Ocean carrier Pacific International Lines (PIL), terminal operator PSA International and IBM plan to utilize blockchain for better security, efficiency and transparency in supply chain business networks and trade finance.
Three companies signed a Memorandum of Understanding (MOU) today to explore and trial proof of concept (POC) blockchain-based supply chain business network innovations.
The MOU was signed by Ms Lisa Teo, Executive Director (Corporate Development) of PIL; Mr Oh Bee Lock, Head of Group Technology, PSA; and Ms Janet Ang, VP Industry Solutions & Smarter Cities of IBM Asia Pacific.
The three parties will work together to explore POCs using technologies like blockchain to achieve better security, efficiency and transparency in regional supply chain business networks, as well as connect to trade finance solutions that can facilitate faster approval and fraud prevention.
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 Southeast Asia via Guangxi, as well as Southeast Asia trade corridors.”
Blockchain is a decentralised ledger technology used by a business network to securely exchange digital or physical assets. Each member of the network is granted access to an up-to-date copy of this encrypted ledger so they can read, write and validate transactions. Once a transaction is validated using a consensus process, it is instantly committed to all ledgers in the network.
The net result is 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.