According to the Commonwealth Bank of Australia (CBA), the CBA and five Australian and international supply chain companies have successfully shipped seventeen tonnes of almonds from Sunraysia in Victoria, Australia to Hamburg, Germany, using a blockchain-based platform built on Ethereum.
The blockchain-based platform uses a combination of technologies including distributed ledger technology, smart contracts, and the internet of things (IoT) to facilitate global trade. The experiment was highly successful and managed to track the almond shipment from the packer to the final delivery.
“Our blockchain-enabled global trade platform experiment brought to life the idea of a modern global supply chain that is agile, efficient, and transparent,” said Chris Scougall, the managing director of Industrials and Logistics in Client Coverage of CBA. “We believe that blockchain can help our partners reduce the burden of administration on their businesses and enable them to deliver best-in-class services to their customers.”
Blockchain Technology to Modernize Global Trade
Alex Toone, CBA’s Managing Director of Global Commodities and Trade, mentioned that the new blockchain-based platform and the successful pilot are a great way to show how we can modernize modern global trade. The pilot involved many different partners from the complete supply chain, including the global agriculture company Olam Orchards Australia, Pacific National for rail haulage, the port landlord of Port of Melbourne, stevedore Patrick Terminals, and OOCL Limited. In addition to the partners, the technological hardware and software assistance was provided by LX Group, an Australian IoT provider.
The blockchain-based platform improves three areas of global trade: operations, documentation, and finance. The digitization of information ensures that data concerning the completion of tasks and shipping documents are recorded on the blockchain.
The blockchain-based system enabled every partner to view and track the location of the almond shipments. They could also monitor and assess the temperature and humidity inside the shipping containers via IoT technology. The additional data is great assurance for all partners along the supply chain—providng greater transparency, efficiency, and accountability when it comes to the location, condition, quality, and authentication of the products.
“Trade inefficiency can be extremely detrimental to our business,” said Emma Roberts, the Supply Chain Manager from Olam Orchards Australia. “It is vital that as an industry we look at emerging technology for ways to enhance the supply chain to develop a more transparent and efficient platform. This project has shown that through collaboration from all parts of the supply chain that this can be achieved.”
CBA Tests the Potential of Ethereum’s Blockchain Technology
CBA mentioned that they used the Ethereum blockchain in the almond shipment project. They decided to choose Ethereum because the Ethereum network has the strongest development activity in the world and offers the functionality requirements that CBA required. CBA, however, acknowledges that there are many other mainnet blockchain networks that they may consider partnering with in the future.
The final CBA platform will be on a private blockchain. Their goal is to provide more visibility across all key stakeholders, which will provide everyone a better understanding of how the blockchain-based platform works. However, in future commercial projects, CBA may restrict the access rights to ensure that commercially sensitive information can only be viewed by parties with permission.
“Since the expansion of globalization, global supply chains have continued to become more complex,” said Gerhard Ziems, the chief financial officer from Pacific National. “This project is unique as it looks to re-imagine how the supply chain communicates and shares information. Simple access to this information provides us with an ability to better utilize our assets and provide customers with better, more efficient services.”
It isn’t the first time the CBA has tested blockchain technology. In 2016, the CBA and Wells Fargo successfully completed the first global trade transaction between two independent banks using a blockchain-based system. The recent almond-shipment project built upon the previous project and explored different trade-finance concepts. The ultimate idea is to combine different emerging technologies to reduce or eliminate any inefficiencies in international trade.
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