UK – DENMARK – US – WORLDWIDE – It is around a year since logistics technology company Marine Transport International (MTI) said it was deploying the first blockchain solution applicable to the global freight forwarding and shipping industry. That’s blockchain you understand, not block train, and if anyone out there doesn’t understand that expression, trust me, you’re not alone.
Blockchain is a term which normally is associated with bitcoin, which itself is enough to have eyes rolling back in heads. That however is not the full story, and if you’re reading this thinking we’re about to make everything clear, trust me, you may well come to the end of this article with more questions than answers.
According to those who tell us they know about these things, blockchain technology is likely to become a regular feature in many ways of doing business and MTI says its application is particularly apt when used as part of the supply chain process. So first what exactly is blockchain?
Well, it is now necessary to drop the natural scepticism which forms a major part of the world of shipping (and the press associated with the trade). According to MIT Management, Sloan School Massachusetts, it consists of ‘an entirely new suite of technologies and there is substantial confusion around its definition because the technology is early-stage, and can be implemented in many ways depending on the objective’.
As we see it the principle is fully traceable, chronological sets of data. The key factor is that this stream of data is visible to every stakeholder and all the copies update simultaneously. Bitcoin is not blockchain, but blockchain is the method which enabled bitcoin to exist, when a transfer is made there is immutable proof, visible to all that the transaction has been made.
So, what’s the latest and why is MTI, a company based in the UK and US which claims access to 30 years of experience and which specialises in harnessing technology to logistics, getting so excited? The answer is that MTI, in cooperation with Agility Sciences, have released a whitepaper detailing the deployment of their Container Streams system in a supply chain environment.
MTI says the results of the pilot have been verified by scientists at the University of Copenhagen and maritime technology leads at Blockchain Labs for Open Collaboration (BLOC). The company says the project, which has connected supplier, shipper, load point, customs and terminal on a shared blockchain ledger, has far reaching consequences for the logistics industry as it seeks new ways to improve security and profitability. All parties involved in the supply chain benefit from automated data flows as the system allows complete interoperability of data sources, even including legacy systems. CEO, Jody Cleworth explains:
“The results of this successful pilot demonstrate the strengths of blockchain technology when deployed to link the various actors in the supply chain. We are confident that firms throughout the logistics industry will see a broad spectrum of benefits stemming from blockchain deployment. The blockchain has proven to be an excellent way of connecting the different parties involved in any supply chain environment due to the transparency and security-by-design of the technology.
“In recent months the shipping industry has fallen victim to industrial-scale cyberattacks which have left large shipping lines, such as Maersk, completely paralysed and unable to serve clients. A blockchain-enabled supply chain is highly resilient to cyberattack, a copy of the essential shipping data is stored on each node on a decentralised network, meaning that even if one node is compromised, the data is safe nevertheless.
“The business case for connecting supply chains using blockchain is very strong. As the interface is easily adaptable to existing systems there is a very low barrier to entry. Any type of supply chain business, be it marine, air or land-based, can take advantage of such a system, the cost savings that we envisage are as high as 90%, as a result of substantially streamlined processes.”
It remains to be seen if such systems can be rolled out as a panacea for the present and potential ills of the biggest industry in the world but Karim Jabbar, from the Department of Computer Science at the University of Copenhagen is obviously enthused by the concept believing it is particularly applicable to the industry. He commented:
“This pilot demonstrates the great potential for distributed ledger technologies to be used in improving supply chain processes. The Container Streams system is unique in the fact that it does not require the complete replacement of existing systems – instead, MTI’s solution allows complete interoperability with existing legacy infrastructure. The logistics industry as a whole can expect better visibility, connectivity and cost savings as a result of distributed ledger adoption.”
So will blockchain become a ubiquitous presence with logistics in the vanguard of change? We wait and watch but know that the historical reticence which shipping had for ‘new’ systems is now largely a thing of the past as a younger generation takes up the reins and technological advances are now accepted as the norm, even by the traditionalists if it makes life easier, safer or cheaper. As Deanna MacDonald, CEO of BLOC concludes:
“We have documented the first phase of this use case, its implications for the maritime industry and the resulting development of a turn-key application ecosystem for global supply chain logistics. However, the future potential of this ecosystem platform will rest upon collaboration from the different actors in these supply chains in order to clearly identify the problems and co-create applications that solve for the collective challenges they are facing today.”
source; Handy Shipping Guide