"We believe that this new supply chain solution will be a transformative technology with the potential to completely disrupt and change the way global trade is done," says Bridget van Kralingen, senior vice president, Industry Platforms, IBM. "Working closely with Maersk for years, we've long understood the challenges facing the supply chain and logistics industry and quickly recognized the opportunity for blockchain to potentially provide massive savings when used broadly across the ocean shipping industry ecosystem.”
Maersk, Microsoft and accounting firm EY also plan to launch a blockchain platform for marine insurance.
Blockchain not only enables automation, but is also much more secure than other types of solutions.
“A blockchain-enabled supply chain is highly resilient to cyberattack – a copy of the essential shipping data is stored on each node on a decentralized network, meaning that even if one node is compromised, the data is safe nevertheless,” Cleworth says. “The business case for connecting supply chains using blockchain is very strong. As the interface is easily adaptable to existing systems there is a very low barrier to entry. Any type of supply chain business, be it marine-, air-, or land-based, can take advantage of such a system – the cost savings that we envisage are as high as 90 percent, as a result of substantially streamlined processes.”
A number of other companies are also working on blockchain-enabled solutions. Kouvala Innovation has developed a system that uses RFID tags to communicate shipping requirements to carriers that would then bid on the move, and blockchain would track the shipment.
Colombian company AOS is also creating a solution based on IBM blockchain and the Watson artificial intelligence platform. The company plans to use sensors on the truck to provide additional information about shipment location and environmental conditions, and manage the entire shipment process via blockchain.
Samsung SDS also piloted blockchain in Korea, and South Korean firm Hyundai Merchant Marine completed its first blockchain pilot on a container vessel. The Port Authority of Singapore and shipping company PIL have also piloted blockchain with IBM, as has the government of Dubai.
The Chain Federation of Logistics & Purchasing also has launched a Blockchain Application Sub-Committee. Participants there believe that blockchain could even help streamline credit processes for small and mid-size companies that sometimes struggle with capitalization.
Blockchain could also help provide product authentication and make it harder for counterfeit goods to enter the supply chain.
There are some obstacles to widespread blockchain adoption. There aren’t many qualified blockchain experts and in order for these systems to scale, large manufacturers would have to mandate the solution to their trading partners. There also are latency issues with data validation.
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