Collecting data on the Internet, without central computers, booking individual transactions or accounting entries in the network and encoded by cryptographic algorithms are just some of the signs of blockchain application. The result is to speed up processes and reduce paperwork.
In fact, blockchain is a decentralised transaction register or, in other words, a decentralised transaction platform in a distributed network infrastructure. It can also be useful for transporters and logistics specialists.
Bill of lading, otherwise known as BOL or B/L (French: distinguishing sign) is a maritime consignment note, a cargo certificate confirming the receipt of a specific cargo on board a ship and obliging the carrier to hand over the cargo at the port of destination to the holder of the bill of lading. Bills of lading are usually issued at the place of departure of the ship and must be delivered to the consignee at the port of destination.
Until now, it was necessary to send documentation by post (e.g. by courier), which usually took a few days. However, it is not uncommon for such a letter to be lost, not delivered or delivered at a later date. This means trouble. The blockchain technology may be useful in handling these types of documents.
The Swiss Fracht Group, based in Basel, has been operating for over sixty years as a global logistics operator specialising in industrial services. It operates supply chains mainly for the following sectors: energy, machinery, chemicals and automotive. Fracht offers specialist (e.g. project cargo, express) as well as standard services, using road, air, inland waterway, sea and rail transport.
For several months now the Fracht Group has been cooperating with CargoX, a provider of an innovative solution based on the blockchain platform (Smart Bill of Lading). CargoX is a Slovenian brand, which for three years has been promoting the use of blockchain to facilitate maritime transport. It offers the rewriting of bills of lading to a blockchain script. The companies of the Fracht Group and their customers have gained the possibility to use intelligent systems for handling bills of lading.
CargoX enables companies to issue and handle original waybills in the blockchain Ethereum network, facilitating the digital transfer of ownership of the maritime waybill and related assets from the sender to the recipient, the shipping agent, the shipowner or the forwarder. This electronic waybill retains all the characteristics of a “normal” bill of lading, so there is no need to send a paper document at a later date, for example.
The creators of CargoX specify the number of benefits that result from the use of blockchain technology
Firstly, it is about security and cost-effectiveness. The data is available to a specific entity immediately, it does not have to wait for a courier. This way of transferring data is also much cheaper than mail. In addition, data recorded using distributed accounting is not stored on the disk, which means complete security in case of hacking attacks. Besides, each transaction, such as the receipt of goods in the port, leaves a trace that cannot be hidden or removed – all this results from the irrevocability of blockchain records. This is important facilitation for the customs services, for whom the trade in illegal goods can be challenging.
The financial benefits are also evident, and environmental considerations are increasingly important for the users of such blockchain platforms. The aim is to save paper because the waybills are not printed, but are only transmitted electronically.
Ethereum is a decentralized cloud platform that handles “intelligent” contracts based on applications that work exactly as they were programmed and without any external intervention. Bills of lading and the accompanying documents are made available in the cloud in an encrypted form.
We believed that there will be a revolution in the digitisation of maritime transport and carefully examined all aspects of the development of online documentation. We conducted various tests using blockchain for cargo shipments, but the waybill proved to be the most suitable for inclusion in the platform because it is a valuable document that needs exceptional security. Blockchain is one of the best applications for a bill of lading,” explained the partnership of the Group with Cargo X Ruedi Reisdorf, owner of the Fracht Group.