Blockchain starts playing a big part in different industries, and shipping is no exception. Supporting this global trend, shipping corporations develop their proprietary blockchain software to cut costs and enhance data security. SMBs are about to participate in this process by designing their solutions based on ready-to-use blockchain ecosystems.
The post shows blockchain advantages using real case studies and gives recommendations for shipping companies which don’t use blockchain yet.
In 2018, Marine Transport International announced the launch of their blockchain software for shipping that can cut costs by as high as 90%.
What is the process behind this platform? Shipping consists of at least six parties, a shipper, an origin warehouse, an origin port, a destination port, a destination warehouse, and a consignee. Moving the cargo from one point to another calls for trackable product provenance, which is cost-associated.
Marine Transport International combined all the parties together on its platform to exchange transparent and secure data based on a distributed ledger. How does it work? As soon as the cargo is delivered to a new destination, the party records data about the product provenance using a blockchain. It means that all the cargo movements are recorded and validated instantly without any third parties needed. By this, the company could save almost 90% of document management-associated costs.
AB InBev (a beer producer), Accenture (a management consulting company), APL (a shipping company), Kuehne + Nagel (a logistics corporation), and the European Customs Organization developed a blockchain platform for shipping with a major goal to make data secure.
How does it guarantee security? First, blockchain is decentralized, which means that it is too hard to be cracked. Second, records are immutable yet shared among all the blockchain members. The data change requires confirmation from all the network participants, which guarantees a high security level.
The cyber attack on Maersk in June 2017 resulted in a $300 mln loss yet stimulated the company to work on their decentralized blockchain software to protect their data. When the platform was ready earlier in 2018, Maersk and IBM created a separate entity to be able to sell out the platform.
By making shipping paperless and enabling immediate and secure data exchange, the platform appealed to global corporations. Among them, there are Tetra Pak, General Motors, Dow Chemical, and DuPont.
Global corporations work with the global solutions, whereas SMBs can develop their proprietary blockchain platforms for shipping management. To make it easier, they can use out-of-the-box ecosystems like genEOS.
A growing recognition of secure and cost-cutting blockchain technologies makes them attractive for large shipping corporations.
The case study of Marine Transport International demonstrates 90% cost reduction through its blockchain platform. Other case studies of a five-company consortium and Maersk record high security efficiency of blockchain technology.
Although shipping SMBs are unlikely to afford the solutions developed by the global corporations, they can benefit from blockchain by developing their own software. To bring blockchain development within their reach, companies can adopt genEOS, a ready-to-use blockchain ecosystem, for such needs.
