Telsa and Hong Kong based CargoSmart have completed a successful test of a blockchain-based supply chain solution.
In one of the first pilot projects with an ocean carrier conducting a real-time exchange of shipment data with a terminal operator through blockchain, CargoSmart worked with Tesla, Shanghai International Port Group (SPIG), and Cosco Shipping lines to test a new application to transform the cargo release process.
Along with ‘banking the unbanked’ and providing low cost international payment solutions, improving supply chain efficiency has long been touted as one of the most promising real-world applications of blockchain technology. A single, trusted source of truth in cargo documentation and audits is missing from most supply chains, and it is this property that blockchains are uniquely positioned to provide.
The pilot project was designed to minimize consignee and shipping agent verification steps with their ocean carriers in order to speed up the release of sea waybills (the list of freight contained on a ship). As a result, truckers would be able to uplift cargo from terminals faster, helping shippers meet tight delivery windows.
During the pilot in December 2019, COSCO and SIPG streamlined the cargo release process by enabling Tesla to accelerate its cargo pick up procedures on a trusted and secure platform. The test involved a COSCO ship docking at the port of Yangshan south of Shanghai loaded with Telsa parts destined for Tesla’s recently opened ‘Giga’ factory in Shanghai.
Efficiency in this process is critical for Tesla, as the company has long been criticized for its slow production rates – and its new Shanghai facility is expected to deliver 250,000 new vehicles annually. The trial allowed SIPG to view a single, trusted source of COSCO’s sea waybill data, enabling faster preparation of delivery orders for consignees and shipping agents.
Cosco spokesperson Wu Yu says the trial showcased significant efficiency gains in the cargo release process, and for downstream supply chain planning. CargoSmart says it will conduct similar pilots with Xiamen Ocean Gate Container Terminal Co., Ltd. (XOCT) and other terminal operators such as those at the Port of Qingdao in China and the Port of Laem Chabang in Thailand. The objective is to broaden the scope of the pilot by involving more carriers and terminals and eventually extending the pilot to other industry participants.