Blockchain creates security, visibility in cross-border trade
By Cuneyt Yetgin | 2 minute read | September 12, 2019
Time is money in the import-export business. When shipments are delayed due to missing, overdue or non-compliant documentation, companies lose money.
Güler Dinamik works with global companies to facilitate cross-border trade with Turkey. The company helps importers and exporters deal with the many facets of trade compliance, including providing timely documentation to the relevant authorities and to trading partners. Creating alignment and precise timing among all parties in the trading chain is critical. And it’s difficult to achieve.
The IBM Garage: building a trading blockchain
A couple of years ago, the founder and CEO of Güler Dinamik and I read an article about how IBM helped create a blockchain network with a major shipping company. We knew that this was the technology solution we’d been seeking for many years to help provide compliant trade options to our clients.
IBM helped us set up an IBM Garage workshop in Istanbul, where they heard our story and confirmed that we had a good use case for blockchain. We then conducted a “minimum viable product” (MVP) development project together with a couple of our business partners and IBM. The agile methods that IBM used on this project proved extremely useful in helping us understand the work ahead of us, and how we can resolve many typical trade issues with blockchain technology.
Wanted: a consortium of blockchain participants
You can’t build a blockchain with out a consortium of clients that want to participate. Several of our clients had already read about the technology. Many of them are managed by people who have an IT background, so that helped us when we approached them about blockchain.
Some of our key participants include a major electrical company, which is also part of the original IBM Blockchain pilot, a large German logistics company, and a Turkish state bank. The bank handles many of the duties and customs involved in our business, so they were very keen to be part of the consortium.
Visibility and security: the benefits of blockchain in cross-border trade
We’re now building our blockchain and expanding our consortium. We anticipate many benefits, both to us and to our trading partners and clients. Our Blockchain Trade Platform provides a single point of truth and end-to-end visibility. We know who is doing what and when, so if there is a bottleneck somewhere we can pinpoint it and try and find a solution to eliminate it and get the goods flowing again, which means our partners aren’t losing money waiting for their goods to ship or to arrive.
The blockchain network will enhance trust among the parties and help reduce fraudulent transactions. You see, without blockchain technology, it’s almost impossible to have 100 percent security to prevent document fraud in our business.
Using blockchain will also facilitate paperless trade, which improves our green footprint. Many of the government entities we deal with are planning to go paperless, so we can be compliant with their efforts. This also improves our efficiency and can reduce costs both for us and for our trading partners because we save on administrative activities and can pass those savings on to our clients.
Watch Cuneyt Yetgin discuss how using IBM Blockchain enables their product Blockchain Trade Platform to facilitate cross-border trade: