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By Pooja Kadia
The list of automotive companies leveraging blockchain technology to effectively manage their operations certainly seems to be growing. After BMW, Ford, General Motors, and Group Renault; Tesla also plans to implement blockchain technology.
Recently in April, Tesla partnered with CargoSmart Limited led a blockchain-based project along with the Shanghai International Port and (SIPG) and China Ocean Shipping Company (COSCO) for Tesla to track its cargo shipments.
From Maersk to TradeLens, blockchain is currently being used by a number of companies to streamline their supply chain processes. In a recent project, the automotive giant- Tesla tested blockchain technology as a part of its operations in importing parts to its Shanghai factory.
By leveraging blockchain, the project aims to streamline the supply chain processes for its cargo shipments. SIPG and COSCO collectively tested a blockchain app to enable access to a shared database that further assisted in shortening the cargo release time once the shipments were offloaded.
Moreover, by sharing all the relevant data in real-time with Tesla through blockchain, facilitated speedier deliveries for the automotive giant. It further accelerated the pick-up procedures for cargo and assisted with efficiency in their supply chain process. This pilot demonstrated the benefits of having a single shared truth with the industry participants and the real-time exchange of data.
As per a statement by COSCO, this pilot is amongst the first of many projects that are conducted on a blockchain platform. Henry Huang, the Executive DGM of Operation & Business Department of SIPG revealed:
“The pilot is a key component of our journey towards paperless, trusted, and seamless trade processes at the Port of Shanghai, and it demonstrates the benefits for supply chain stakeholders around the world. We look forward to extending the collaboration with more supply chain stakeholders to render extraordinary service to our community.”.
As per a report published by Allied Market Research, the blockchain industry for the automotive market generated nearly $428 million in 2020. Further, research from key players working in this domain suggests that this figure is set to climb $5.6 billion by 2030. The two main reasons cited for this growth of demand for blockchain in the automotive sector include protection against manipulation and leak of critical data as well as faster transactions.
Moreover, one of the worst-hit industries due to the Coronavirus pandemic is the global automotive sector. Along with the rise in cyberattacks and hacking incidents, the push for including modern innovations like blockchain into their traditional processes has been further uplifted.
Leading players like BMW have already tested the technology and now the company plans to launch its own blockchain named the PartChain for efficient deployment of shipments on a decentralized ledger. Another automotive player Groupe Renault has also identified blockchain as a key factor in enhancing collaboration in the automotive industry.
By seeking blockchain, Tesla also seems to be recognizing the potential of the tech for its supply chain process. Although the pilot project is a success; the company has yet not given any confirmation on its plans to deploy blockchain for its future activities. The successful collaboration has opened doors for all the stakeholders to join hands in the future in the supply chain management ecosystem.
Article produced by Pooja Kadia
