Supply Chain Commentary: The Future of Blockchain in Ocean Shipping
The potential for blockchain goes hand in hand with digitization. Blockchain will require digitization and can also help drive it with the goal of minimizing the manual processes that many shipping industry participants still use today.
Blockchain’s added value to digitization is authentication, non-repudiation, immutability of data, improved business process support through smart contracts, and data access control via channels to ensure the data is only visible to the parties who are entitled to see it.
Technology Summit Highlights Game Changers
Blockchain, along with the Internet of Things, topped the list of game-changing technologies discussed at INTTRA’s recent Technology Summit in Hamburg, Germany. INTTRA had the opportunity to host more than 150 senior industry executives at the summit and provided a forum for these leaders to share their views on how innovation and technology are changing ocean shipping, impacting organizations from large companies to SMBs.
The attendees told us they were most excited about how digitization and optimization has the potential to take an enormous amount of cost out of the industry while increasing overall efficiency. For INTTRA, that means the cost basis for all of our network participants decreases, putting these organizations in a significantly better position.
The Future Is Blockchain
One key obstacle to the adoption of blockchain is the number of organizations and their technical diversity. Simply put, there is wide variation between the technological capabilities of industry participants. A neutral network helps lessen this problem by delivering core services across the network that enable all types of organizations to participate, regardless of their technical capability.
This is relevant to all, but particularly SMBs. Industry participants need to be taking steps now, including recognizing that they likely don’t have the necessary IT resources. This means they need to identify the right partners and start the iterative journey towards digitization. It’s critical if they want to reduce their costs on par with larger organizations with more IT capability. If they don’t, they potentially will be left on the wrong side of the digital divide. Partners can work on their behalf to start moving their business processes to the network.
So the question is timing. When? It’s an easy question, but the answer is more complicated.
In the case of blockchain, the technology exists, but the timeline is predicated on the business benefits and the associated costs. It’s more about governance and administrative scaling to get everyone to play together. We will see neutral networks coming to the forefront of solving these issues in 2018 as they are industry-wide and individual organizations cannot solve these kinds of issues by themselves.
The one overriding thought that came out of the summit is an appreciation for how ocean shipping will become increasingly interconnected, and those who fully embrace technology and select strong partners will occupy the winning side of the digital divide. We will all need to work together to get there.