What is Blockchain? What are Blockchain Bunkers? Why Blockchain Bunkers?
All good questions around the astonishing new technology transforming how business will be done across the marine industry.
So, What is Blockchain?
Blockchain is a network of users that collectively create a shared system of transparent transaction records or ledgers among the network users. Each transaction is an exchange of value (good, service, money, data, etc.) that is encoded in a unique “block” of digital data. The users agree about the quality of the data and each user confirms that the data in any block is true and accurate. Each block of data (or component of the transaction) is connected to the block behind it and to the block next in front of it. Each block is uniquely coded and cannot change its identity and therefore the data in each block cannot change. Every set of data in each block is totally transparent to all the users, and as the blocks are chained together, other blocks cannot be inserted between blocks and the data altered. As the chain grows through the shared user system the need for individual ledgers that captures individual user data is no longer needed as all the information and data is captured in each block and the chain represents all the transactional history and each data component.
There are many benefits that Blockchain can bring to the marketplace such as reducing paperwork delay, eliminating fraud, reducing errors, improving issue identification, improving inventory management and, increasing partner confidence in the process and their confidence in you. As all the members in a blockchain, each share the same view of the data and all the transactions, mistakes, fraud, manipulation, deceit and deception are greatly reduced.
What are Blockchain Bunkers?
The use of Blockchain in the bunker market provides soup to nuts transparency in the entire bunker process. From terminal tank quality to the quality and quantity on the barge, to the delivery quality and quantity on the vessel. In addition to physical delivery and attendant data, the financial data is also captured and made transparent to all the many players in a bunker delivery.
The traditional bunker market depends on the Bunker Delivery Note (BDN) for documentation of the delivery and transaction. BDNs were/are the weakest point in the bunker delivery process as the potential for deliberate manipulation of quality and quantity is rife as is the risk for pure error because of an exhausted Chief Engineer and worn out tankerman exchanging the BDN between the rail of a ship to the deck of a barge in the middle of the night and pouring rain.
Why Blockchain Bunkers?
Bunker markets worldwide provide huge volumes of fuel and with those huge volumes – big money. And, where there is big money, there is deception and fraud. Bunker markets are no strangers to fraudulent claims and falsified BDNs. Blockchain drastically reduces the potential for fraud as it removes the ability for the bad actor to insert fraudulent or deceptive data at any point in the process.
In addition to its transparency, Blockchain increases the efficiency around paying for bunkers and getting paid for bunkers – as shippers go bankrupt, go out of business with no notice, underpay, make meritless challenges to quality and/or quality to delay payment or make underpayments. Shippers are often paid on delivery of freight, and will often take bunkers before sailing for the next port. Blockchain can capture the amount of freight payments and provide bunker suppliers confidence that the shipper and/or its agent has the money to pay for the delivered bunkers.