The world’s marine industry giants have long been regarded as conservative, set in their ways and resistant to change. Yet, if recent blockchain-related developments are anything to go by, it seems nothing could be further from the truth.
In many parts of the world, shipping is seen as an industry on the decline. However, some say, blockchain pilot schemes are now helping breathe new life into the marine trade.
But where exactly does blockchain come into the shipping equation?
Well, for a start, it could help resolve eliminate document fraud cases and potentially reduce the need for costly dispute arbitration. In an industry plagued by fake agents, fake documents and even fake goods, blockchain’s immutable ledger system has the potential to kick fraud into touch for good.
In fact, when you think about it, cargo tracking is actually a fairly intuitive use for the blockchain. Maersk, the world’s biggest container ship and supply vessel operator, claimed back in 2014 that intercontinental shipments often require “mountains” of paperwork, with “processes involving nearly 30 people and organizations,” and comprising “up to 200 different interactions.” With blockchain technology, however, Maersk says it will be able to ditch paper documentation altogether and allow all parties to participate in an immutable digital ledger system instead.
Indeed, developments like these could, in theory, allow every party involved in the process to check on the status of a shipment at any point in the process – representing a very serious upgrade in both reliability and efficiency.
All hands on deck
Last year, British cargo management specialists Marine Transport International claimed to have developed the world’s “first public blockchain solution in the global shipping industry,” in association with a London-based data science company.
Maersk has recently begun tracking freight using the technology, and its rivals are also banking on blockchain.
Hyundai Merchant Marine (HMM), one of South Korea’s biggest shipping powerhouses, has claimed its maiden blockchain voyage was a success. The company earlier this month sent a refrigerated container shipment from the Korean port of Busan to Qingdao, on the east coast of China. HMM says it was so pleased with its handiwork that it now plans a second blockchain-powered shipment in October, with a view to expanding its usage of the technology on routes to India and Thailand.
Indeed, HMM earlier this year joined forces with Samsung affiliate Samsung SDS and the South Korean government in a shipping logistics consortium that aims to make extensive use of blockchain technology. The government is keen to introduce a new-found efficiency into marine enterprises following a series of bailouts. And as marine enterprises make up for some 33 percent of South Korea’s export economy, ministers hope that a blockchain-powered boost will help breathe new life into the industry.
In nearby Japan, several of the country’s biggest shippers – including Nippon Yushen (one of the oldest shipping companies in the world) – have recently formed their own 14-company consortium. Its members claim they are seeking to develop a Japanese trade data sharing platform
Port of call
Government bodies are now showing signs of an eagerness to board the blockchain boat. The Danish Maritime Authority’s new blockchain-powered pilot scheme could soon revolutionize the way ship owners register their vessels with Denmark’s marine authorities, potentially digitizing the entire process. The country’s industry minister says the blockchain initiative has the potential to keep costs down and boost trust in the shipping industry.
And several port authorities, particularly in Northern Europe, have begun working on their own blockchain-powered management platforms. These include the Port of Rotterdam, the biggest shipping port in Europe. Rotterdam’s venture was launched in association with the Netherlands’ Delft University of Technology and, its project manager claims, “This involves more than just talking about possibilities – we are really going to apply the technology.”
The Port of Antwerp, in neighboring Belgium, is following suit. The port (Europe’s second largest after Rotterdam) is aware that “fifty percent of the costs of cargo transport” is taken up by paperwork, and is now trialing a blockchain platform. The project is being undertaken by tech startup T-Mining, whose CEO claims, “Our ambition is to serve our first paying customers by the end of 2017.”
And with an office in Singapore, provided by Antwerp city authorities, the port’s blockchain platform could well soon end up with a foothold in Asia, too.
Meanwhile, elsewhere in Asia, thinkers in Malaysia have proposed using blockchain technology to manage smaller so-called Less Container Load (LCL) shipments in China’s ports, where small-scale cargo handling is often “complicated and inefficient.”
Full steam ahead
Many warn that it will not all be plain sailing for the shipping industry’s blockchain pioneers. Earlier this year, Ari Marjamaa, Chief Transformation Officer of logistics experts WWL, warned that blockchain would be “no silver bullet” for the shipping industry. Marjamaa said that without “open standards and industry-wide collaboration,” blockchain ventures could soon run into troubled waters.
Regardless, in the past few weeks, there have been more exciting developments. Maersk has gone on to announce a new blockchain-powered insurance platform with consultants EY, who claim the new offering is a “world-first.” Others, meanwhile, are claiming that blockchain could help shipping companies guard against ransomware and other cyber-attacks.
With the likes of Maersk, HMM and Europe’s two biggest ports already onboard, the blockchain ship seems to have already set sail for this industry – and time will soon tell us how successful these promising maiden voyages have really been.
This is part of the “Blockchain and Industry” series by Tim Alper. Want to see more? Check out:
Featured image from pexels