In the supply chain industry, there is an acute need to simplify the creation, storage, and exchange of documents
Blockchain technology can be applied to various aspects of stock trading to enhance transparency, security, efficiency, and reduce operational costs. Let’s explore the use of Blockchain in stock trading. For this article, I am using the Blockchain platform to solve the complex Bill Lading flow process where tons of document and export/import banks are involved, leading to a lot of non-governance issues and a plethora of uncertainties in the trading system. The following concepts relating to Blockchain fundamental technology are expounded in this piece.
The Business Problem
In the supply chain industry, there is an acute need to simplify the creation, storage, and exchange of documents required and generated during the movement, handling, and storage of goods, both in EXIM (Export & Import Bank) as well as domestic supply chains. Here are some important factors to be taken into consideration:
• Speed of transfer of physical documents which is bound by distance
• Physical documents getting lost, misplaced, damaged or stolen
• A need to transport the document in a secured, encrypted and decentralized network and interoperability using APIs
• Cost of printing, transferring and managing physical documents being high
• Impediment in collaboration of documents between multiple stakeholders in the logistics life cycle
• The need for an end-to-end digitization of document management –document generation, issuance, clearance, signing, transmission, negotiation, and presentation
• Traceability and audit trial of documents transfer between multiple stakeholders
• Costs due to redundancy in documentation, submission, printing, and transfer
Current Flow process of Bill of Lading :
The Bill of lading (B/L) is a crucial document used in international trade and shipping to acknowledge the receipt of goods and outline the terms of agreement between the shipper and the carrier. Below is the flow process of a bill of lading:
Creation of the Bill of Lading: The process starts when the exporter or shipper prepares the bill of lading. The shipper provides necessary information, such as the description of goods, quantity, weight, packaging details, consignee information, and the destination port.
Booking with the Carrier: Once the bill of lading is prepared, the shipper contacts the shipping carrier to book cargo space on the desired vessel. The carrier then confirms the booking and assigns a booking number.
Loading of Goods: The shipper delivers the goods to the designated port or terminal, where the carrier’s personnel inspect and verify the cargo through the information provided in the bill of lading. The goods are then loaded onto the ship.
Senior Vice President (II) –Head of Data and Cloud Platform,
HDFC Bank
Issuing of the Bill of Lading: After the cargo is successfully loaded onto the vessel, the carrier issues the bill of lading. This document serves as a receipt for the goods, confirming their shipment, and also functions as a contract between the shipper and the carrier.
Endorsement and Transfer of the Bill of Lading: The shipper can endorse the bill of lading to transfer the ownership of the goods to a different party, such as a consignee, a bank involved in trade finance, or other intermediary.
In-Transit Period: During the journey, the bill of lading accompanies the cargo and is considered essential for the consignee to claim the goods upon arrival at the destination port.
Figure 2.0- Flow process of Bill of Lading
Here is a Blockchain approach that solves the complexity we discussed earlier:
Oracle Hyperledger Framework
