Moves afoot to find blockchain solution for LCL carg

Shipping lines and the insurance industry globally are focused on adopting blockchain technology to enhance transparency and traceability for their clients. Malaysia Institute for Supply Chain Innovation (MISC) associate professor Dr Albert Tan told FTW that some governments were also assisting the industry by financing research into developing the technology. “The shipping lines and insurance industries are actively engaging blockchain technology to transform their industries. They are aiming to build more transparency and traceability for their customers
via distributed ledgers in blockchain technology.” Tan said the USA and European countries especially were actively transforming these industries as governments were “pumping millions to build prototypes” that the sectors could adopt. MISC has been engaged in a joint research project with Shanghai Jiaotong University to develop a blockchain-based solution to the problem of inefficient and complicated business processes for dealing with less than container loads (LCL) in Chinese ports. The team has focused on developing an LCL export platform that uses blockchain technology to promote the integration and exchange
of information between forwarding agencies and their shipping clients. Tan believes that the use of blockchain technology will make LCL transactions more transparent in the same way the internet opened up access to information. Some of the benefits of using the technology are that it enables the use of RFID readers in the supply chain to improve the flow of information and build trust and that it will speed up transactions because information such as tariff codes, classification information, import and export certificates and other data would be accessible to all parties.
However, he said the effectiveness of blockchain technologies depended on everyone in the logistics supply chain being willing to participate. “In order for blockchain to work, all parties involved in shipping the goods must take part in the blockchain network.  However, some government agencies such as customs may not be ready to subscribe to the network as some of the decisions in customs are ‘not so transparent’ to the shipper or consignee,” Tan said. Since blockchain does not allow anyone to edit or alter the record, it provides immutable documentation and this crucial aspect of the
new technology would need to somehow be adapted to accommodate the industry. “This is not a solution for the shipping and logistics industries where many people make typo errors in declaring their goods unintentionally. They need a new form of blockchain that allows the record to be "editable" to fit this industry. But this goes against the principle of blockchain to offer immutability,” Tan said.  He added that the technology could also disrupt the role of some of the current supply chain players which would result in cost and time saving for shippers and forwarders.