IBM and Singapore port operator explore blockchain in supply chain
August 29, 2017
IBM is working with containership operator Pacific International Lines (PIL) and Singapore-based port group PSA to explore the use of blockchain-based supply chain networks.
The three parties will work together to explore proofs of concept using technologies such as blockchain to achieve better security, efficiency and transparency in regional supply chain business networks, as well as connect to trade finance that can facilitate faster approval and fraud prevention.
The MoU was signed by Lisa Teo, executive director of PIL, Oh Bee Lock, head of group technology at PSA, and Janet Ang, vice president of IBM Asia Pacific. Lawrence Wong, Singapore’s minister for national development, Teo Siong Seng, managing director of PIL, Tan Chong Meng, group CEO of PSA, and Randy Walker, CEO of IBM Asia Pacific, witnessed the signing ceremony, which took place during this month’s Singapore Regional Business Forum (SRBF).
“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,” said Chong Meng. “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.”
Blockchain is a decentralised ledger technology used by a business network to exchange digital or physical assets securely. 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.
“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,” said Walker. “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 south-east Asia.”
Siong Seng added: “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 south-east Asia via Guangxi, as well as south-east Asia trade corridors.”
SRBF is organised by the Singapore Business Federation to explore regional cooperation, connectivity and emerging business opportunities in the 21st century Maritime Silk Road. The event was attended by business leaders, academia, policy makers, diplomats and government officials from Singapore, China and over 40 regional countries.
PIL is the world’s 12th top containership operator and one of the largest ship owners in south-east Asia. It owns and operates a fleet of more than 160 modern vessels offering services to Far East, Africa, Americas, Europe, Black Sea, Middle East, Indian sub-continent, Oceania and south-east Asia.
Global port group PSA participates in around 40 terminals in 16 countries across Asia, Europe and the Americas with flagship operations in PSA Singapore Terminals and PSA Antwerp. It was previously known as Port of Singapore Authority.