How Shipping Companies Can Improve Security and Cut Costs with Blockchain
One by one, global shipping companies and manufacturers using shipping services announce the launch of their custom blockchain software. This way, they aim at cost reduction and improved data security. The advent of out-of-the-box blockchain ecosystems allows smaller shipping companies to catch up.
In this post, we’ll look at how shipping companies can benefit from blockchain and what others can learn from real blockchain use cases in the industry.
Marine Transport International Enhances Security and Profitability
By connecting all the shipping parties, secure-by-design blockchain software allows reducing costs of data transfer by as high as 90%.
How does shipping work? The shipper hauls cargo to the origin warehouse. Then, the cargo is moved to an origin port, from where it is to get shipped to a destination port by freight. Trucks move the cargo from the destination port to the destination warehouse, and from there to the consignee. It means that there are at least five physical points in the shipping process, and each of the steps is cost-associated.
The pilot blockchain technology by Marine Transport International brings all the parties together and provides a transparent and secure infrastructure based on a distributed ledger. It works in the following way. Once the shipper delivered the cargo to the origin warehouse, information about this cargo is recorded on the blockchain. It allows validating the cargo provenance instantly. Step by step, the data is transferred from one point to another without any third parties to validate it. Such a disintermediated process allows saving almost 90% of the costs associated with document management.
Five-Member Consortium Stakes on Security
Four global corporations and one non-governmental organization developed a blockchain platform to enhance data security. The five members are beer manufacturer AB InBev, management consulting company Accenture, shipping company APL, logistics corporation Kuehne + Nagel, and the European Customs Organization.
The platform works in the following way. Any record kept on the platform is immutable yet shared among all the participants. Data encryption makes information inherently resistant to modification. Recording new data as well as changing existing records requires confirmation from all the participants in the network. This process guarantees a high information security level.
Maersk Spins Off Blockchain Platform
After losing $300 mln because of the Trojan-style cyber attack in June 2017, Maersk focused on the development of a secure decentralized blockchain platform. To make this software available to others, Maersk created a joint venture with IBM, to position the solution as a separate entity.
The software goals are to make shipping paperless, provide end-to-end shipping information immediately, and to guarantee data security.
Currently, a lot of international giants are interested in using this technology as well. Among them, there are DuPont, Tetra Pak, Dow Chemical, General Motors, and Agility Logistics.
How to Develop Your Blockchain Solution
Successful blockchain projects by large shipping corporations stimulate smaller companies to leverage the technology as well. Although the solutions mentioned above are inaccessible for smaller businesses, shipping SMBs can develop their own blockchain solutions using ready-to-use ecosystems like genEOS. With its help, businesses can build and launch their own applications backed by this blockchain platform.
Takeaways
As blockchain technologies are gaining recognition, large shipping corporations start crafting their own solutions. In such a way, they intend to reduce costs and make data ultimately secure.
Marine Transport International reduced data exchange-associated costs by 90% after the launch of its blockchain software. The consortium of four corporations and one NGO are cooperating on their proprietary blockchain platform to make data highly secure. Maersk and IBM have even formed a joint venture to design a blockchain solution and sell it out to other large corporations.
Smaller shipping companies can also benefit from the blockchain, cutting down software development costs. They can use blockchain ecosystems like genEOS to create and launch powerful, secure, fast, and scalable decentralized applications for the shipping industry.
