Blockchain is transforming various industries, and the maritime supply chain is no exception. This technology offers opportunities for more efficient and secure management of the complex flow of goods around the world. With blockchain, transactions can occur between individuals or parties without the need for a central authority. In this article, we will explore six ways blockchain is changing the maritime supply chain and the impact it has on the maritime industry.
Blockchain in Supply Chains
Decentralized and immutable recording of information opens up a world of possibilities. Even within the complex global supply chain, blockchain offers numerous potential applications. For instance, parties can record transactions in a shared digital ledger where data, once posted, cannot be altered. This offers numerous benefits in terms of security and transparency. Information about the shipment and distribution of containers is routinely recorded in the blockchain, including details about the container’s locations, shipment and receipt times, and all involved parties. This is a valuable tool in the fight against drug trafficking.
Blockchain vs. Traditional Supply Chain
It’s not so much blockchain versus the supply chain as it is blockchain plus the supply chain. Traditionally, parties in the supply chain heavily rely on extensive paperwork and intermediaries. Think, for example, of global shipping of goods that involves various documents and intermediaries at each stage of the journey, such as bills of lading, customs forms, and insurance certificates. These documents need to be processed physically or digitally by different parties. With blockchain, these processes are replaced by a kind of digital ledger. Involved parties (from manufacturers to logistics service providers) can securely and directly record transactions without the involvement of third parties. This increases efficiency, reduces errors, and accelerates the entire process.
Practical Examples of Blockchain-Driven Changes in the Supply Chain
The usefulness of blockchain in supply chain management is evident. But how does this translate into practice? Here are some examples of the (potential) use of blockchain in supply chains and the benefits it offers.
- Reduced Fraud
The value of many products depends on ownership transfers and other matters often documented in digital or paper form. These documents are susceptible to fraud, which is especially problematic when it comes to ownership rights. PIN codes are often used to release containers, but they can be manipulated. With blockchain, systems like T-mining’s SCR can be used to securely transfer ownership rights, making fraud nearly impossible. This not only ensures the integrity of ownership transfers but also preserves the value of the products.
- Improved Traceability
Those working in the supply chain know that good traceability is essential. Blockchain allows for the precise tracking of the origin and journey of goods. For example, consider an exporter of fruits using blockchain to register the origin of each piece of fruit. Using blockchain, every stage of the fruit’s journey can be accurately recorded, increasing trust in its quality and sustainability.
- Faster Payments
Blockchain enables direct and secure financial transactions, reducing the time and costs associated with traditional payment methods, benefiting all involved parties.
- Effective Inventory Management
Blockchain enables real-time monitoring of inventory levels, helping companies implement more efficient inventory management and reduce waste.
- Simplified Compliance
Many compliance regulations primarily revolve around the requirement that a party in a chain of custody provides certain evidence. If a shipping company, for example, uses blockchain to record data related to compliance with regulations, such as safety and environmental standards, it becomes easier to provide evidence in accordance with the law, reducing administrative overhead and speeding up processes.
- Enhanced Collaboration
Collaboration between different parties in the supply chain can be challenging because not everyone has access to the same information. Blockchain promotes collaboration by providing parties with access to real-time data, such as shipment status and customs information. For example, if a container carrier, customs, and warehouses all have access to a blockchain platform, they can share and view real-time data, facilitating collaboration.
The Importance of Data Storage in the Maritime Industry
The use of blockchain technology in supply chains is a logical step, as supply chains rely on trust and shared responsibility. Products need to move from point A to point B, but the parties at the beginning of the chain often don’t know those at the end. This necessitates reliable data storage. Blockchain has the potential to boost trust and information sharing within complex chains significantly.
Challenges in Implementing Blockchain in Shipping
While blockchain offers many advantages in supply chain management, there are also challenges in implementation. It requires investments in both technology and training people to use these systems. Additionally, cybersecurity investments are necessary to ensure the safety of blockchain technologies. Companies must also find reliable partners to offer blockchain solutions. The theory is there, but blockchain in the maritime industry requires significant fine-tuning.
Overall, it can be stated that the impact of blockchain on the maritime supply chain has significant potential. The technology not only offers opportunities for more efficient and secure management of global goods flows but also transforms the way parties in these chains interact and communicate. From the decentralized and immutable recording of information to the elimination of fraud, improved traceability, faster payments, optimized inventory management, simplified compliance with regulations, and the promotion of collaboration, blockchain offers numerous benefits to the maritime industry.