U.S. electric car manufacturer 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.
The pilot, which was conducted in December, used blockchain to share relevant shipping data and documentation among concerned parties, including Tesla. Access to shared data source streamlined the entire process and enabled the California-based car maker to “accelerate its cargo pick up procedures on a trusted and secure platform,” according to CargoSmart.
Wu Yu, head of COSCO’s logistics division, said the pilot “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.”
The cargo release process refers to when the shipping operator hands over goods at the end of the journey. To avoid confusion and theft, clients need an original bill of lading or waybill – similar to a receipt – that operators use to verify identities and release cargo.
Usually fairly seamless, the cargo release process can grind to halt if an OB/L or waybill is lost or corrupted. Without them, operators can’t hand over goods. This creates delays across the supply chain and can lead to heavy fines from port authorities to any ships found overstaying their time in dock.
Following the successful pilot, CargoSmart said it would work to trial the blockchain app in other Asian ports including in Qingdao, China, and in Laem Chabang, Thailand. The company further aims to create a consortium, owned by shipping operators, who will run and administer the distributed ledger system.
The announcement doesn’t say much about the type of blockchain used in the pilot, nor the sort of goods Tesla imported into China. Tesla has factories in the country – including one in Shanghai – it uses to build batteries and assemble its cars.
According to the Los Angeles Times, Chinese officials have been quick to provide supplies the company needed to recover quickly from the coronavirus outbreak earlier this year. As Bloomberg reported, Tesla has quietly focused its energies in China and could be about to release a new long-range auto specifically for the Chinese market as early as this week.
It’s unclear whether Tesla has any plans to continue using blockchain technology to import its goods into China or any other country. CoinDesk approached the firm for comment but had not received a response by press time.