Indonesian Customs Adopting Blockchain-Enabled Platform from Maersk and IBM

Mar 2020

Indonesia’s Customs and Excise Department under the Ministry of Finance has announced the adoption of the blockchain-enabled TradeLens platform in Indonesia. The announcement follows several months of implementation since the department first announced it was joining the TradeLens ecosystem at the end of 2019.

TradeLens, which has been jointly developed by AP Moller – Maersk and IBM, is a digital global trade platform that enables more efficient and accurate container tracking and information sharing among platform members through blockchain. Each ‘block’ consists of data that is linked together in an immutable chain, selected information to be accessed, edited and shared amongst relevant parties, which ensures transparency, and also breaks down siloes. The platform digitizes formerly paper-based shipping processes, resulting in instantaneous and immutable end-to-end data and enabling an efficient supply chain with guaranteed accountability.

The Indonesian Customs and Excise Department is using a system called CEISA 4.0 (Customs Excise Information System and Automation) to bring together importers and exporters to collaborate and share information with logistics providers and bring down shipping costs. The system will enable authorities to receive shipping data as soon as containers leave the port of origin. This will give the Customs and Excise Department more time to prepare to receive shipments, thereby enabling more efficient and thorough fraud and forgery inspections as well as more consistent and transparent revenue collection processes.

High logistics costs are disrupting the flow of investment into the country. For example, neighboring Vietnam which is the preferred destination for Manufacturing shifting out of China, has lower logistics costs. The current expenditure for logistics accounts for 25% of the total production costs in Indonesia (10 to 15% higher than in Malaysia) and Indonesia ranked 46th out of 160 countries in the World Bank’s 2018 Logistics Performance Index.

The TradeLens platform has grown to over 100 member organizations including ports and customs authorities, freight forwarders and carriers. The Directorate is the third government agency in Southeast Asia to adopt Maersk’s platform, the other two being Singapore and Thailand.

(Sources: Trade Lens; Tech Wire Asia)

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