Blockfreight, a solutions provider aiming to produce the world's first end-to-end blockchain or distributed ledger technology solution for the global cargo shipping industry, is looking to dovetail its offering with letter of credit (L/C) processing.

This is yet another development in the apparent race to successfully apply distributed ledger technologies to international trading systems and transactions.

Matching L/Cs

Blockfreight says it is working to develop an end-to-end blockchain solution to the main issues in the present-day shipping systems.

One issue it says it has a solution for is matching up of bills of lading with L/Cs and other settlement mechanisms.

Methodology

According to Blockfreight, its solution consists of three key elements. The first comprises smart contracts that securely and permanently define the bill of lading, terms of payment and other key elements in a completed cargo shipment.

The second is a tradeable token designed as a counterparty asset, which is secured by the bitcoin digital currency blockchain, which pays for the transaction fees.

The final element is a storage facility for the bill of lading and other documents too large to fit into a bitcoin block.

Other players

Other start-ups looking at applications of blockchain technology in international trade include SkuChain, which wants to tap the market for trade finance for small- and medium-sized businesses by removing the need for L/Cs.

Several banks and technology partners have recently announced progress applying distributed ledger technology in trade finance operations (DC World News, 22 and 30 August; 2 and 12 September 2016).

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.