KTNET Plus

The Digital Trade Platform opened on 15th

Real-time transport visibility without documentation;

Significantly reduced data processing time from one hour to 10 minutes;

Reduced annual logistics costs by KRW 57.1 billion, such as delivery charges, etc.

CEO Young-hwan Cha affirms, “Expanding overseas services.”

International trade is a fight against required proper documentation. Not a single box can cross the border without documents proving the transportation, shipment, and payment of goods. So far, the traditional means of delivering documents necessary for trade have been email or fax. Documentation process was time-consuming, and information would be omitted or counterfeited. The new alternative offered by the industry is “digital trade” based on blockchain, which can prevent document mishaps and can provide customized customs clearance services for each company.

Increase Transparency in Trade Transactions with Blockchain

The Korea Trade Network (KTNET) will open the first “blockchain-based import & export and inland transportation platform” in Korea on the 15th as part of the blockchain-led pilot project with the Korea Internet & Security Agency (KISA). If a trading company signs a trade contract on KTNET's blockchain platform, the contracting parties will be able to check all cargo transport information in real time. This is the first time that trade has used the blockchain.

KTNET, a subsidiary of the Korea International Trade Association, is a national e-trade based operator established in 1991 to automate import and export operations online. As of this month, it is providing e-trade and logistics services to about 100,000 trading and logistics companies. All processes of complex import and export business activities are online based on electronic documents.

With the introduction of e-trade, it has become possible to fill out documents and make payments without visiting trade-related institutions, but blind spots still remain. Numerous documents, including cargo delivery orders (D/O), are sequentially delivered to shippers, forwarders (transportation agents), carriers, and bonded shed (CFS) in person by email, or by fax. The industry estimates that annually 2.6 million imported shipments are processed based on manual documents. The related costs alone totaled KRW 61.6 billion (KRW 39 billion for delivery fees & KRW 22.6 billion for labor costs).

“Expand to Global Trade Services”

When a D/O requested by the shipper is uploaded on KTNET's blockchain platform and the forwarder approves it, the approval result is immediately shared with the shipper and the bonded shed. Forwarders may share customs information with carriers. Carriers can also shorten cargo handling time by registering vehicle and driver information in the bonded shed.

KTNET explains there will be no issues where an import shipping merchant calls the forwarders directly to check the status of their cargo handling or cargo is mistakenly transferred due to misunderstanding the driver's information.

KTNET expects that if the blockchain system is applied to the entire trade transaction, the processing time for cargo handling will be reduced from the current 1 hour to 10 minutes. Direct cost savings, such as delivery fees and labor costs, are also expected to reach KRW 57.1 billion per year.

Young-hwan Cha, CEO of KTNET, (pictured) presented the 'Global Trade Logistics Electronic Document Distribution Service' as the next step. The plan is to expand the use of blockchain services to overseas logistics companies.

The targets of most e-trade services that KTNET has introduced for 30 years have been domestic customers. The industry predicts that if blockchain technology is applied to global trade transactions, USD 3 trillion (about KRW 3538 trillion) in added value will be achieved by 2030.

CEO Cha explained, “We can only survive in the trading industry by developing new services, quickly adapting to changes,” adding that, “Our goal is to provide customized trade services to each company in all areas of customs clearance, logistics, authentication, and security.”