Blockchains Effects On Global Shipping — (Part 10)
Global shipping is a huge topic and encompasses many different elements such as regulations within global trade which has been covered in another article which can be seen here. As this is a huge topic we are just going to be looking at it from a holistic point of view so that if you want you can go ahead and do your own additional research afterwards.
Global Shipping And Freight
As it currently stands the shipping market is really heavily paper-based, involving a significant numbers of parties that exist within a vast ecosystem. From the shipping container owners to the port owners to the customs agents and many many more.
With any global container shipment, there are around 50 paper based documents required each time they leave a dock and arrive in another doc. This is an incredibly inefficient system, with many delays and often mistakes within the system, not to mention to contribution to lack of transparency and planning capabilities.
Global shipping is one of the most recognised use cases for Blockchain but this is no small task. Many companies are focusing on specific areas within this massive process, and this is allowing for drastic improvement in small areas. The entire process and ecosystem of different solutions will take years to develop, but the huge number of parties now involved is ensuring that real progress is constantly being made.
For example the IBM run company Tradelens is looking to digitise the entire container supply chain for Maersk and have real time maps of this all ran off a Blockchain solution,
Some Of The Benefits And Outcomes
There is no denying that the global shipping and freight world is massive and holds incredible significance and there are many ways in which Blockchain technology will be able to improve the current outdated systems. When looking at the fact that for every large container ship, there are 50+ documents, you can already see the potential of Blockchain to eliminate this paperwork.
To make the Blockchain revolution work, hundreds of shipping lines and thousands of related businesses around the globe — including manufacturers, banks, insurers, brokers, and many more will have to work out a protocol that can integrate all the new systems onto one vast platform. This has started and there is going to be continued progress made.
As explained through the example of Tradelens Blockchain is going to massively enhance the predictability of arrivals, this then allows all parties involved to prepare for the shipment's arrival, with the full knowledge of the contents and its location on the vessel, this will massively cut down time at the port.
Another benefit is through delivery transparency and accuracy will be greatly enhanced, through the use of predictability you will be able to known when X is going to arrive and at what hour and also that it will be unloaded at Y hour, with this you can ensure that transportation is ready to collect the shipment as soon as it is ready.
In 2014 the world economic forum calculated that the processing of trade documents costs as much as a fifth of those of shifting goods. Removing the administrative blockages in supply chains could do more to boost international trade than eliminating tariffs. The benefits wouldn’t be confined to shipping. Improving communications and border administration using Blockchain could generate an additional $1 trillion in global trade.