The use of block chain as a disruptive technology has already made inroads into the shipping industry with the launch of the world’s first global platform using the technology for the marine insurance industry in September.
This platform, launched by Ernst & Young and Guardtime in collaboration with Maersk, Microsoft and several key insurance industry partners, promises to change the way marine insurance is handled, with a focus on increasing transparency and better pricing.
These are characteristics that can also be applied to the ship management industry, Fleet Management gm and assistant to md Vikrant Gusain told Seatrade Maritime News. While conceding that not all of the thousands of shipments and transactions a typical ship management company goes through in a month can be put on a block chain, he said if 60% to 70% of the most important transactions can be captured that would help improve transparency significantly.
This would have benefits all through the system, from providing captains more clarity on when their spares will arrive, to giving owners more accountability on cash-outs and payments and expenses, Gusain added.
Anglo-Eastern ceo Bjorn Hojgaard saw other applications as well. “I can see the potential value for anything where title is important. So when ships are bought and sold, or even for freight contracts and bunker transactions,” he said.
Hojgaard noted however that the relatively slow speed and inefficiency of dealing with a large volume of transaction is a disadvantage in using the technology for many parts of the ship management industry.
Piesse however does not see it as being much of a problem. The key issue is scalability rather than speed per se, he said. By doing things a bit at a time rather than processing huge amounts of data at one go, transaction speeds can be significantly improved.
Indeed the industry is constantly coming up with solutions. For example there has been work done on a technology called “sharding”, which essentially splits the network into smaller pieces, or shards, to boost transaction speeds.
The other key issue is getting the block chain to gain acceptance by signing people onboard. Giving incentives along with the tokens that are needed to use the system is one way to boost usage and currency.
Piesse acknowledges however that there are still barriers to acceptance such as resistance to change that may be harder to overcome. Interoperability is also an issue, with the industry having to come to terms with setting out common standards and platforms that all can use.
Change however is no doubt coming to the shipping industry. With giants such as UPS and Maersk making bold first moves into the space.
UPS has announced that it will join the Blockchain in Transport Alliance (BiTA), a forum for the development of blockchain technology standards and education for the freight industry which hopes to spur standards development for the shipping industry as a whole by implementing a secure blockchain system.
Apart from the marine insurance tie-up with Microsoft and Guardtime, Maersk is also working with IBM on a blockchain solution that will help to digitize the supply chain process and reduce paperwork and the associated security risk that entails.
“The technology is getting much more robust and everyone is getting in,” said Piesse, warning that the fear of missing out is very real.