Blockchain in Shipping: Is It Here to Stay?
“Blockchain” is now a familiar word, even if a large portion of us in the shipping industry are not actually using such technology yet. But, is this new visitor here to stay?
Certainly the likes of Maersk seem to think so, and with a certain degree of success. Over 90 companies have signed up already to the Maersk and IBM-initiated digital supply chain known as TradeLens, which utilizes Hyperledger Fabric private blockchain technology.
Tradelens was spun off to some degree from Maersk and IBM in January 2018. It now operates as a quasi-public blockchain, with Tradelens charging a signing up fee. Tradelens records information ranging from vessel movement times in port to customs releases, commercial invoices and bills of lading.
With this wealth of information available in one place to all interested parties, the common question of “Where’s my container?” is reportedly answered in one step and one person rather than the previous ten steps and five people – rather akin to a private WhatsApp group. The system also extends to smart contracts, which eliminate the requirement for quite so many middlemen.
Tradelens is reflective of the take-up of blockchain in the shipping industry thus far. More and more organisations are independently applying the new digital infrastructure technology to their existing business processes in order to improve them. Most recently, we have seen the collaboration between APL/K&N and Accenture, as well as Abu Dhabi Ports’ homegrown tech, Silsal. Each of these, in summary, proposes to offer its own trade logistics solution. However, the concept behind blockchain technology is the creation of “one”decentralized and transparent digital infrastructure. IBM admitted recently to digital media company CoinDesk that it is struggling to attract carriers to its platform, which is apparently still owned by Maersk and IBM. As a result, attracting competitors is difficult. If any of the shipping platforms currently on offer are to extend beyond a mere software upgrade and compete with the likes of Ethereum, then far more collaboration will be necessary.
Maersk has also backed the launch of Insurwave, another blockchain digital infrastructure platform this time built to trade marine insurance. Co-creators of Insurwave, EY, state that the platform will enable claims to be paid “in hours, not years”, and for premiums “to be agreed and settled in seconds”. Smart insurance contracts will be available in a variety of forms, and so, we understand, a shipowner could conceivably offer insurance contracts direct to its cargo clients. As with the blockchains peddling trade logistics solutions though, if Insurwave is to succeed then it will require a massive uptake by those in the insurance industry.
Elsewhere it certainly seems to be the case that blockchain technology is here to stay in one form or another. It has been over a year since the first international real estate transaction was formulated, entered into and paid for via Ethereum. HTC has just launched the blockchain based phone EXODUS 1. IBM Food Trust is now commercially active. Like the shipping industry, however, such platforms are limited by the uptake that they receive.
However, the race is now on in the tech world to find a cross chain solution which can make one blockchain can talk to another. Not only will this mean that information can be shared across chains, but it will resolve the issue of what do when a popular blockchain is hindered by its own technical scaling limitations. Companies like Blocknet and Cosmos appear to be well on their way to achieving this. If this is true then the future of the blockchain should be secured, whatever the uptake of the independent platforms and our new visitor will be here to stay.
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