According to an article by International Business Times, the Danish shipping giant Maersk is exploring ways to replace the traditional Bill of Lading papers by blockchain technology.
In association with experts from the IT University of Copenhagen, Maersk took part in a proof of concept in order to improve operations involving bills of lading.
Currently, container shipping involves a considerable amount of paperwork that is often more costly than shipping the container. According to IBM, about 100 different stakeholders participate in various stages of the shipping process such as customers, freight forwarders, truck drivers, etc.
Dr. Roman Beck, a professor at IT University of Copenhagen, said: “For historic reasons the shipment company takes charge of providing the information to all these stakeholders, ensuring quality control and that nothing has been fiddled with. For me, it’s the perfect kind of application area for a nice blockchain solution.”
Blockchain technology can be a confusing term to understand. This term started to be popular as is the main technological innovation of Bitcoin (first implemented in 2009) and enables data-sharing across a network of individual computers.
Don Tapscott, author of books such as the Digital Economy and Wikinomics says about blockchains:
The first generation of the digital revolution brought us the Internet of information. The second generation — powered by blockchain technology — is bringing us the Internet of value: a new platform to reshape the world of business and transform the old order of human affairs for the better.
Blockchain is a vast, global distributed ledger or database running on millions of devices and open to anyone, where not just information but anything of value — money, but also titles, deeds, identities, even votes — can be moved, stored and managed securely and privately. Trust is established through mass collaboration and clever code rather than by powerful intermediaries like governments and banks.
Beck says that shipping a consignment of roses from Kenya to Rotterdam generates a pile of paper 25 centimeters high. Additionally, the traditional system is extremely insecure.
With Blockchain technology, Maersk and the University of Copenhagen are expecting to reduce paperwork and, at the same time, they considered how to hide information on a blockchain-powered bill of lading.
“We don’t know who will be the final customer because the products are traded while they are in these containers. There are all kinds of middle men, cross sellers and this kind of stuff in the middle…We have put this into a demonstration to illustrate how this can be achieved. It was quite a steep learning curve for all of us, including Maersk,” said Beck.