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Oranges on the blockchain: Doc transfer time cut from 1 week to 1 second

Posted: 4 February 2019 12:09 pm
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A new blockchain shipping trial is bringing auspicious results.

A new pilot has put 28 tons of mandarin oranges on the blockchain in time for Chinese New Year, with Pacific International Lines (PIL) using an IBM TradeLens-compatible blockchain system to track the shipment in real time.

One of the most significant efficiency gains from the system was reducing the amount of time taken to transfer a bill of lading from up to seven days to just one second.

That's more than a 60,000% improvement.

Problems and solutions

The bill of lading is a document typically issued by a shipping company to document a shipment. It functions as a receipt of goods and contract of a shipment, and can represent the ownership of goods or the right to receive a shipment. It also evidences the terms and conditions of a shipment and functions as conclusive proof that the goods have been loaded.

And as paperwork, it has typically been done on physical paper which must be printed out and distributed to the appropriate parties. Ordinarily, in this situation, it takes five to seven days to transfer the bill of lading.

The reason it takes so long is largely the result of having a lot of different parties involved in each shipment, each of which has their own separate systems and data silos as well as their own brokers and intermediaries, and simply the time taken to physically move paper documents through such a complex web of entangled interests. This system is primarily still run on paper.

Beyond the inefficiency, there are also the obvious costs of security, with document fraud accounting for about 40% of all maritime fraud. In an era when cargo thieves are using 3D printers to mimic security devices and cover their tracks when breaking into shipments, one of the single greatest threats is still easily-fudged paperwork. It's quite an incredible dichotomy.


e-BLs have promised massive efficiency gains for a long time. And like many things in blockchain, the electronic bill of lading (e-BL) wasn't first conceived on the blockchain and there are already some equivalents out there.

Current non-blockchain e-BL systems work much like the SWIFT network, as a trusted network operated by a for-profit third party who makes the rules of the system, controls access to it and provides the tools for interfacing with it. When different parties all use that system, they have an effective and mostly reliable digital network that works better than paper.

But there has been limited uptake with these. There are problems getting everyone on the same page, and using these systems essentially means willingly committing to being a customer in a monopoly. In this respect, blockchain can deliver the massive efficiency gains of e-BLs in general, while also overcoming the limitations of non-blockchain e-BL systems and opening up a lot of other new possibilities.

  • Blockchain presents a way for shipping companies and other participants to directly interact with each other in an open system, in contrast to other e-BLs which are more oriented around a single third party which by necessity has to control everything to give it security. Blockchain presents a framework where different parties can use their own compatible systems. For example, one company might use an Ethereum-based solution that can still talk with IBM TradeLens.
  • The transparency and immutability of blockchain can allow the instant creation of "trust" out of nothing, in a way that it can be applied like glue wherever it's needed. This allows the flexible swapping in and out of intermediaries and other parties wherever needed, to adjust to circumstances on the fly and unlock even more efficiencies.
  • Blockchain systems can be digitally tamper-proof, to prevent digital document fraud of the kind that other e-BL systems may be more vulnerable to.
  • Previous e-BL solutions may have had little to offer participants other than shipping companies. This limits its usefulness in an area that's full of so many different parties, such as banks, ports, importers, exporters, governments and so on. Blockchain can deliver a more holistic set of benefits to more participants, facilitating uptake. Demonstrating these benefits to a wide range of parties is one of the main objectives of trials such as this one, and is necessary to grow the solution into an industry-standard ecosystem and scale it to where it can bring the most benefits.

Getting results

"We are delighted with the outcome of the trial. By using the e-BL, we have seen how the entire shipment process can be simplified and made more transparent with considerable cost savings," said Tay Khiam Back, CEO and chairman of Hupco, the oranges importer involved in this trial.

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"We are pleased with the steady progress of our blockchain collaboration with IBM," said PIL executive director Lisa Teo. "To-date, we have received very positive feedback from the industry and authorities, and we are enthused by the possibilities of how our blockchain developments can transform and inject a much-needed boost in efficiency and innovation into the industry."

It's key that a wide range of participants are feeling the benefits.

"A blockchain-based trade network will be a game-changer, and we have a great opportunity here with our partner PIL to revolutionize the documentation processes in a way that benefits the entire industry," explained IBM Asia Pacific CEO and chairman Harriet Green. "Powered by blockchain, the e-BL developed by the IBM Research Singapore will be critical in helping to establish an extensible ecosystem for trade, thus expectedly enhancing trade efficiency and building trusted trade relationships among the industry players."

For Chinese New Year celebrations, mandarin oranges symbolise prosperity and good luck. They're boding well on the blockchain too.

Disclosure: At the time of writing the author holds ETH.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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