Friday, 07 August 2020

Blockchain, shipping industry, and the environment

Blockchain technology, or open-ledger technology, has been inching its way through various industries around the globe. Wherever there is a need for a system that can assure integrity and transparency, blockchain can be there to address – if not solve – the problem.

Specifically, blockchain technology has found its way in the shipping industry. An industry that is responsible for annual shipping transactions worth $4 trillion – where 80 percent of which is comprised of goods that are typically used by consumers on a daily basis.

On August 9, 2018, A.P. Moeller-Maersk A/S (Maersk), the Denmark-based shipping and oil company, announced that a total of 94 companies and organizations have joined the blockchain logistics platform it developed with IBM called TradeLens. The system aims to streamline the entire logistical process while reducing the massive paper trail produced by the shipping industry. In doing so, not only does the system afford these member-companies the opportunity to transact in an efficient and virtually paper-less economy, but at the same time reduce, if not eliminate, the burden of bureaucracy that haunts the industry.

In the development and wider acceptance of this technology, this system can provide an end-to-end solution for customers and participants. This will encompass a wider scope of services that expands its primordial port-to-port shipping and container business. In fact, the system has caught up with several port operators from around the world, including those from Peru, Saudi Arabia, Hong Kong, Singapore and Netherlands, and other international organizations.

The platform is set to be in full swing by the end of the year with the hopes of other industry players joining in and contributing to this worldwide development of the shipping industry. This way, data sharing between the vast network of participating organizations will greatly help manage the enormous paper trail they create by digitizing or tokenizing the supply chain process, the application, tracking, customer service, and recording of these transactions.

The Swiss logistics magnate, CEVA Logistics, says that the system is an “answer to the untapped potential of blockchain applications in the logistics industry.” With TradeLens, there is “high potential” for success as the “real-time access it provides to all partners in supply chain” may be deemed invaluable in proving that “It is a big step forward toward establishing a market standard for blockchain solutions.”

This blockchain solution can contribute to further increase the efficiency of transporting goods by reducing the shipping time by more than 40 percent which can potentially save thousands of dollars – and of course, hundreds of thousands of paper documentation that comes with it.

At this juncture, it can be seen that technology can indeed affect not only the commercial viability and efficiently of transactions, but also may contribute to larger sphere of eco-friendlier ways of doing things. Should the technology be further adopted in other industries, it can be said that the world has a fighting chance to innovate its business transactions and transnational logistics while at the same time, contributing to global efforts of reducing our carbon footprint and overall preservation of the environment.

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