Samsung pilots world’s first blockchain-based customs service

Blockchain innovations have disrupted a wide range of industries in recent years – from domestic utilities and concert ticket sales, to medical record keeping, wearables and farming supply chains. But one practical application developers have yet to fully demonstrate is blockchain’s ability to automate and streamline the international customs process.

That’s about to change after Samsung announced a new partnership this month that will effectively establish the world’s first blockchain-powered customs service.

Samsung SDS, an information technology subsidiary of the South Korean multinational, has signed a memorandum of understanding with the Korea Customs Service and a consortium of 48 other shipping companies, insurance providers and government bodies with a view to leverage Samsung’s Nexledger platform to implement a new customs system capable of drastically improving fraud prevention and making processes quicker and more efficient.

According to the consortium, that potential was already proven in May after a Nexledger shipping pilot project saw Samsung SDS offer access to its proprietary blockchain platform to a trial group of 38 companies, public bodies and research institutions including South Korea’s Ministry of Oceans, the Busan Port Authority and Hyundai Merchant Marine.

By deploying Nexledger, pilot participants were able to better track imports, exports and the locations of cargo shipments thanks to Samsung’s scalable contract management system. Likewise, by utilising Nexledger’s standardised entries that have been recorded on the decentralised shared ledger, South Korean customs officers should now be able to swiftly spot document forgeries, identify and validate authentic paperwork and bolster security authentication through Samsung’s contract documentation encryption.

In turn, parties involved in the consortium are clearly hoping the partnership will be able to strengthen mutual trust between shipping companies, port authorities and government bodies, expedite the trading process and establish higher levels of transparency.

Samsung and the Korea Customs Authority haven’t wasted any time in putting their new system to the test.

Last week, container line Hyundai Merchant Marine completed its first shipment from Korea to China using Nexledger technology – which saw authorities place sensors on temperature-sensitive containers in order to allow multiple supply chain parties to monitor and control the shipment in real-time. The shipment’s certificate of origin and customs clearance documents were also encrypted and pre-recorded on the blockchain’s decentralised ledger, allowing for the eradication of paperwork and a smooth entry into port.

In the wake of that successful initial run, Hyundai has said it plans to complete its next blockchain-powered voyage in October.

Although Samsung is positioning this consortium as the world’s first-ever blockchain customs service, it’s worth pointing out the Korea Customs Service is hardly the first government body to experiment with the ways in which blockchain technology can further evolve the global shipping industry.

Last year, IBM struck a partnership with the Singaporean shipping giant PIL and the Port Authority of Singapore to test the ways in which IBM’s proprietary Hyperledger Fabric platform could further unite trade finance transactions with supply chain logistics in order to further streamline transnational shipments.

IBM also teamed up with Danish shipping conglomerate Maersk in 2017 to carry out trials on a similar end-to-end supply chain system that will also be powered by Hyperledger Fabric. Those successful trials have since given way to the creation of TradeLens, a new supply chain platform that was announced in January.

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