U.K.-based Marine Transport International, a freight forwarder company, has begun to offer shippers the use of blockchain for their digital ledger data, as the platform sees adoption beyond the financial services sector.
Among other things, the company says blockhain will remove much of the bureaucratic waste and costs associated with the communication of supply chain- and ledger-related information for those doing business with the container shipping industry.
Blockchain is a very new and powerful technology, and remains largely understand for the time being as the bitcoin currency platform. For the shipping industry, the platform offers a good potential fit as a way to make transactions and record keeping faster, easier, cheaper, and safer, its proponents say.
“Blockchain represents a grassroots transformation of how shippers will collect and store information,” Jody Cleworth, CEO for Marine Transport International, said. Those who ship electronics and other components by container ships, which is used to transport over 90% of all trade worldwide, are tasked with communicating and recording notoriously large and cumbersome amounts of detailed bill of lading and other information. Besides maintaining archives subject to audits, they often must send this information to various parties, ranging from port management companies to customs officials, often around the world. The current bill of ladings system, which many say is antiquated, is often subject to fraud and counterfeiting, while blockchain’s communications are encryption-protected.
Blockchain can also be used by shippers to adhere to increasingly strict cargo labeling regulations, such as the International Maritime Organization’s SOLAS (International Convention for the Safety of Life at Sea) treaty.
“Blockchain’s data structure makes it possible to overcome many regulatory and other issues, creating a permanent digital public ledger of transactions that can be shared among a distributed network of computers,” Cleworth said. “Blockchain will allow shippers to post bill of laden and other information much more rapidly, simply, and securely in a process-driven manner.”
Software is also available that can be used to store new verified gross mass-related data on the global blockchain, “providing a permanent records visible to port officials, shippers, and cargo owners,” Cleworth said.
“Blockchain replaces cumbersome logs, spreadsheets, data intermediaries, and private databases. Previously, data has been deeply ingrained in old legacy systems,” Cleworth said. “This causes delays in the development of new capabilities, hindering the ability for carriers to make rapid changes to services.”
Blockchain will likely benefit supply chains outside of the shipping industry. Internet of Things (IoT) devices, for example, will be connected to blockchain records for instant access, Cleworth said. “As this technology progresses in the supply chain arena, we can expect to see the democratization of assets, which could bring a new working dynamic to all actors in the supply chain,” Cleworth said.
The main end result will be the removal of many of the third parties and IT infrastructures that shippers must currently rely on for shipping transactions. “It will allow companies to build efficient business ecosystems between supply chain parties and actors in the public blockchain,” Cleworth said. “The blockchain will also accelerate the flow of data distributed between parties, while at the same time reduce reliance on the typical IT architecture that plague companies today.”
Observers have also noted how players in other industries are beginning to see how blockchain can offer a real-time, transparent, and inexpensive platform for their transactions and other records.
“Sectors such as banking and financial services technologies are attracting a lot of attention for their steps to adopt blockchain,” Antony Abell, managing director of blockchain software provider TrustMe, said. “But what we have here is an example for the shipping industry leading the way in executing a real, proven application of blockchain. We’re incredibly excited to be at the forefront of this development.”
Let us know how you think blockchain will impact the supply chain and logistics in the comments section below.