Maersk and IBM recently announced an industry-wide trading platform that they hope will digitise the supply chain process from end to end, thereby bringing wide-scale efficiencies to global shipping. For over a year, the world’s largest container shipping line has also been participating in a proof-of-concept initiative, using blockchain expertise from the IT University of Copenhagen, to digitise ships’ cargo inventories. “Business is based on collaboration. Game theory and games such as the prisoner’s dilemma demonstrate that it is trust that sits at the centre of successful collaboration in business,” explains Wolfgang Lehmacher, head of supply chain and transport industries at the World Economic Forum. Lehmacher believes that trust maximises the outcomes of business activities for everyone. Blockchain helps to establish that trust which, in the shipping industry, means less paper and heightened efficiencies all along the trade value chain. “Considering the numerous parties that are involved across borders, time zones and continents, building trust can be challenging in any industry, not only in global shipping. “That’s precisely where blockchain and distributed ledger technology (DLT) come into play. DLT enables transparency of the transfer of assets and the immutability of records within the chain and so the distributed ledger can bring a new quality of trust to the cyber-physical world,” he explains. “The secure exchange of data will help the shipping industry to cut costs and time from several processes, while smart contracts will take automation to the next level.” Greater transparency also ensures the enforceability of rights, which gives confidence to all parties involved. Blockchain/DLT can be used to execute smart contracts, too. “Once data intakes prove that the conditions which are captured in the database/ contract have been met, payment can be authorised,” elaborates Lehmacher. DLT furthermore promises groundbreaking advances in trade and supply chain finance, resulting in reduced cost to the benefit of small-ticket transactions and SMEs. However, this does not mean that the benefits of blockchain will kick in overnight or in a big way immediately. In fact, progress will most likely be achieved through improving detailed functionalities, with numerous technologies applied incrementally. “Blockchain is one fourth industrial revolution (4IR) technology that will reveal its true potential in combination with other 4IR technologies, such as the internet of things (IoT) and artificial intelligence (AI). “Together, these are the range of digital devices and tools that will gradually transform the global shipping value chain into something we might struggle to imagine today,” he concludes.
