In an attempt to enhance security and efficiency of freight transportation within its port system, the port of Veracruz, Mexico, has contracted blockchain logistics company dexFreight to develop a proof-of-concept project for a blockchain port community system.
DexFreight is a blockchain startup that aims to transform freight and logistics using distributed ledger technology (DLT). Its decentralized logistics platform envisions an ecosystem of open source protocols, blockchain and machine learning technologies that allow the shipping lines and related businesses such as manufacturers, brokers, banks, insurers and port authorities to directly connect, negotiate rates, and schedule pickup and delivery.
Blockchain Port Community System
According to the press release, the partnership will be led by dexFreight and Texas A&M Transportation Institute (TTI). It is reportedly the first of its kind in the Americas. The goal is to develop a blockchain-driven port community system (PCS) for improving the efficiency of freight and logistics at the port as well as optimizing and streamlining the carrier onboarding processes.
As part of the agreement, dexFreight will build a web-based solution to be tested by four stakeholders — Mexican Customs Agency, Hutchinson Ports (ICAVE), the Customs Brokers Association, and the Port Authority of Veracruz. The stakeholders will use the platform to share information and other legal documents and report back on the benefits of blockchain and the challenges they face using such a system. The World Economic Forum estimates that improving communications and border administration using DLT could generate an additional $1 trillion in global trade. Should it succeed in improving accountability and transparency among the involved stakeholders, it will be implemented on a larger scale to connect the port community system with related businesses worldwide such as banks, software providers and insurers.
The Port of Veracruz in Growth Mode
Last year, the Port of Veracruz moved over one million twenty-foot-equivalent units (TEUs), making it the third largest port in Mexico, and the authorities expect the capacity to reach five million TEUs by 2030.
Juan Ignacio Fernandez, director of Veracruz Port Administration reiterated the benefits of bringing DLT to port community systems stating that blockchain “adds openness, neutrality and transparency to the PCS”.
Baruc de la Fuente, Administrator for Veracruz Customs Agency explained:
“The project and the PCS are critical in improving trade efficiency at the port and being competitive. The aim of the PCS is to reduce the time and effort it takes to securely export and import containers through the port and provide much better service to the private sector customers.”
The partnership with the Port of Veracruz comes after dexFreight completed its first truckload shipment using smart contracts by shipping 5,320 pounds of frozen food from Medley to Sunrise, Florida.