Blockchain for improved logistic processes in the shipping business

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You’re probably already convinced that if you want to acquire new business in the shipping sector these days, the costs of individual components within the logistic chain – such as a tariff per container – are no longer so crucial. What’s more important now is the quality of the whole logistic process  – from the supplier to the end receiver – and of the service rendered, such as making information available proactively and transparently. This determines the extent to which parties control their business and it therefore also determines the total costs of the whole process.

Developments today and tomorrow

Previously, our customer Seatrade Reefer Chartering had already told us about their clients’ increasing tendency to want to exercise more control over the logistic process in order to better plan their follow-up actions. With good, prompt information made directly accessible to their customers, they can organise the logistic processes in such manner that the shipment spends less time en route. For Seatrade this was reason enough to implement a customer portal with accompanying app. These are the current capabilities; tomorrow they will be even more far-ranging. New, innovative technologies such as Blockchain and IoT (Internet of Things) will bring even more improvements to the logistic process.

Even companies like Amazon know very well that the quality of the logistic process – transparent communication with the customer being an important part of it – is a strategic component of their offer. Amazon invests heavily in its own logistics network, which may also include its own shipping companies, ports and airports. The main reason they do this is not to cut costs; by placing the processes fully under their own control, they avoid dependency on others as well as loss of time. Amazon is a strong competitor for established parties in the industry, so there is reason enough to research the new technological developments.

What does Blockchain have to offer?

Blockchain has the potential to radically change the way in which the logistic chain is managed. Blockchain is currently very much in the news as the technology behind Bitcoin. Opinions around the world about the sustainability of Bitcoin are divided, but the new, revolutionary possibilities of the technology behind this cryptocurrency are fairly widely recognised.

Blockchain is a decentralised system where – without the intercession of intermediaries – assets and contracts can be recorded in a reliable, transparent and inexpensive way. Contracts can be incorporated as ‘self-executing’ computer code contracts in a Blockchain (with the parties being anonymous) and these contracts are then automatically executed when the coded contract conditions are satisfied.

To start with, one can think of the following applications in the shipping business:

  • Making data available in a safe manner to the various parties involved in the logistic chain.
  • Tracking of goods underway by means of trackers that can measure and transmit the GPS coordinates and temperature or humidity of a container.
  • A common system for all parties, for the administrative tasks that they all carry out in the same way without distinguishing themselves in the eyes of their customers. By simplifying processes in this way, or even eliminating them, the parties can focus on those things for which they provide added value.

The First Steps

The promise of Blockchain has now led to pilot projects and research programs the world over. Also in the shipping business companies will start working on, what is for many, a truly new technology in order to generate new business. A recent example is Blocklab in Rotterdam, which will launch a number of use cases. The port of Rotterdam wants to be at the forefront when it comes to logistic innovations. Various initiatives are also being started by the port of Antwerp and other ports.

At Ultimate Software we uphold the premise: ‘Think big. Start small.’ We have many customers in the shipping business, with various roles within the logistic chain. We learn from and experience the possibilities, enter into partnerships, and are especially in dialogue with our customers. We know our customers’ businesses and together we explore the common ground where the possibilities offered by Blockchain and IoT can be interesting for them.

We’re also eager to be your innovation partner in these new developments and we warmly invite you to discuss the opportunities with us.