Blockchain Technology and the Future of the Maritime Industry

How Blockchain Technology is Applied to Documentation in the Maritime Industry

Globalisation has brought the most advanced trading networks the world has seen, with the biggest, fastest vessels, robot-operated ports and vast computer databases tracking cargoes. But it all still relies on millions and millions of paper documents.

That last throwback to 19th century trade is about to fall. AP Moeller-Maersk A/S and other container shipping lines have teamed up with technology companies to upgrade the world's most complex logistics network.

Should they succeed, documentation that takes days will eventually be done in minutes, much of it without the need for human input. The cost of moving goods across continents could drop dramatically, adding fresh impetus to relocate manufacturing or source materials and goods from overseas.

The key, as in so many other industries, from oil tankers to cryptocurrencies, is blockchain, the electronic ledger system that allows transactions to be verified autonomously. And the benefits wouldn't be confined to shipping. Improving communications and border administration using blockchain could generate an additional US$1 trillion in global trade, according to the World Economic Forum.

The shipping paper trail begins when a cargo owner books space on a ship to move goods. Documents need to be filled in and approved before cargo can enter or leave a port. A single shipment can require hundreds pages that need to be physically delivered to dozens of different agencies, banks, customs bureaus and other entities.

That plethora of paper processors has been one of the reasons shipping has lagged behind other industries in moving to electronic forms. The variety of different languages, laws and organisations involved in moving cargoes in the past made standardisation a slow process.

"Not all stakeholders are looking at deploying the same blockchain solution and platforms," APL said in response to questions. "This can pose as a challenge if stakeholders are expected to trade via a common platform or solution." 3 And the shipping lines will also need to persuade the ports and other organisations involved in cargo trading to adopt their systems. Maersk said Singapore-based port operator PSA International and APM Terminals, based in The Hague, Netherlands, will use its platform. APL and Accenture said they plan to pilot their product by the end of this year. Accenture said it has tested its technology with other pilot shipments that range from beer to medical supplies.

The cost savings could be visible in the companies' financial statements in about two years, Mr Kapoor of Bloomberg Intelligence said. "Shipping needs to stop thinking about itself as this standalone middle sector," said KD Adamson, chief executive officer of Futurenautics Group. "It needs to start thinking about how the different elements of shipping fit into other ecosystems." 

You are required to work as a group and submit a final report containing the following;

• Describe what block chain technology is, and how it can be applied to documentation in the maritime industry.

• Identify at least THREE issues or problems related to the application of blockchain technology in the industry.

• Discuss and propose suitable recommendations to address all the identified issues.