Skip to main content

Port of Call: Blockchain's Impact on Supply Chains is Broader Than It Seems

While on the surface this seems like another step towards supply chains moving onto blockchain platforms, the greater impact could end up being elsewhere.
Tie the project in with two other recent trends – container shipping consolidation and an increase in security hacks – and you begin to get a feel for how this project could help both smooth the industry’s growing complexity and consolidate its role in the world economy.

Docs for docks

The container shipping sector is grappling with the most severe financial crunch in its 60-year history. Growth rates have plummeted over the past few years as a slowdown in world trade, combined with overcapacity, has pushed down volumes and rates. And things don’t look like they’ll improve much in the short term.
To help offset this, large shipping companies have been forming alliances, "sharing" space on container ships. It’s not hard to imagine the maelstrom of documentation this entails. According to the port authority, paperwork now accounts for up to half the cost of container transport.
A blockchain platform – on which all participants can access and verify documents in real time, removing costly duplication and errors – could lower costs, which would encourage more trade and provide a welcome boost to the shipping ecosystem.
While ports are only one step of the shipping process, they are a crucial one, as well as a potential processing bottleneck. Bills of lading and transport contracts change hands at ports, as agents unload the containers and send them on the next leg of their journey. Erroneous data and inconsistent forms delay the process, leaving goods on the dock for longer than necessary.

Any port in a storm

It is also on the dock where security issues tend to appear.
The Port of Antwerp’s blockchain platform was primarily designed to solve a particular problem: containers awaiting pickup are assigned a unique identifying number, which passes through several parties before reaching the intended transporter. The solution ensures that only the designated agent is given clearance to pick up the goods, and the distributed nature of the information blocks any attempt at manipulation.
While that is a relatively rudimentary example, port security concerns around the world are intensifying in light of recent events. Earlier this week, shipping giant AP Moller-Maersk was hit by a cyber attack that affected all areas of its business, including its port operations, some of which had to be temporarily closed.
When you take into account the synchronized steps of supply chains, closure of part of the process, however temporarily, causes major disruption, the ripples of which can be felt around the world.
No doubt global maritime centers are aware that a distributed network of blockchain platforms could enhance the security and integrity of key operations. And while the Antwerp project is focusing on a specific use case, it’s likely other trials will soon follow. Rotterdam, the largest port in Europe, is also working on blockchain solutions for logistics.

Loading up

Given the global nature of the shipping business, the interconnectedness of the different parts of the logistics operations and the common problems shared by most operators, it’s curious that an international blockchain consortium of ports and shippers has not yet emerged.
When it does, the work already started will undoubtedly reveal further applications for distributed ledger technology that could help solve some of the industry’s woes. For there are many, and an ailing shipping industry will hold back economic growth around the world.
Blockchain-based platforms can help make supply chains more efficient, which should boost global commerce. But the potential goes way beyond that. It’s about strengthening both the business model and security of a key part of those chains. Without resilient ports, the chains that bind world trade together won’t hold.

Comments

Post a Comment

Popular posts from this blog

Bitcoin in Africa: Insights from the Continent’s Biggest Bitcoin Exchange

Isn’t it absurd that nearly 326 million people representing 80% of the adult population in Africa do not have access to bank accounts? This wretched situation denies countless of people financial freedom in the so-called dark continent. Bureaucratic tenors and economic exclusion inter alia have paved the way for the current phenomenon. Last year a study of 10 African nations with unusual inflationary ratio had South Sudan registering an unimaginable inflation rate of 295 percent. Egypt had the slightest with 12.30 percent. African governments continue to plunder the riches of the African people through Inflation. This makes it considerably insurmountable for individuals to conserve their resources. Moreover, public sector borrowing has crowded out the efficient private sector that can put credit to good use. The IMF estimates that averagely credit to the private sector is estimated at 30 percent of GDP in Sub-Sahara Africa. CCN spoke to Werner van Rooyen, Head of Business Develo...
Post a Comment
Read more

The Nazi gold

Nazi gold  ( German :  Raubgold , "stolen gold") is the rumored  gold  allegedly transferred by  Nazi Germany  to overseas banks during  World War II . The regime is believed to have executed a policy of looting the assets of its victims to finance the war, collecting the looted assets in central depositories. The occasional transfer of gold in return for currency took place in collusion with many individual  collaborative  institutions. The precise identities of those institutions, as well as the exact extent of the transactions, remain unclear. The present whereabouts of Nazi gold that disappeared into European banking institutions in 1945 has been the subject of several books,  conspiracy theories , and a failed  civil suit brought in January 2000  against the  Vatican Bank , the  Franciscan Order , and other defendants. he draining of Germany's gold and foreign exchange reserves inhibited the acquisition of...
Post a Comment
Read more

Why Bitcoin Costs Nearly Twice as Much in Zimbabwe as the Rest of the World Right Now

In Zimbabwe, a country where hyperinflation led to $1 being worth 35 quadrillion Zimbabwean dollars , the relative security of cryptocurrency already came at a premium. The recent military takeover of the capital – which generals insist is not a coup – has made made the problem even worse. Bitcoin prices have risen 10% to $13,499 on Golix, the troubled nation’s only cryptocurrency exchange. That figure is nearly twice the $7,000 Bitcoin price on U.S.-based exchanges such as Bitfinex. The surge has been fueled by Zimbabwean investors seeking a safe haven from domestic banks amid the country’s ongoing political, financial and monetary woes. While Zimbabwe once had its own currency, it began using a mix of currencies from stable economies including the U.S. dollar in 2009 after hyperinflation made its own note nearly worthless .   But, as the country’s political situation has worsened, Zimbabweans have continued to hoard money and park it in assets such as Bitcoin — a move t...
Post a Comment
Read more