve additional time and cost savings on security procedures, customs administrations in Mexico, Peru and Costa Rica are working with the Inter-American Development Bank to develop a blockchain application called Cadena.
The move by governments around the world to employ blockchain to improve cross-border trade marks a step toward paperless customs processes, which originally began with the digitization of information flows by making trade-related data and documents available and exchangeable electronically. For all the improvements they’ve brought to paper-heavy processes, traditional electronic data exchange systems still face the challenges of authenticity and the unavailability of real-time data exchange.
For instance, the Netherlands and China launched a five-year project in 2010 to test the applicability of electronic sanitary and phytosanitary (SPS) certificates. A World Economic Forum white paper titled “Paperless Trading: How Does It Impact the Trade System?” noted that concerns around the authenticity of the electronic documents arose. This necessitated the adoption of electronic signature systems and a whole new legal framework that recognized the electronic signature.
Still, the entire process requires longer procedures and the introduction of new types of intermediaries — e-signature providers, for instance. Moreover, low-income countries, the trade costs of which remain high compared to high-income countries as according to World Bank data, may not have the budget to implement several new systems for data and document digitization. They still need to invest in better customs infrastructure.
Blockchain, on the other hand, if implemented in border protection, will ensure real-time availability and immutability of customs documents while saving considerable costs on excessive paperwork.
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.