Blockchain for trade:Examples and Lessons from real world implementations
Shantanu Godbole, Ph.D.Senior Manager – Industries ResearchIBM Research - India
A private sector overview of relevant blockchain initiatives
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• Trade Logistics• Tradelens, Bill of Lading (PIL), Global Shipping Business Network, Open Trade Blockchain
• Payments• Ripple, SWIFT, Stellar (Worldwire)
• Trade Finance• R3 Voltron, we.trade, eTradeConnect
• Food supply chains and agricultural commodities• ADM-Bunge-Cargill-Dreyfuss for commodity markets, IBM Food Trust with Walmart/others
Append-only distributed system of record shared across business network
A network of industry participants maintains a distributed, permissioned ledger with copies of document filings, relevant supply chain events, authority approval status, and full audit history; every change results in a new, immutable block
Shared business logic governing what transactions may be written to the ledger
Cross-organizational business processes, such as cargo title transfer, are pre-programmed and built into Blockchain and distributed to and executed on the network, preventing any member from changing the business logic
Ensuring appropriate visibility; transactions are secure, authenticated and verifiable
Cryptography enables permissioned access so only the parties participating in a specific shipment can submit, edit or approve related data
Transactions are endorsed by relevant participants
Information such as documentation filings and authority approvals can only be changed if endorsed by the parties taking part in the shipment; full audit history maintained on the Blockchain
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BLOCKCHAIN: WELL SUITED FOR SUPPLY CHAINSBlockchain addresses the underlying challenges inherent in collaborating across a distributed, fragmented supply chain ecosystem
SHARED LEDGER SMART CONTRACT PRIVACY TRUST
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VISION: SHIPPER-CENTRIC MODEL TO NETWORK MODELInland Transportation
Shippers / Beneficial Cargo Owner
Supply Chain Visibility Systems
Trade Associations
Supply Chain / Transportation Management Systems
Authorities
Financial / Insurance Services
Port Community Systems; Terminal Operating Systems
Freight Forwarders / 3PLs
Customs Systems
Customs Brokers
Inland Transportation
Shippers / Beneficial Cargo Owner
Supply Chain Visibility Systems
Trade Associations
Supply Chain / Transportation Management Systems
Authorities
Financial / Insurance Services
Port Community Systems; Terminal Operating Systems
Ports and Terminals
Freight Forwarders / 3PLs
Customs Systems
Ocean Carriers
Customs Brokers
This requires trust.
Ocean Carriers
Ports and Terminals
Connect the Ecosystem Drive True Information Sharing Foster Collaboration and Trust Spur Innovation
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THE TRADELENS SOLUTION
ECOSYSTEM
PLATFORM
MARKETPLACE
The foundation of TradeLens is its business network — shippers, freight forwarders, ports and terminals, ocean carriers, intermodal operators, government authorities, customs brokers and more. Each entity shares information that can be tracked, stored and actioned across the platform throughout a shipment’s journey.
The TradeLens Platform is accessible via an open API and brings together the ecosystem through a set of open standards. Powered by Hyperledger Fabric blockchain technology and IBM Cloud, the platform enables the industry to share information and collaborate securely.
An open Applications and Services Marketplace allows both TradeLens and third parties to publish fit-for-purpose services atop the TradeLens platform, fostering supply chain innovation and value creation.
AN OPEN AND NEUTRAL BLOCKCHAIN-BASED PLATFORM THAT IS DIGITIZING THE GLOBAL SUPPLY CHAIN AND TRANSFORMING TRADE
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ECOSYSTEM PARTICIPANTS
Engage with the platform as a consumer of shipping information to improve supply chain management, as a means to collaborate with supply chain partners, and as a way to streamline clearance
Shippers/BCOs
NETWORK MEMBERS
TRADELENS CLIENTS
Engage with the platform as a consumer of shipping information, a means to collaborate with customers and supply chain partners, and a way to improve customs brokerage capabilities
Freight Forwarders / 3PLs
Engage with the platform as a consumer of supply chain information for a variety of trade finance, insurance, and other purposes to reduce the risk of fraud and increase speed and flexibility to customers
Financial Services
Provide the transportation plan, information about the status of shipments across the ocean leg, and critical documents such as the BoL; access end-to-end supply chain data in near real-time including events directly from shipper, intermodal, customs and 3PLs
Ocean Carriers / NVOCCs
Provide information about the disposition of cargo within the boundaries of the port/terminal; access near real-time information to enrich port collaboration and improve terminal planning
Ports / Terminal Operators
Provide transportation plans and information on the disposition of shipments carried on trucks, rail, barges, etc.; improve planning and utilization of assets given near real-time access to end-to-end supply chain events for shipments
Intermodal Operators
Provide information about the export and import clearance status for shipments into and out of the country; access end-to-end supply chain information for improved customs clearance and risk assessments
Government Authorities
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Coverage across 6 continents
61 ports and terminals directly integrated in to TradeLens
Data from up to 600 ports and terminals captured by existing TradeLens members
THE TRADELENS PORT AND TERMINAL NETWORK
Ports and terminals directly integrated with TradeLensPorts and terminals contributing data via carriers to TradeLens
Interactive map of TradeLens port and terminal network:
https://www.tradelens.com/ecosystem/
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The TradeLens blockchain is a shared, immutable ledger that records transactions and tracks tangible and intangible assets. Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.
While the power of TradeLens comes from its members, blockchain enables secure distribution and storage of vital information at the heart of the platform.
TradeLens uses the IBM Blockchain Platform which is based on Hyperledger Fabric, an open-source permissioned blockchain where the peer members (“Trust Anchors”) are known to the network based on cryptographic identities.
BLOCKCHAIN
Tamper-proof recording and non-repudiation for all data submitted to the solution.
Verifiability of data against the recorded proof of submission on the blockchain.
Recoverability of the solution from the data recorded on the blockchain.
Provenance and Auditability. All transactions are signed and dated on the ledger.
Privacy of data to ensure that it is only shared with relevant organizations.
How the TradeLens blockchain connects the ecosystem:
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BCO 3PL Drayage Customs & Authorities
Ports & Terminals Carriers Ports &
TerminalsCustoms & Authorities Drayage 3PL BCO
Start c
onsig
nmen
t trac
king
(book
ing co
nfirm
ed)
Empty co
ntaine
r Gate
-in at
desti
natio
n term
inal
Empty co
ntaine
r Gate
-Out
from
depo
t
Contai
ner s
tuffin
g com
pleted
at
inlan
d loc
ation
Gate-in
Full at
expo
rt term
inal
(plan
ned/e
stimate
d/actu
al)
Contai
ner s
electe
d for
inspe
ction
Custom
er Rele
ase
Contai
ner L
oade
d onb
oard
on
Vesse
l
Vesse
l dep
arture
(plan
ned/e
stimate
d/actu
al)
Vesse
l arriv
al
(plan
ned/e
stimate
d/actu
al)
Discha
rged a
t impo
rt term
inal
(plan
ned/e
stimate
d/actu
al)
Carrier
relea
se
Impo
rt Cus
toms r
eleas
e
Gate O
ut ful
l con
taine
r
plann
ed/es
timate
d/actu
al)
Discha
rged f
rom Truc
k
plann
ed/es
timate
d/actu
al)
Contai
ner s
trippe
d
Packing List Non-NegotiableBill of Lading
Export Documentation
Advance Declaration
Pre-Paid Invoice
Certificate of Origin
Shipping Instructions
Importer Security Filing
Cargo Specific Certificate
Commercial Invoice
Customs Clearance
Import Documentation
SHIPPING MILESTONES AND SHIPMENT DATA*
STRUCTURED AND UNSTRUCTURED DOCUMENTS*
TRADELENS BLOCKCHAIN BUSINESS NETWORK
Original Bill of Lading
* Note: representative sample only of the data on the platform
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TradeLens can be accessed via the web without integration. Users can engage with essential platform features including the search and track functions and document access through a secure SSO web app.
THE SHIPMENT MANAGER USER INTERFACE
Consignments can be identified by booking, equipment, bill of lading and client reference
numbers.
View shipping events, documents and transportation
plan.
Events are sourced directly from carriers, ports, terminals and other parties to the
shipment.
A single, secure, simplified view across all shipments in the supply
chain
120 plus standardized events published from the source.
Near real-time events directly from the source are instantly visible to all parties to a
consignment.
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TradeLens is committed to the promotion and adoption of standards and interoperability of platforms.
TradeLens is a neutral platform that is available to participants of any party to a shipment, anywhere in the world. The platform provides a way for all major logistics and permissioned participants to immediately contribute to and extract value from the TradeLens network.
STANDARDS AND INTEROPERABILITY
TradeLens will work closely with the advisory board, ecosystem members and standards bodies to help the industry develop and adopt standard codes and data models. The TradeLens data model and access control scheme aligns with UN/CEFACT.
Information standardization
TradeLens is committed to openness, with all functionality surfaced via non-proprietary, publicly available APIs that are designed specifically for ease of integration.
Interface standards
The TradeLens platform has full intentions to follow blockchain-based standards evolving in the industry, inclusive of cross-ledger namespace and transfers or information between ledgers.
Blockchain interoperability
Standards DataLocation: LOCODE, SMDG, Transport: IMO, NMFTATime: ISO8601, Business Objects: UNCEFACT SCRDMIdentity: WCO Trader Identification Number
Standards OrganizationsOpenshipping.org, DCSA*UN, WCO, GS1ISO/TC 307
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TradeLens provides a framework for sharing documents among trade parties, with security, version control, and privacy. Authorized users with the required permissions can upload, download, view and edit documents. The TradeLens document store allows documents to be securely stored and viewed by various parties to a shipment.
DIGITIZED DOCUMENTS
Trade documents are associated with containers, and consignments in a distributed and shared repository, eliminating endless file, folder and email searching for information.
TradeLens supports the use of structured documents. The information they contain can be easily analyzed and interpreted, allowing for greater automation and accuracy.
Each time a document is edited or uploaded to the TradeLens platform, a new version of the document is created and added to the document store, eliminating multiple copies and the inconsistency of identifying the latest versions.
TradeLens uses the Hyperledger Fabric permissioned blockchain to guarantee the immutability and traceability of trade documents.
Participants assigned to the consignment have default access rights based on a unified permissions model
Digitized document benefits
Sea Waybill*
Commercial Invoice *
Packing List *
Booking Request
Booking Confirmation
Shipping Instructions
Export Declaration
Bill of Lading
Pro-Forma Invoice
Arrival Notice
Import Declaration
Health Certificate
Phytosanitary Certificate
Veterinary Certificate
Fumigation Certificate
Inspection Certificate
Certificate of Analysis
Certificate of Origin
Dangerous Goods Declaration
DOCUMENTS SUPPORTED ON THE PLATFORM
Network participants assigned to a consignment can immediately access shared documents and data, never having to wait for a document to be sent.
* Structured support
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The TradeLens platform manages the sharing of data associated with three interrelated “objects” as defined by the UN-CEFACT Supply Chain Reference Data Model standard: Shipments, Consignments, and Transport Equipment.
DATA MODEL
A separately identifiable collection of goods (available to be) transported together from a seller to a buyer, including the shipping arrangements and movement of products including despatch and delivery, regardless of the modes of transport or the contracting/subcontracting relationships.
Shipment
Separately identifiable collection of goods transported together from one consignor to one consignee via one or more modes of transport as specified in one single transport contract.
Consignment
The physical equipment used to hold, protect, or secure cargo for logistics purposes. Currently, containers are supported as Transport Equipment in TradeLens. Since some types of transport equipment are re-used, Transport Equipment in TradeLens is further constrained to an instance of the usage of a piece of equipment within the context of a shipment or a set of consignments relating to the end-to-end transportation of a shipment.
Transport Equipment
SHIPMENT
SELLER BUYER
CONSIGNMENT 1(ORIGIN INLAND)
CONSIGNMENT 2(FREIGHT FORWARDER)
WAREHOUSE WAREHOUSEPORT
CONSIGNMENT 3(OCEAN)
CONSIGNMENT 2(DESTINATION INLAND)
TRANSPORT EQUIPMENT
PORT
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TradeLens permissions are determined through a combination of the organization’s role and the data type. The TradeLens platform then permits access to data according to the permission matrix.
The full Data Sharing Specification is available at here
DATA SHARING
Events
Planned stuffing start ○ ⦿ ○ ⦿ ○ ○ ○ ○ ○ ○ ⦿
Planned stuffing completed ○ ⦿ ○ ⦿ ○ ○ ○ ○ ○ ○ ⦿
Actual loaded on truck ○ ○ ○ ⦿ ⦿ ○ ○ ○ ○ ⦿ ○Estimated gate out ○ ○ ○ ⦿ ⦿ ○ ○ ○ ○ ⦿ ⦿
Actual gate in ○ ○ ○ ⦿ ⦿ ○ ○ ○ ○ ⦿ ⦿
Transport Service Buyer Consignor Consignee
Origin 3PL Agent
Destination 3PL Agent
Export Customs Broker
Import Customs Broker
Request Party Notify Party
Transport Service Provider
Origin Marine
Terminal . . .
⦿ Participant has an obligation to provide (publish) the data, where relevant/applicable ○ Participant has no access to the data
Documents
Booking Confirmation ○ ○ ○ ○ ○ ○ ○ ○ ○ ⦿ ○Shipping Instructions ○ ⦿ ○ ○ ○ ○ ○ ⦿ ○ ○ ○Bill of Lading ○ ○ ○ ○ ○ ○ ○ ○ ○ ⦿ ○Sea Waybill ○ ○ ○ ○ ○ ○ ○ ○ ○ ⦿ ○House Bill of Lading ○ ○ ○ ⦿ ○ ○ ○ ○ ○ ⦿ ○
○ Participant has read access (can subscribe) to the data
. . .
. . .
B L O C K C H A I N E B L P R O J E C T B A C K G R O U N D
• Bill of lading (BL) is in use since16th Century
• Functionalities:Ø Receipt of goodsØ Evidence of the carriage contractØ Title to goods
• Issued by Shipping LineØ Original paper BL (with endorsement)
is used to establish ownershipØ Original paper BL is required to take
delivery of goods
• BL TypesØ Negotiable and Non-Negotiable BL
Shipping Line
3. Surrender BL and take delivery
Shipper/Seller
Shipper’sBank
Consignee’sBank
Consignee/Buyer
1. Issue BL
2.B Transfer BL
2.B Transfer BL
2.BT
rans
fer B
L
2.A Transfer BL
Negotiable BLNon-Negotiable
BL
Payment - LC
Paym
ent -
LC
Payment -LC
E B L P R O C E S S F L O W
Transferring & Surrendering EBL
Sharing EBL (read-only)
Shipper Negotiating Bank Issuing Bank Consignee
Current/Past Owner
Share selectedEBL sections
Customs
Issuing EBL
Shipper
Shipping Line
Submit shipment instructions to shipping line
Shipper
Non-Negotiable
NamedConsignee/ Buyer
Surrender
Negotiable
NegotiatingBank
Shipping Line
IssuingBank
Review shipment instructions
Issue BL with titleassigned to Shipper
Return Shipmentinstructions to
Shipper
S U M M A R Y O F E B L P O C
Document TransferPaper BL EBL on Blockchain
Traditional paper B/L
5-10 days via courier service
With EB/L
in secondsvia blockchain network
Document HandlingPaper BL EBL on Blockchain
EB/L
Fraud
Can be lost
Speed
Security
Paper B/L
Yes
Yes
Slow
Low
No
No
Instant
High
ControlReal-time Title Visibility
& Transfer History (for SL)
PermissionedInformation
sharing
Visibility toentire shipment lifecycle
Compliance
• Audit Trail• Improved workflow management
Summary
ShorterTime
Risk Assessment
ReduceCost
ProvenanceSupport
IncreasedPrivacy
Paper B/L EBL on blockchain
F E A T U R E S Digitization
• Traceable, tamper-proof flowof document/asset
Smart-form of Secure Data
010010110101010110010
010010110101010110010
• Real-time information sharing over the whole BL lifecycle
Issue EBL
Retrieve & Share EBL
Transfer EBL
Surrender EBL
Real -time visibility& Transfer History
API-based Design
EBL
S U M M A R Y O F E B L P O C
Document TransferPaper BL EBL on Blockchain
Traditional paper B/L5 -10 days via courier service
With EB/Lin secondsvia blockchain network
Document HandlingPaper BL EBL on Blockchain
EB/L
Fraud
Can be lost
Speed
Security
Paper B/L
Yes
Yes
Slow
Low
No
No
Instant
High
ControlReal-time Title Visibility
& Transfer History (for SL)
PermissionedInformation
sharing
Visibility toentire shipment lifecycle
Compliance
• Audit Trail• Improved workflow management
Summary
ShorterTime
Risk Assessment
ReduceCost
ProvenanceSupport
IncreasedPrivacy
Paper B/L EBL on blockchain
F E A T U R E S Digitization
• Traceable, tamper-proof flowof document/asset
Smart-form of Secure Data
0100101
1010101
0110010
0100101
1010101
0110010
• Real-time information sharing over the whole BL lifecycle
Issue EBL
Retrieve & Share EBL
Transfer EBL
Surrender EBL
Real -time visibility& Transfer History
API-based Design
EBL
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MARKETPLACE
Platform CorePlatform Core enables the broad sharing of supply chain data including trade documents across permissioned parties in the TradeLens ecosystem.
Third-parties can develop, sell and distribute authorized
applications that leverage TradeLens.
Third Party Applications*
Clear Way*Clear Way applications automate business processes across TradeLens participants by employing workflow technology and blockchain smart contracts.
Other TradeLens Applications*First-party applications for purposes such as reporting, analytics and business intelligence, and trade finance and insurance.
TradeLens has released and is developing a range of applications that sit on top of and leverage the platform.
The TradeLens Marketplace is a channel for developing, selling and distributing authorized applications by third-parties as well TradeLens. TradeLens will provide the technical foundation to enable parties to build and deploy applications. Service offerings can also be made available in the marketplace to support ecosystem members.
* Currently on the TradeLens roadmap and not available today as officially released and supported products
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1 – 2 YEAR OUTLOOK (SUBJECT TO CHANGE)FUTURE OF APPLICATION MARKETPLACE
IBM’s statements regarding its plans, directions, and intent are subject to change or withdrawal without notice at IBM’s sole discretion. Information regarding potential future products is intended to outline our general product direction and itshould not be relied on in making a purchasing decision. The information mentioned regarding potential future products is not a commitment, promise, or legal obligation to deliver any material, code or functionality. Information about potentialfuture products may not be incorporated into any contract. The development, release, and timing of any future features or functionality described for our products remains at our sole discretion.
Blockchain-based workflow enabling a range of documentation use cases across ecosystem participants
Clear Way
Book freight and send shipping instructions direct from the platform and benefit from tight integration with visibility and document sharing
Booking & Shipping Instructions
Simplified, consistent, and auditable means to share dangerous goods documentation across all modes of transport
Cross-mode Dangerous Goods
Paperless transfer of ownership and cargo release on TradeLensmember carriers
Negotiable eBill of Lading
Marketplace offerings from leading trade finance and cargo insurance providers, as well as applications and services for financial services
Financial Services Advance Ship Notification (ASN) automation, AI logistics insights, interoperability with leading blockchain solutions aligned with market needs, and more
Additional Applications
Notifications will work by layering business logic over the data-rich TradeLensplatform and presenting to clients – either through UI or API – information to help further manage their supply chains.
Notifications
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ECOSYSTEM FEEDBACKFrom Early Programs and Two Releases
⦿ Clear definition of information sharing rules in participation agreements is critical to success
⦿ Information sharing must be limited to entities with a legitimate need-to-know
⦿ Preferences must be customizable at scale
⦿ Customs authorities are key to the network
⦿ Technology must be in lock-step with Regulatory/Legal evolution for maximum trade facilitation benefits