Tesla is working with the Shanghai Port Group to test if blockchain can make the process of importing goods into China any easier.
In an announcement Tuesday, blockchain-based logistics provider CargoSmart revealed Tesla, the Shanghai International Port Group (SIPG) - the sole operator of the port - and Chinese cargo ship operator COSCO trialed a blockchain app that shortened the cargo release time and makes it easier for Tesla's logistics teams to take ownership of goods once they are offloaded.
It is among the first pilot projects with an ocean carrier conducting a real-time exchange of shipment data with a terminal operator through blockchain.
Blockchain is a continuous sequential chain of blocks containing information built according to certain rules. Communication between blocks is provided by numbering, new data and data of the previous block. To change the information in the block, you have to edit all subsequent blocks. Most often, copies of block chains are stored on many different computers independently of each other, which makes it extremely difficult to make changes to information already included in the blocks. Therefore, the information obtained in this way is extremely reliable. Working in this way, there is no need to use any information found on material documents/invoices/receipts. All information will be in the blockchain, in digital form.
The pilot not only demonstrated the benefits of having a single, trusted source of truth in cargo documentation, but also the efficiency gains for industry participants. Such an application will undoubtedly accelerate the digitalization of shipping industry processes and the further optimization of currently stressed global supply chains. The application will be further developed for participants of the Global Shipping Business Network (GSBN) blockchain consortium, once it is officially established.
Photo: Qilai Shen/Bloomberg
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. As a result, truckers are able to pick up their cargo at the terminal faster, helping shippers meet delivery windows and ensure that service quality and customer commitments are met.
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 pilot also allowed SIPG to view a single, trusted source of COSCO’s sea waybill data, enabling faster preparation of delivery orders for consignees and their shipping agents.
Wu Yu, General Manager of Business Process & System Division of COSCO said, “The pilot with SIPG and CargoSmart showcased significant efficiency gains not only in the cargo release process, but also for downstream supply chain planning by presenting a single source of truth for documentation for all involved parties. We look forward to more blockchain-based applications that can create value for customers and the industry alike. ”
The successful pilot has proven that the unique collaboration model between ocean carriers and terminal operators is able to create benefits for stakeholders along the global supply chain. Leveraging this successful experience, the cargo release application is expected to further promote carrier-terminal data exchange and streamline operations.
This method of receiving cargo is of great benefit to Tesla Giga Shanghai. If this project is launched and expanded, this should accelerate the supply chain for Tesla, which in turn will be able to accelerate the receipt of the necessary materials by the factory.
Special thanks to @JosephVVallace/Twitter for the tips