Blockchain Helps China’s Lunar New Year Craving For Mandarin Oranges

Blockchain, Innovation, Regulation | February 3, 2019 By:

China’s biggest holiday, the Lunar New Year celebration, is just getting underway. As with all major occasions, it’s important that food and supplies arrive on time. This is particularly true of mandarin oranges, a symbol of prosperity commonly part of the festivities in Asia, used as greeting gifts and enjoyed during the celebrations.

Companies that ship perishable items like mandarin oranges require efficient document processing and expedited cargo clearing for delivery to help shorten overall shipping time, which in turn reduces risks for retailers and provides fresher options to consumers.

However, current processes mean that shipments of oranges from China can take up to seven days for the transfer of critical shipping documents and ultimately, the cargo.

Pacific International Lines (PIL) conducted a pilot using an electronic Bill of Lading (e-BL) built on the IBM Blockchain platform to track a shipment of 28 tons of mandarin oranges from China to Singapore in real-time. The pilot demonstrated a significant reduction in the administrative process of transferring the title deed, from five to seven days to just a second. The Bill of Lading is one of the most crucial documents used in international trade, typically issued by a shipping carrier to document the title or ownership of goods. It also functions as a receipt of goods and a contract of the shipment.

This meant that 3,000 fresh oranges arrived ahead of schedule, ensuring an ample supply for Lunar New Year celebrations.

Built to be compatible with TradeLens, the production global shipping solution from Maersk and IBM, the pilot is a prime example of how blockchain can dramatically reduce inefficiencies in traditional shipping processes.

 Hupco Pte Ltd (“Hupco”), a major importer in Singapore of mandarin oranges for the upcoming Lunar New Year, took part in the e-BL trial as the consignee of 3,000 cartons of mandarin oranges (approximately 108,000 mandarin oranges).

“We are delighted with the outcome of the trial,” said Mr Tay Khiam Back, chairman and CEO of Hupco. “By using the e-BL, we have seen how the entire shipment process can be simplified and made more transparent with considerable cost savings. Our customers can expect their orders in a more timely manner, and, importantly, with freshness assured.”

 The live trial follows the e-BL Proof of Concept which was announced in October 2018. PIL and IBM collaborated to digitize the lifecycle of negotiable and non-negotiable Bills of Lading on top of distributed ledger technology. The live trial is an important milestone because it validates how the system works in real-time conditions.

  A similar trial from Singapore to Brunei has taken place for negotiable e-BL with key stakeholders participating including Bank of China Limited Singapore Branch (BOC). The negotiable e-BL network establishes an extensible ecosystem which facilitates trade transactions and settlements, as the process of issuing Letter of Credit and Guarantee is enhanced.