Too Much Paperwork!
NEDO, a Japanese government-controlled organization intends to improve the trade information sharing in the country. They have partnered with the Japanese IT giant NTT Data to develop a blockchain trade platform.
Japan oozes excellence. When you think of Japan, quality electronics, reliable automobiles, and advanced robotics come to mind. Japanese businesses are famous for their efficiency, therefore, you might be surprised to know that not all businesses are as efficient.
Many businesses in Japan haven’t invested in digital technologies enough. These companies still use paper-based systems to share trade information, hence they need a high manual effort. Some businesses have implemented limited digital technologies. However, even they share their trading information using PDF files as attachments.
Not only does this require a high amount of manual entry, review, and data correction. There is a high amount of manual intervention, consequently, these are costly processes. The archaic processes also introduce a delay in the system. Trading information sharing is an important cog in the weel, therefore, the delay has an adverse impact on the trade.
International trade anyway involves many stakeholders, such as logistics providers and customs authorities. The costs of manual data entry and review are high, furthermore passing of papers and attaching PDF files take longer. With a large number of stakeholders, this suboptimal process has a magnified impact on international trade.
Japanese businesses need a secure trade information sharing platform. They need instant information sharing, furthermore, they also need an audit-trail. This is where the blockchain technology can make a difference.
The “New Energy and Industrial Technology Development Organization” (NEDO) is a public management organization. They promote research and deployment of industrial technologies. They have analyzed the drawbacks of the current process, hence, they decided to use blockchain.
Blockchain to the Rescue
NEDO and NTT Data have started their work on a blockchain trade platform in 2016. It was a demonstration project initially. Together, they built a trade information collaboration infrastructure system. It covered many stakeholders like importers, exporters, customs brokerage, etc. They focused on securely storing the information.
They developed APIs, as a result, stakeholders could easily connect to the platform. Many large businesses had their own digital systems, however, some small and medium businesses didn’t. The APIs allowed the small and medium businesses to easily utilize the platform.
NEDO and NTT Data are working with customs authorities to establish data collaboration processes. They will start the demonstration phase for overseas businesses in Q1 2019. They will formulate data standards and data sharing rules, finally, they will implement the infrastructure in 2019.
NEDO is part of the Japanese Ministry of Economy, Trade, and Industry (METI). This blockchain trade platform project reinforces Japan’s positive view of the blockchain technology. NTT Data is the largest IT system integrator in Japan. Nippon Telegraph and Telephone (NTT) has a partial ownership stake in it, however, NTT Data is a publicly traded company.
Global trade information and logistics management are increasingly becoming important blockchain use cases. For e.g., the US Customs and Border Protection are starting to test the technology for operational improvement. In another example, American logistics giant UPS plans to use blockchain to upgrade their global logistics.
