Blockchain Technology Could Resurrect the Shipping Container Industry
It’s no secret that the $150 billion global shipping industry has been under immense pressure since the financial crisis of 2008, forcing operators to develop increasingly creative methods of streamlining costs and improving efficiency.
They say necessity is the mother of invention and this has led some smart shipping industry bosses to explore the potential of utilizing the blockchain platform (on which the world’s new cryptocurrencies are based) to modernize administrative processes and significantly speed up the time it takes to process a steel shipping container, as it makes its journey from port-to-port.
Reducing Spoilage of Steel Shipping Container Cargoes
The movement of intermodal, steel shipping containers generates an incredibly complex paper-trail, due mainly to the large number of international jurisdictions and regulatory bodies that are involved in the complex process. For shipping operators and their customers, it can be a logistical nightmare, not to mention a costly one.
A single conex box may have to pass the scrutiny of over thirty different organizations before it reaches its final destination. If an insulated shipping container full of mangoes arrives at the Port of Houston from India and is found to be missing a specific travel document, it may be held up for hours or even days while the issue is resolved. As the load is perishable in nature, it could result in a predetermined period being exceeded, after which it’s considered spoiled. Innovative technology, using sophisticated, blockchain-based systems, could eliminate this risk.
Reducing the Cost of Shipping Container No-Shows
Wastage within the global shipping container industry, due to so-called ‘ghost bookings’, non-arrivals and overbookings, is estimated to cost operators an astronomical $32 billion per year. 300 Cubits, a Hong Kong-based company, is seeking to address the problem by introducing a digital token, called a TEU.
Unlike currency substitutes, such as Bitcoin, TEU’s are programmable, digital entities with unlimited applications. In this instance, they can be traded for all sorts of transaction and administrative tasks within the shipping container industry. A contract is written into the blockchain code and executed when triggered by an event e.g. the mangoes’ expiration date. The beauty of this system is that all the data is held in one place, accessible via password by all stakeholders. Losing an important piece of paper documentation will be a thing of the past, as will spoiled mangoes! Costly no-shows and overbookings will also be discouraged, as deposits must be paid for in advance using TEU’s.
Global Shipping Industry Players Get On Board
Some of the world’s largest shipping lines are getting excited by the potential of blockchain-based supply chains. Huge Danish operators, Maersk, for example, are currently teaming up with global tech giant, IBM, with the aim of completely digitizing the administrative process from end-to-end.
Such initiatives are predicted to save the embattled shipping container industry billions of dollars a year in the long-term, by reducing fraud, waste, transit times and staffing costs. It will also improve inventory management and accountability. Current administration outlays are estimated to be in the region of one-fifth of overall transportation costs, which should be significantly cut.
Revolutionizing the Shipping Container Industry
Shipping companies, freight-forwarders, port authorities and customs offices will all eventually be networked under the radical new system, bringing the whole shipping industry into the 21st century and benefiting all parties, including customers.