Firstly, let’s begin with the blockchain definition, currently evolving in parallel with the evolution of technology, Blockchain Technology is a computer-based open-source system for undertaking and tracking transactive information. This process allows digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet, revolutionised by digital currency, the tech community have developed many new ways to utilise it.
In the simplest of terms, a blockchain is a time-stamped series of immutable record of data, managed by cluster of computers not owned by any single entity. Each of these blocks of data are secured and bound to each other, hence the term “blockchain”. A simple yet ingenious way of passing information from A to B in a fully automated and safe manner.
The shipping industry however, remains rather traditional with a number of the processes involved being time-consuming and document-heavy.
As globalization has brought created most advanced trading networks (which are still however heavily reliant on millions of paper documents), container shipping lines have teamed up with a series of different technology companies to upgrade the world’s “most complex logistics network.” To make this prevail, a series of shipping lines and thousands of relative businesses around the globe (inclusive and not limited to banks, manufacturers, insurers and brokers), will have to collectively work out a protocol that can integrate all the new systems into one centralised platform. It is inevitably as complicated as it sounds – However, should this process succeed, documentation that takes days will eventually be done within minutes, much without the need for human input.
Rahul Kapoor, an analyst at Bloomberg Intelligence says “It basically brings more transparency and efficiency. The container shipping lines are coming out of their shells and playing catch-up in technology”.
It is a well-known fact to those within the industry that container shipping accounts for approx. 60% of the entire globe’s seaborne trade, and transports more than $4 trillion (USD) worth of goods per annum.
Potential benefits of the system for the container industry are no less than remarkable as it is suggested that the sector could save $5.7 billion (USD) according to Blockshipping, a Danish start-up.
The introduction of Smart Contracts, as a digital protocol that is intended to facilitate, verify, execute and/or enforce the negotiation or performance of an agreement, will help accommodate one of many agile processes. Vastly prominent with the Ethereum Blockchain platform.
Another blockchain-based platform, The Global Shared Container Platform (“GSCP”) seeks to allow participants in the container shipping industry, whether they be container lines, ports or terminals, to keep real- time track of all containers and to manage various types of container-handling transactions. Whilst blockchain technology can facilitate this, it has not played a part in the ship finance landscape as of yet, and the legal issues surrounding it has remained untested, as we develop and proceed into these unknown areas, it is best to keep an open mind to how the benefits can outweigh any potential down-falls.
As the revolution continues, we keep a close eye on the developments of blockchain technology enabling a new eco system.