How Blockchain is Revolutionising the Shipping Industry
Shipping industry has been slow in catching up to digitalization, however, over the last three years the industry is progressing rapidly towards technology transformation to replace manual and time intensive processes to curb operational expenditure and improve profitability. The industry is robust and accounts for over 90% of the world trade; within shipping industry, supply chain management is offering lucrative business opportunities to the technology companies. Blockchain is one such technology that is enhancing visibility in payment transactions, along with improving operating efficiency and compliance management.
The broader advantage of blockchain in shipping would come from maintaining transparency about shipping details, including shipped date, expected arrival, and payment status between supply chain partners. However, it has a wider range of applications in shipping industry, including streamlined data flow, carrier compliance, linking customer and vendors to improve visibility, fraud mitigation and smart contracts among others.
In addition to the above-mentioned applications, blockchain based smart contract is more likely to witness faster adoption by owners and charters of cargo, bunkers and tankers. Blockchain integrates all the stakeholders including exporters, financiers, importers, port officials, export and import custom officials, surveyors and valuators. Also, smart contract offers real-time payment settlement between the parties by improving the transparency of transactions.
The low barriers to enter is pushing the competitiveness among blockchain vendors in this industry. Companies including Adobe, Samsung, Dutch Bank, ING, Accenture and Societe Generale are focusing on developing blockchain solutions through partnerships. Also, some of these vendors have already conducted a few pilot projects. Moving forward, supply chain management of shipping industry is more likely to get disrupted with a combination of blockchain and artificial intelligence.
Analyst view point
Blockchain is likely to help shipping industry to address challenges involved in transformation a uniform electronic system, which help logistics service providers to streamline their operational efficiency. The current day applications of blockchain have already been implemented at ports in Singapore, Netherlands and Rotterdam among others. However, creating a common platform by the blockchain companies considering the wide range of varying consumer needs.