Maersk Incorporating Blockchain
It currently takes a stack of 200 communications between 30 different parties to ship a container from Mombasa, Kenya to the Port of Rotterdam, according to a recent study by shipping carrier Maersk.
With each additional piece of paperwork, the risk of fraud, miscommunication, and delay increases. To combat this barrier to trade, Maersk is partnering with IBM to incorporate blockchain distributed ledger technology into its shipping process.
By allowing all parties in the global shipping supply chain to share information through a digitally secure distributed ledger, blockchain technology could revolutionize the maritime logistics space, eliminating the complex current system of disparate, expensive and time-consuming paperwork.
Maersk and its six largest ocean shipping competitors together hold more than 50 percent of global maritime container shipping market share. Even if only these companies implement blockchain into their operations, it could significantly increase the speed of international trade, while also boosting transparency and reliability into the notoriously opaque container shipping industry.
Blockchain integration could also affect other players along the supply chain including trucking companies, freight forwarders, brokers, importers, exporters, manufacturers, brands, retailers, and beyond. The potential significance of blockchain integration has attracted increasing media attention in recent years.
Other global supply chain players, beyond maritime logistics, are also showing an interest in blockchain. In August 2017, Walmart, Kroger, Nestle and Unilever, among others, partnered with IBM to use blockchain to improve food safety through improved supply chain tracking.
While blockchain integration by these specific vendors could speed up their individual supply chains, blockchain adoption by maritime logistics companies, which help transport 90 percent of globally traded goods, could have a much further-reaching effect.
Maritime logistics players rush into blockchain
Beyond speeding up trade, blockchain has other applications in maritime logistics, spanning areas like cybersecurity, marine insurance, and seaport-related operations.
Prominent players in the space, such as shipping carriers and port operators are exploring these use-cases by partnering with large corporations, blockchain startups, and consortia of independent companies or entities partnering to use blockchain technology.
Some of the partnerships recently entered into can be grouped into the following categories:
Trade efficiency: In March 2017, Maersk partnered with IBM to integrate blockchain technology into its supply chain and shipping processes. As discussed above, partnerships like this have the potential to impact global trade by reducing complications in communication.
Marine insurance: In September, Maersk also partnered with blockchain startup GuardTime, corporates Microsoft and EY, and insurance companies ACORD, Willis Towers Watson, MS Amlin, and XL Catlin to launch a marine insurance blockchain platform. The platform simplifies marine insurance, a space also plagued by disorganized communication.
Cybersecurity: In August 1017, UK-based logistics company Marine Transport International partnered with distributed ledger technology company Agility Sciences to create a blockchain-based cybersecurity solution for the maritime logistics space. This partnership comes after Maersk suffered a major cyber attack on its information technology systems, causing a significant operational slowdown.
Port operations: In June of last year, the Port of Antwerp partnered with blockchain startup T-Mining to improve safety and speed of container handling.
In August of last year, Singapore-based port operator PSA International partnered with shipowner Pacific International Line and IBM to leverage blockchain to increase transparency in port operations.
Most recently, the Port of Rotterdam partnered with the Municipality of Rotterdam to create “BlockLab,’’ an initiative focused on researching new applications for blockchain in the maritime logistics space.
Trade-focused consortia: As blockchain consortia have gained traction, trade- and logistics-focused consortia have emerged. In August of last year, shipping carrier Mitsui O.S.K Lines (MOL) announced its plan to join a trade-focused consortia headed by NTT Data Corp.
Other Blockchain Startups
In addition to the companies mentioned above, other blockchain startups have the potential to impact the maritime logistics space going forward. For example, Wave connects disparate players within the shipping supply chain to bolster paperless communication, which can mitigate miscommunication, delays and fraud. The startup received $120K in funding from Barclays Accelerator in 2015.
300Cubits, a Hong Kong-based startup, recently conducted an initial token sale of a new cryptocurrency dubbed “TEU,” which could change the way players in the maritime logistics industry create contracts and pay for services.
While full blockchain adoption in the maritime logistics space is in a nascent stage, its potential impacts on efficiency and security are a driving force behind many partnerships forged over the last year.
Blockchain’s integration into maritime logistics has the potential to impact the international economy, affecting everyone along the global trade supply chain — from suppliers and importers to retailers and brands, and ultimately even consumers.
(This article first appeared in CBInsights)Follow & Contact Tank Transport Trader: