CargoSmart has announced the successful completion of a proof of-concept (POC) trial of a blockchain-based system which aims to support collaboration among banks, terminal operators and ocean carriers to streamline financing applications.
The POC trial of the eTradeConnect system, a multi-bank blockchain consortium in Hong Kong facilitated by the Hong Kong Monetary Authority (HKMA), included banks and ocean carriers such as Bank of China, The Bank of East Asia, HSBC, Standard Chartered, COSCO Shipping Lines, and OOCL.
The goal was to prove that linking supply chain data with trade finance transactions could provide enhanced traceability and efficiency in interactions between banks and their industry customers.
Under current practice, in order to apply for financing services, companies are required to provide banks with shipping documents for validation. The POC connects two blockchain networks, allowing banks in the eTradeConnect network to have permission-based access relevant historical records provided by ocean carriers and terminals, removing the need for the documents to be supplied separately.
“Finding ways to improve the level of efficiency in how the shipping industry exchanges information and documents has always been a monumental challenge,” said Andy Tung, Co-Chief Executive Officer of OOCL.
“The success in this proof-of-concept is a very positive direction forward to not only tackle this challenge head on, but to take it a step further by broadening the scope of stakeholders such as financial institutions to be a part of this open and transparent digital ecosystem.”
“We certainly look forward to seeing more of these kinds of forward thinking technologies and collaborations being implemented for the collective good of all stakeholders.”
The eTradeConnect system will be linked to further applications within the Global Shipping Business Network (GSBN) blockchain initiative, once the new system goes live. The GSBN is headed up by CargoSmart and includes industry operators like CMA CGM, COSCO SHIPPING LINES, COSCO SHIPPING Ports, Hapag-Lloyd, Hutchison Ports, OOCL, Port of Qingdao, PSA International and Shanghai International Port Group.
The group aims to develop standards in the area of business-to-business data exchange, with the organisation planning to operate a data exchange platform for global supply chain participants around the world upon its official formation.