Blockchain is one of the most exciting innovations in recent years and has the potential to transform logistics and, perhaps, the global economy.
Stefan Kukman, CEO of maritime blockchain specialists CargoX, has spoken exclusively to Port Technology on how the maritime industry and wider supply chain can benefit from the smart technology.
How blockchain and other technological breakthroughs can increase efficiency in the supply chain will be one of the many subjects to be discussed at Port Technology’s Smart Digital Ports of the Future Conference (#SDP19) in Rotterdam between 4-6 November 2019.
PTI: What are the big benefits of blockchain for the maritime supply chain?
SK: Blockchain brings a lot of value to the supply chain and the whole online business environment. The change has been so significant that many experts are calling it “web 3.0”.
If before blockchain all online, cloud or server-based business solutions relied on a central authority that simply had to be trusted for any data, document or asset validation – today blockchain technology helps everyone build trust in a decentralized, trustless environment.
This means there is no longer any need for central authorities, as the whole blockchain network controls itself in a way that provides data reliability, service immutability, and transaction validity.
In short – if before blockchain we merely sent data here or there, now we can rightfully transfer the ownership of a piece of information, or a document, to another person, in a way that nobody can dispute, revert, or damage.
This is not only useful for the supply chain but also for the wider the ocean shipping industry. People can transfer rights to contracts or assets in a way never seen before – and at minimal costs.
This is of utmost importance for the maritime supply chain – bills of lading, which take up to 3 weeks to travel with a courier, can also get damaged, stolen, or lost, costing up to a hundred dollars and untold amounts of stress and logistic effort. This document can now be transacted within minutes and at a fraction of the cost.
PTI: How can supply chain stakeholders best utilize blockchain?
SK: The power of blockchain lies in the concept of always being on, always processing, and always offering insight into past and ongoing transactions.
If it is set up in a clever way, blockchain not only helps streamline document pathways and provide total visibility over them in one space, but also helps project what the incoming documents, or digital assets, are going to require for processing, and how the values will move a given business.
There is a new level of financial analytics available, a new dimension of data standardization, and new opportunities for wholesome business improvements, based on this constant, unstoppable document flow.
Manufacturers and sellers can disseminate information about materials or products when they are manufactured, including where and from what components were used, and send that info all the way through assembly lines and then on to consumers, throughout the product’s entire lifecycle.
Companies can use the power of blockchain to optimize their everyday document processing, to trace the origins of their goods, and to act transparently and openly in the market.
These are values that are becoming more and more important in the wild world of consumerism.
PTI: In your opinion what are the big blockchain success stories in recent years?
SK: There are many stories, but success is yet to come – at least for some of them.
We truly believe and feel that CargoX is a big success story. We have received several prestigious awards or nominations, including as winners at the International Road Transport Union (IRU) World Congress Startup competition, from among 77 startups.
Billions were invested in logistics and logistics platform and technology startups, and now the market will decide which will be successful.
Only a few companies, CargoX surely among them, really know customers’ needs and have the potential to collaborate with each other in an open way to truly set new standards in the field.
PTI: Is there a particular region of the world that has been particularly open to using blockchain, in your experience?
SK: North America is at the forefront, and Europe is somewhere far behind it. Both markets are uniform enough to allow innovation to flourish in everyday business workflows.
There are also interesting developments in Dubai and the United Arab Emirates, and there is a lot of interest there.
Fresh winds are building up to accelerate those who adopt the new technology soon. All the big analytic companies are aware of the potential of business digitalization, and blockchain is one of the technologies coming to maturity soon.
PTI: Can blockchain be used as a platform for collaboration and sharing data in the broader supply chain?
SK: We see blockchain as the internet of value, and we do not believe that merely transferring data over blockchain currently makes sense, as it is not the cheapest option.
This cost builds up quickly if you need to process a lot of information that could be processed and deposited elsewhere.
PTI: To what extent can blockchain benefit small and medium enterprises, as well as larger carriers and operators?
SK: We are using blockchain to digitize external document flows between companies. Not all companies will have an EDI connection, so in a way this is an opportunity for small and medium enterprises to interact on the same level with the bigger ones. This makes them better included in global workflows.
PTI: How do you see the conversation around blockchain debate developing in 2020?
SK: We expect the actors in the market to be steering their solutions more in the way of the interoperability and interconnectivity of blockchain-based platforms.
Interconnectivity will be the most important topic. There is no “one solution to rule them all”, so everybody will need to interact to enable the supply chain business to move forward with new technologies.
And I don’t mean just maritime shippers – there are banks, logistics providers, freight forwarders, platforms, exporters, and importers who all need to be on board.
To achieve that, we need to establish standards. That is what will separate technology providers into winners and losers.
CargoX is proud to have recently completed the stage of integrating the public Ethereum blockchain-based Smart B/L™ with the RoadLaunch permissioned Hyperledger and Stellar-based logistics solution with FactR wallets.
Users can keep records of their data and documentation on several blockchains, all in one single-window application.
That, for us, is good progress – and we can take integrations even further. But the logistic tech industry needs to establish a common language – a standard.
Only then will manufacturers, banks, shipping line operators, and public agencies be comfortable using it.
CargoX is already doing first steps in that direction!