Two of the world’s busiest ports, Shanghai and Guangdong, will be the first to benefit from new digital supply chain technology backed by artificial intelligence (AI) and blockchain thanks to a new joint venture (JV) agreement.

APMEN Trade Tech has joined hands with US technology firm Ideanomics to streamline ports in the Asia Pacific using the new technology for Asia-Pacific Economic Cooperation’s (APEC) online port clearance system, Asia-Pacific Model Electronic Port Network (APMEN).

Ideanomics will hold a majority interest of 60% in the JV, with APMEN expected to launch the operations as soon as possible in Shanghai and Guangdong (including seven ports), which account for nearly half of China’s input and export.

Shandong held the title of the world’s busiest port in 2017 when it handled 40m twenty-foot equivalents (TEU) of cargo. The total value of import and export goods of Shanghai and Guangdong ports combined is US$1.53trn, up 13% year-on-year.

The full implementation of connecting e-ports across the region is expected to save up to half of supply financing cost, which is currently 16%-25% in China.

The joint venture will build and install exclusively the Ideanomics recommended supply chain finance blockchain to bring banks and financial institutions as lenders and customers together by eliminating layers of middlemen currently causing unusually high annual interest rates often exceeding 20%.

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It will employ blockchain to extend connectivity beyond from port to port, and custom to custom to include the final buyers and sellers. Additionally, it plans to establish and increase asset-backed securitisation from the operation by securing high yield assets.

The move marks the continuation of a growing trend in the blockchain sector, with a raft of major corporations aiming to disrupt legacy supply chain infrastructure with the technology’s introduction.

There is also a growing interest in using technology at ports for greater efficiency. A pilot project launched at the Port of Long Beach recently aims to enhance advance planning, utilising software to access data that will allow them to move cargo containers more efficiently.

“We are excited to deliver a never seen before intelligent supply chain management platform driven by blockchain and super artificial intelligence technology,” says Bruno Wu, chairman and co-CEO of Ideanomics. “We will integrate business data from various partners, establishing a risk control model in cooperation with a single window to provide risk control services for regulatory authorities and enterprises.”

So far, 16 ports and e-ports from 11 APEC member economies have joined APMEN. These include: New South Wales(Australia), Vancouver (Canada), TradePort, OnePort, GLSHK (Hong Kong China), Port of Klang (Malaysia), Port of Manzanillo, Port of Lázaro Cárdenas (Mexico), Peru, Shanghai and Xiamen (China), Kaohsiung (Chinese Taipei), Hai Phong, Ho Chi Minh (Vietnam), Lirquen and Coronel (Chile), Cebu (Philippine).

“The full implementation of connecting e-ports across the region using the Ideanomics supply chain finance blockchain will save more than just trading costs and time,” adds Dr Liu Yadong chairman of APEC Model E Port Network. “By leveraging the expertise of Ideanomics for their best in class intelligent supply chain services and super artificial intelligence technology we are advancing trade facilitation and our supply chain connectivity.”

The joint venture plans to list on a Chinese stock exchange within 2018.