IBM has made waves with the blockchain transaction data service after signing an Memorandum of Understanding (MoU) with ocean shipping carrier Pacific International Lines (PIL) and port group PSA International (PSA) — two key players linking Singapore to global trade.
The Singaporean branch of IBM will now explore and trial proof of concept (PoC) blockchain-based supply chain business network innovations with PIL and PSA to achieve better security, efficiency, and transparency in regional supply chain business networks.
Fraud prevention will also be a priority as the service will connect to trade finance solutions that will approve transactions quicker.
This will be an important factor in processing cargo for both companies as PSA handled 68 million TEU in 2016 and PIL is the 12th largest container shipping company in the world with a 372,000 TEU fleet capacity.
Blockchain is a decentralised ledger technology used by a business network to securely exchange digital or physical assets.
Each member gains access to the network through an up-to-date copy of this encrypted ledger so they can read, write, and confirm transactions.
A consensus process then confirms transactions and instantly commits it to all ledgers in the network, resulting in faster, private, confidential, and auditable business-to-business interactions among suppliers, distributors, financial institutions, regulators, or anyone wishing to make a secure exchange.
Blockchain creates a permanent, digitised chain of transactions that are grouped in blocks and cannot be altered.
The move is part of the Singapore Business Federation’s plan create regional cooperation, connectivity and capitalise upon emerging business opportunities in the 21st century Maritime Silk Road.
Tan Chong Meng, Group CEO of PSA, said: “A more transparent, secure and robust certification system and document flow will benefit the whole supply chain as well as have enormous potential for application in sectors such as food, pharmaceutical and trade finance.
“Across the global movement of goods and cargo, many activities continue to operate in silos.
“Blockchain has the potential to reduce inefficiencies and gaps within the supply chain, promote more cost-efficient transactions and facilitate the continued growth in world trade.
“PSA looks forward to working alongside its partners in supporting this initiative and we will contribute our expertise and knowledge in managing ports and advancing supply chains.”
Randy Walker, Chairman and CEO – IBM Asia Pacific, said: “Blockchain as the foundation of an immutable, security-rich, highly auditable, and transparent shared business network, offers improved transparency, data security, and workflow productivity in complex business networks.
“IBM will leverage the Hyperledger Fabric platform, its Supply Chain Business Network, and expertise from the IBM Center for Blockchain Innovation in Singapore to pioneer projects with the potential for widespread impact across industries in China and Southeast Asia.”
Teo Siong Seng, Managing Director of PIL, said: “The MOU seeks to develop solutions that translate into fraud and error reduction, as well as cost savings.
“PIL is pleased to contribute towards our common objectives with intermodal and shipping business know-how and services.
“We hope that the fruits of collaboration may in the long term enhance our support to Chongqing Connectivity Initiative projects, the Southern Corridor connecting Western China to SoutheastAsia via Guangxi, as well as Southeast Asia trade corridors.”