The Maritime Industry is the leading transport sector, considered to be the cornerstone of globalisation. It is regarded as a vital sector of the economy, consisting of a wide variety of activities in diverse ways. Carriage by the industry of international shipping exceeds 90% of the world trade. In the European Union, 90% of its international trade processes involves cargo transportation by sea with 30% of the trade conducted by the European Union.
Although the Martitime industry’s contribution to the economy of each country is large and important, it remains an outmoded industry and the need to reform is more necessary than ever. Blockchain, a modern innovation, acts as a revolutionary angel and can play a vital role to the maritime industry bringing many innovative developments. Blockchain as a relatively new technology is designed to achieve decentralisation, real-time peer-to-peer (P2P) operation, anonymity, transparency, irreversibility and integrity in a widely applicable manner. In accordance with the IBM report 2018, Maersk and IBM joined their forces and built their own Blockchain platform, named «Tradelens». With Tradelens, they achieved global shipping cost reduction by improving visibility across chains and abolishing inefficiencies stemming from paper – based processes. Therefore, Blockchain can improve transparency and security which will lead to the acceleration of the physical flow of goods.
The fact that Shipping and Maritime Industry lack innovations in relation to operations, procedures and logistics, will bring them to the position to witness one of the biggest transformations and revolutions with the implementation of Blockchain technology.
«Tradelens» – Maersk and IBM
As mentioned above, IBM and Maersk joint their forces to develop a blockchain solution named, «Tradelens». The purpose of this collaboration was to digitalise global trade and this innovation inspired others to join the Industry or to form their own partnerships. According to the IBM report, the joint blockchain aimed to «vastly reduce the cost and complexity of trading by using blockchain technology to establish transparency among parties».The report states that the idea behind this innovative solution was to improve inventory management and to ultimately reduce waste and cost as a result of the reduction of fraud and errors, transit time and shipping processes.
Carriage of goods by sea can be described as a complex procedure because of the involvement of many organisations and people such us international and local authorities, ports, sea carriers, freight forwarders etc. The blockchain technology innovation has the ability to supervise the cargo anytime throughout the logistic process and one of its many benefits is that all the documentation and paperwork will be radically reduce. Maersk platform is based on smart contracts which enable faster approval by the managers and faster information processing.
The Development of BDTS platform:
Blockchain Document Transaction System (BDTS) technology was developed by CargoX and implemented on CargoX platform.
According to the PTI (Port Technology Innovation) Journal, the CargoX is described as:
The autonomous and open blockchain-based platform ensures widely transparent, yet encrypted data and document transactions, with a wide range of possible workflows for the air, road, and ocean shipping industry. It ensures an extremely fast, safe, reliable, and cost-effective way to process shipping documentation in one place for all participants – importers, exporters, freight forwarders, shippers and cargo carriers, customs officers, and the other public and private entities included in the process. One of the benefits of the platform is the process optimisations, digital archives and incoming document oversight.
CargoX with Smart Bill of Lading application, intends to replace the current proof of cargo’s ownership with a digital proof of ownership. Numerous benefits of the digital Bill of Lading can be listed but the most important of them is that they can easily be archived, they are secure, less expensive than the current BoL in paper form and can be portable.
Lack of Success?
One of the difficulties Blockchain innovation faces is the absence of standards; on the grounds that not all interested parties are execute analogous Blockchain solutions and platforms. Thus, interoperability may emerge.
While Blockchain technology provides a revolutionary solution in Maritme & Shipping Industry as well as in a range of business sectors by decentralised and transparent process, it is still quite nascent. Globally, various Blockchain projects exist but are mainly associated with smaller groups such as Maersk and IBM who have begun to establish their own alliances in order to achieve the benefits of Blockchain technology
Although, Blockchain innovation offers tremendous advantages, the detriment is the lack of a solitary fundamental norm.Ideas are hard to be aced and programming intercession is important even in the least complex types of usage. Moreover, all hubs in the chain must process all exchanges, and this presents an issue with enormous and particularly worldwide scale rollouts.