The shipping industry has been given a fresh opportunity to strengthen the security of their data that could spell the end of paper documentation, after a five-organisation consortium developed a blockchain solution that could also bring annual cost savings of hundreds of millions of dollars.
AB InBev, Accenture, APL and Kuehne + Nagel and a European customs organisation has devised and tested a system on 12 real shipments that does away with physical and even digital documents, replacing them with a form of access that is securely protected by blockchain. Should the technology enter operation it would help to streamline the process and improve security; international shipments typically require more than 20 different documents – many of which are often paper-based.
Making that documentation particularly susceptible is the fact that around 70% of the data contained within them can be replicated, opening up the very real possibility that information can be forged that could at the very least bring about major delays. A distributed ledger technology, blockchain establishes a shared, immutable record that lends itself well to international shipping. This is because each company’s data is inherently resistant to modification, thanks to a near-impenetrable level of encryption that requires confirmation from all participants in the network before any changes can be made.
Not a new concept for shipping, Transport Security World reported in January that IBM and Maersk had launched a joint venture to apply blockchain to its global trade networks built on open standards and designed for use by the entire global shipping ecosystem.
According to the consortium behind the latest blockchain system, its use can speed up the entire flow of transport documents, reducing the requirement for data entry by up to 80%, according to the consortium, a process it says would simplify data amendments, streamline cargo checks and reduce the risk of financial penalties for customs compliance.
One of the companies involved in the 12-shipment test, APL, was adamant the new system would accelerate the digital transformation of the container shipping industry, while another, Kuehne + Nagel, said it would create real benefits for those using it. “Blockchain is one of the most promising technologies in logistics. It has the potential to digitalise many of today’s paper-based processes and overcome the multitude of different interfaces,” said Martin Kolbe, Kuehne + Nagel CIO.
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