Technology is king. More and more aspects of our lives are going digital and online. Not surprisingly, the shipping industry is being swept up in the tech wave, too. Have you heard of blockchain? It’s starting to catch on among shipping companies as a way to encrypt, store and transmit data.
Blockchain and AI for shipping
We recently ran a blog on “smart manufacturing” that describes a future where assembly lines and warehouses speak to all the other elements of the supply chain with minimal human intervention.
Distributed Ledger Technology (DLT) vs. Blockchain
A distributed ledger is a database that is stored across several computing devices (aka “nodes”). Each node replicates and saves an identical copy of the ledger. Each participant node of the network updates itself independently. Because they remove the need for a central authority, distributed ledgers carry the potential to both speed up transactions and reduce their cost.
Blockchain is a type of DLT. However, the structure of the blockchain makes it distinct from others. Data on a blockchain is grouped together and organized in blocks. The blocks are then linked to one another and secured using cryptography.
Blockchain technology is used for undertaking and tracking a variety of types of transactions. The management of these transactions – often financial (think Bitcoin) or logistical – is undertaken collectively by the network of participants. All participants can see transactions along the chain and they must agree before a transaction can be confirmed or modified. It is generally considered a very transparent and secure system.
Global Shipping Business Network (GSBN)
This November, nine ocean carriers and terminal operators signed on to form a consortium to develop an open digital platform based on DLT.
This platform, titled Global Shipping Business Network (GSBN), aims to provide a digital baseline by which to connect all stakeholders along the supply chain: carriers, terminal operators, customs agencies, shippers and logistics service providers.
The consortium’s members intend to establish standards to facilitate the seamless sharing of documents and data across all stages of the shipping lifecycle.
The first planned application will pertain to the documentation of dangerous goods – it will allow shippers to digitize and organize dangerous goods documents and automatically connect with relevant parties to streamline the approval process. GSBN plans to have this function available by December 2018.
TradeLens
In order to take full advantage of the benefits of DLT, though, it needs to have many participants. More members makes for a more robust system better able to reach its potential as an efficient and secure data-sharing tool. For this reason – and due to the fact that the number of participants in TradeLens so far is relatively low – there remains some scepticism about its current functionality and its ongoing utility to the industry.
But this is new. This is early days for DLT and blockchain in the shipping industry and you can certainly count on expansion and evolution of all this new tech in our lives.
And hey, here at Cole, we’re learning, too. Get in touch with us today to learn more about blockchain and DLT and how they are influencing the future of shipping.
Information provided by: Canadian Customs Consulting Dept. - Cole International