Blockchain and port logistics: a powerful combination
Modern logistics networks are decentralised and include many small and medium sized enterprises. The sector is also strongly data-driven and highly dependent on trust, transparency and security. For example, an average of 28 parties are involved in transporting sea containers, and they exchange data around 200 times on any route to ensure a container reaches its intended destination.
Despite massive increases in the volume of international trade over the last 50 years, most of it is still run on documents that go back to the 14th century,” explains Aljosja Beije, Logistics & Technology Lead at BlockLab and co-author of Blockchain and the Supply Chain: Concepts, Strategies and Practical Applications. “We have digitised but, so far, we have not automated. That’s where blockchain will have a big impact.
Watch Aljosja Beije from Naviporta outline the reasons why blockchain is so valuable to international supply chains.
Lack of trust and inter-connectivity are the main factors behind the current high costs of shipping goods around the world. Each organisation along the supply chain, from banks and customs authorities to import/export companies, have their own systems involving huge amounts of paperwork, a single shipment encompassing over 130 pages of documents, time consuming money transfers, high fraud risk and insurance costs. These processes require constant monitoring and complex financing.
Blockchain creates trust in the global supply chain
In decentralised networks of companies and institutions, without a single overarching authority, efficient co-ordination and trust is essential. Blockchain not only simplifies processes, it enhances levels of trust because manipulating or deleting data is virtually impossible. As such, the technology could be a critical enabler for secure, controlled and scalable data sharing across the logistics and maritime sector. It would allow logistics service providers to disclose goods, money and information streams flexibly, securely and simultaneously, while reducing costs.
Blockchain and track & trace in logistics
This technology offers the potential, for example, to track and safely monitor the (often perishable) content of sea containers, reduce administrative costs and improve traceability. This is hugely significant. The cost of the documentation required to process and administer goods represents, on average, one-fifth of the costs of physical transport. According to the World Economic Forum*, reducing these barriers could boost worldwide trade by $1Trillion in the next 10 years.
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