automotive assembly

Blockchain Reduces Shipping Costs for Auto Suppliers

"Blockchain is one of the most promising technologies in logistics. It has the potential to digitalize many of today’s paper-based processes and overcome the multitude of different interfaces," said Martin Kolbe, CIO of Kuehne + Nagel.

It seems not a day goes by that blockchain technology is improving business efficiency.  This time it’s the auto industry that will benefit from benefit from ability to eliminate printing shipping documents.

A consortium comprising AB InBev, Accenture, APL, Kuehne + Nagel and a European customs organization has successfully tested a  solution where documents are no longer exchanged physically or digitally but instead, the relevant data is shared and distributed using blockchain technology under single ownership principles determined by the type of information.

Through a detailed review of the current documentation processes, the group examined a re-allocation of information ownership, accountability and risk enabled by the trust and security blockchain technology offers.

“Our trials have proven the viability of a shipping process in which many documents can be replaced by secure and distributed data sharing with clear and defined ownership,” said Axel Schmidt, who leads Accenture’s Automotive industry practice. “This gives automotive companies a significant opportunity to save time and money while improving their service to customers.”

The consortium, which represents typical stakeholders across an international shipment, collaborated to test 12 real shipments, with various destinations, each with different regulatory requirements. The tests confirmed that blockchain can reduce operating costs and increase supply chain visibility

An international shipment of goods for companies in the automotive industry typically requires more than 20 different documents, many of which are often paper-based, to enable the goods to move from exporter to importer. Across these documents, up to 70% of the data can be replicated.  The document heavy approach limits data quality and real-time visibility to all parties involved in the trade and this can also delay the financial settlement on goods.

The solution can speed up the entire flow of transport documents, reduce the requirement for data entry by up to 80%t, simplify data amendments across the shipping process, streamline the checks required for cargo and reduce the burden and risk of penalties for customs compliance levied on customers.

Martin Kolbe, CIO of Kuehne + Nagel International AG, said, “As part of Kuehne + Nagel’s digitalization strategy, we explore innovative technologies to create benefits for our customers. Blockchain is one of the most promising technologies in logistics. It has the potential to digitalize many of today’s paper-based processes and overcome the multitude of different interfaces. From our perspective, the open and collaborative approach applied in this project is key to gaining traction in the industry and the required market acceptance.”

 “We continually evaluate new technologies and innovations to enhance our operations to meet consumer needs and deliver the freshest beer,” said Danillo Figueiredo, VP of International Logistics, AB InBev. “Blockchain technology will be transformational to our business and the world. It reduces mistakes, digitizes information and improves the supply chain process so we can focus on our core business of brewing the best beers for consumers.”

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