Before we dive into the growing importance of Blockchain technology in ocean container freight industry, it is first essential that we understand the concept of the technology. Blockchain is a term that most of us have now heard of through different mediums, be it newspapers or the online media. But it is still one of the concepts that many people are unsure about; they fail to understand the true meaning and utility of the technology. In simple terms, Blockchain is a decentralized peer-to-peer network of records known as ‘Blocks’ that are linked through a complex structure of cryptography. The data stored in each ‘Block’ is resistant to any form of change/modification without effecting the entire chain, and is thus stored in a verifiable and permanent way. The technology is the latest medium that is gaining highest levels of traction from businesses to store their critical data. If we talk about it in simpler terms, it could be explained as the medium through which two business parties interact. The medium is in the form of ‘Blocks’, linked through difficult puzzles that have to be solved in order to gain access to the next set of Block.
Now coming to the container freight industry, we are all aware that the world today is a global village where everything is transported from one country to another. Whether we talk about fruits and vegetables, or electronic items, or even clothing and accessories, things are now not just limited to one geographical location. For instance the popular kiwi that was the trademark of ‘Down Under’ is now easily available in a tropical land like India. Therefore, it is safe to say, that today there is no such thing that is only available in just one part of the world.
However, the point to be noted here is that shipping is the main form of transportation that is used in moving items from one location to another. It is not only the greenest medium but is also the most efficient mode of transport. One thing, however, that poses as a major threat to freight shipment, is the massive amount of documentation that each shipment demands. Moreover, the paperwork is such that it is easily forged and can thus lead to dangerous forms of fraud.
In order to curb the same, an industry consortium including AB InBev, Accenture, APL, Kuehne + Nagel, and a European customs organization, has tested a system to use the software of Blockchain technology in shipping industry. The trial was conducted with 12 real shipments the results of which proved the biggest change in the cargo shipment industry. The results showed that the use of Block chain technology in shipping industry could reduce operational costs and further improve supply chain visibility. The consortium concluded that the process of Block chain could speed up the documentation process of shipping and further cut down the requirement for data entry by up to 80 per cent. To those questioning digital safety and threat of cyber-attacks too, the consortium said that the technology of Blockchain is the safest medium so far.
As block chain is also digitalization of the process, the future looks good for the same in Shipping and freight forwarding industry as well. There is already a visible change taking place in the freight forwarding industry, wherein digital freight forwarding companies or freight marketplaces are growing in India and world over at a high pace. LogarGo is one of the companies in the container freight aggregation industry, amongst the few Freight Market Places launched in India. What needs to be seen is how fast digital shipping/forwarding companies move towards Block Chain technology as part of the digitalization and not only for documentation but also for all the other operational transactions as well. With already a great push by the Indian Government under Digital India, and the needs of change towards automation for an industry being run traditionally for long, the future for Blockchain and digitalization looks good for shipping/forwarding industry.
Let’s wait and see how it changes and what are the impacts.