Can blockchain, the distributed ledger technology behind bitcoin and other cryptocurrencies, speed up international trade, historically beleaguered under paperwork and bureaucracy?
Container shipping firm A.P. Moller-Maersk and IBM think so, reports Reuters. The companies, each a giant in its industry, have teamed up to create an industry-wide trading platform that they say will accelerate global trade and also save billions of dollars in the process.
Blockchain is finding all sorts of interesting use cases outside digital currencies. It’s found a welcome home in supply chain transparency and management, for example. All “blockchain” means is that data is stored and shared across a network of individual computers, so why limit its use to cryptocurrencies?
Maersk and IBM say that blockchain could help manage and track tens of millions of shipping containers around the world, simply by migrating all that tracking data from paper to digital.
Reuters gave the example of a refrigerated goods shipment bound from East Africa to Europe. Today, that shipment goes through 30 people and organizations and requires 200 communications to reach its destination, Maersk told the publication. Documenting all of that can comprise as much as 20 percent of the total shipping cost. Just think of the potential for human error in all that.
“The big thing that is missing from this industry to digitize and unleash the potential of the technology is really to create a form of utility that brings standards across the entire ecosystem,” Maersk’s Chief Commercial Officer Vincent Clerc told Reuters.
The biggest obstacle will be adoption. For this to work, Maersk and IBM must get shippers, freight forwarders, ocean carriers, ports and customs authorities on board. Without some degree of ubiquity, the platform can only be so useful.
However, it may be an easier sell today than it would have been a year ago, given the rising popularity of blockchain (for use cases where the technology makes sense, and also for ones where it doesn’t).
The threat of cyberattacks could encourage players throughout the supply chain to view new approaches with a more open mind, considering the disruption wrought by last year’s cyberattack that left Maersk scrambling for weeks to bring its IT systems fully back online.