November 8, 2023

6 Ways Blockchain is Changing the Maritime Supply Chain

Blockchain is transforming various sectors. The maritime supply chain is certainly no exception. This technology offers opportunities for managing the complex flows of goods around the world more efficiently and securely. Blockchain enables transaction between people or parties without the need for a central party. In this article, we look at six ways blockchain is changing the maritime supply chain and what impact it is having on the maritime industry.

Blockchain in supply chains

Capturing information decentrally and immutably. This creates a sea of opportunities. Even within the complex, global supply chain, blockchain offers numerous possible applications. For example, parties can record transactions in a shared digital ledger in which data, once posted, cannot be changed. This offers numerous possibilities in terms of security and transparency. Data on the shipment and distribution of containers are included in the blockchain as standard. These include information on the locations where the containers have been, times of shipment and receipt, and all parties involved. This is a valuable input in the fight against drugs.

Blockchain vs traditional supply chain

Blockchain vs supply chain? Rather, it is blockchain + supply chain. Traditionally, parties in the supply chain rely on extensive paperwork and intermediaries. Consider, for example, global shipment of goods where each stage of the journey requires various documents and intermediaries, such as notes of lading, customs forms and insurance certificates. These have to be processed physically or digitally by different parties. Thanks to blockchain, these processes are replaced by a kind of digital ledger. Stakeholders (from manufacturers to logistics service providers) can record transactions securely and directly, without third-party intervention. This increases efficiency, reduces errors and speeds up the whole process.

Practical examples of changes by blockchain in supply chain

The usefulness of blockchain in supply chain management almost speaks for itself. But how does it translate into practice? Here we give you some examples of the (potential) use of blockchain in supply chains and the benefits it brings.

  1. Less fraud

    The value of many products depends on transfers of ownership and other things that are often recorded in digital or paper form. These documents are susceptible to fraud, which is especially problematic when it comes to the owners of items. PINs are often used to release containers, but these can be manipulated. With blockchain, for example, systems such as T-mining’s SCR can be used to securely transfer ownership rights, making fraud virtually impossible. This not only ensures the integrity of ownership transfers, but also preserves the value of products.

  2. Better traceability

    Anyone working in the supply chain knows that good traceability is essential. Blockchain makes it possible to accurately track the origin and journey of goods. As an example, take an exporter of fruit who uses blockchain to record the origin of every piece of fruit. By using blockchain, every stage of the fruit’s journey can be accurately recorded. This increases confidence in quality and sustainability.

  3. Faster payments

    With blockchain, financial transactions are handled instantly and securely. This reduces time and costs associated with traditional payment methods, benefiting all parties involved.

  4. Effective inventory management

    Blockchain enables real-time monitoring of inventory levels. This helps companies implement more efficient inventory management and reduce waste.

  5. Simpler compliance

    Many compliance laws consist mainly of having a certain burden of proof as a party in a chain-of-custody. Suppose a shipping company uses blockchain to record data related to regulatory compliance, such as safety and environmental standards. This makes it easier to provide proof of compliance with legislation, which in turn reduces administration and speeds up processes.

  6. Improved collaboration

    Collaboration between different parties in the chain is often challenging because not everyone has access to the same information. Blockchain enhances cooperation by giving parties this access though. This creates trust and speeds up processes between different parties in the supply chain. Suppose a container carrier, customs and warehouses all have access to a blockchain platform, here they can all share and/or view real-time data, such as the status of shipments and customs status.

Importance of data storage in the maritime industry

Using blockchain technology in supply chains is a logical step, as supply chains revolve around trust and shared responsibility. Products need to get from A to B, but the parties at the beginning of the flow do not know the parties at the end. This means reliable data storage is needed. Blockchain has the potential to boost trust and information sharing within complex chains.

Challenges in implementing blockchain in shipping

While blockchain in supply chain management offers many advantages, there are also challenges in implementation. It requires investments in both technology, and in training people to use these systems. You can also think about investments in cybersecurity, to ensure the security of using blockchain technologies. Companies also need to find partners who offer reliable blockchain solutions. The theory is there, but blockchain in the maritime industry requires a lot of fine-tuning.

All in all, it can be said that blockchain’s impact on the maritime supply chain has great potential. The technology not only offers opportunities for more efficient and secure management of global cargo flows, but also changes the way parties in these chains interact and communicate with each other. From decentralised and immutable recording of information to eliminating fraud, improving traceability, speeding up payments, optimising inventory management, more easily meeting compliance legislation to fostering collaboration – blockchain offers numerous benefits for the maritime industry.

Frequently asked questions

How is blockchain applied in the supply chain?

Blockchain is applied in some cases in supply chains by recording transactions or chains of custody in a distributed ledger that cannot be altered, making processes more transparent and secure.

What is the impact of blockchain technology on the future of the maritime industry?

Blockchain technology has the potential to make the maritime industry more efficient and secure, with improved traceability, faster payments, and better collaboration between parties.

What are the challenges of using blockchain in the supply chain?

Challenges in using blockchain include changes in organizational culture, investment costs, and finding reliable partners for blockchain solutions.

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