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14 December 17

How the Blockchain system will impact in the shipping world?

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SN 4The world of transport, and in particular the shipping segment,  are searching for new innovative solutions to make the operations more dynamic, clear and cheaper with the aim of reducing the costs and the time of the transport.

One of the main response arrives by Maersk, the biggest player together with MSC. Constantly at the search of new model of transport efficiency, the Danish firms, in collaboration with IBM  has designed and created  the Blockchain System.

The reason behind  is linked to containers themselves and the relative time of permanence of goods inside the different ports.

The key word in this case is Time, the biggest  enemies of every Shippers and Shipping Line Companies: during the history has been always a source of costs and both burocratic and private troubles.

If we examine the world-wide operation within an end to end delivery, we can understand easily  how normally is the loaded of a container on a ship in a matter of minutes, while a container can be held up in port for days because a piece of paper goes missing, while the goods inside spoil. The cost of moving and keeping track of all this paperwork often equals the cost of physically moving the container around the world.

In the September based of POC, the shipping cost $2,000 and the paperwork could be about $300, or 15 percent of the cargo’s value.

For Maersk, the problem was not tracking the familiar rectangular shipping containers that sail the world aboard its cargo ships — instead, it was the mountains of paperwork that go with each container.

Maersk had found that a single container could require stamps and approvals from as many as 30 people, including customs, tax officials and health authorities.

What’s more, the system is rife with fraud. The valuable bill of lading is often tampered with or copied to let criminals siphon off goods or circulate counterfeit products, leading to billions of dollars in maritime fraud each year.

How Work the Blockchain System ?

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The Blockchain system is well represented by the upper chart. The first goal is to allow the access to a coded and shared database that will be used for the first time in the maritime field.  It is based on peer-to-peer technology (anyone can pick it up or share it): an electronic archive where all movements are recorded. In case of electronic finance movement are highlighted the historical transit, while in the transport are represented the movement of goods. Shared, yes; Writable, yes; Can be modified, no. The strong point is the impossibility of falsifying it by manually modifying. A public “accounting book” has the object of register the operations autonomously.

Working closely with Maersk for years, we’ve long understood the challenges facing the supply chain and logistics industry and quickly recognized the opportunity for blockchain to provide massive savings when used broadly across the ocean shipping industry ecosystem,” said Bridget van Kralingen, senior vice president, industry platforms, at IBM.


The Customs Benefits

At the moment that the Customs upload a copy of a signed document approving a container to the blockchain, everybody involved would be able to see it. They could just check the blockchain if anything seems amiss instead of digging through mountains of paperwork. Thus far, the company has already used IBM’s technology to ship flowers from Kenya, oranges from California and pineapples from Colombia. But it could take the shipping titan five to ten years to be able to fully deploy its use, considering all the people and channels it typically deals with. For the system to work, all the clients and customs authorities in every country along the way should be on board.

The Blockchain is destined to change the face of the transport world. The concept of dematerialization of the entire documents chain provides to the different shipping lines and shippers the opportunity of decrease the level of costs related to the transport saving, also in terms of paper for the thousands of document presented to the different authorities and actors.


Questions for the future

Considering the ‘Petya’ Cyber Attack  the next questions will be how to face the issue of the cyber security in order to make this new approach reliable?

Will other Shipping Companies decide to utilize this system or an analogue to insert their documents and booking?

The Blockchain System will become a standard for the maritime field?

Source: On the MoS Way