Blockchains, if widely adopted, could save the shipping industry billions, according to Joëlle Downes, a senior associate at Bowman Gilfillan Africa group’s shipping and logistics practice. Speaking at an Exporters’ Club Western Cape function recently, Downes said blockchains were fundamentally changing the way the world did business and advised South African companies to get on top of the technology sooner rather than later. “Moving a single container from Mombasa in Kenya to Rotterdam in the Netherlands, for example, requires the involvement of at least 30 people with more than 200 communications between them,” she said. “Around 90% of goods in global trade are carried on ships each year, but global trade still functions much the same way it did in the 50s, relying quite heavily on manual paper-based processes. The supply chain is slowed down by the volume of documents, the number of people involved and the third parties within the chain.” Blockchains, she said, would ultimately change the process entirely as the technology introduced a tamper-proof trade solution that managed and tracked the paper trail of millions of containers by digitising the supply chain process from end to end. “Blockchain technology enhances transparency and ensures secure means of sharing information between trading partners. It reduces fraud and errors and minimises the amount of time goods spend in transit. If widely adopted it will save the shipping industry billions.” According to Lana Jacobs, an associate at Bowman Gilfillan Africa, blockchains address some of the biggest challenges facing industry at present – including cybercrime, security, delays and cost. “The blockchain is quite complex and many people don’t understand it,” she said. “The idea however is quite simple because it is simply an incorruptible distributed ledger of economic transactions rather than a record existing in one single location.” This, said Jacobs, meant that the blockchain would become the optimal means of tracking and trading virtually anything of value in the future. Blockchains don’t require a central intermediary like a bank, and because they don’t exist in one single location but are shared amongst computers around the world, the technology has built-in consensus mechanisms that allow anyone anywhere to do business with each other and to trust each other. “I am selling a product for R100. I agree to a transaction with a buyer but essentially I have no way of looking into that person’s bank account to know if they have the money or not – because money has become virtual. I have to rely on a central bank to control this transaction and ensure nothing fraudulent happens,” explained Jacobs. “Instead of having an intermediary with processes and delays where I finally get my money several days later, we build a blockchain. They are super-secure and stable and have no delays. It also reduces the cost of doing business as the middleman is being cut out.”
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Blockchains address some of the biggest challenges facing industry at present — including cybercrime, security, delays and cost. – Lana Jacobs
