Ports and terminals have evolved since the 2010s, entering a fifth stage of evolution characterized by their digital transformation and alignment with Industry 4.0 practices. Cooperation between agents is a key element and integration not only involves Port Authorities, Terminals, Port users, related Port Service Providers, but also the city and interior of the port, all well beyond the Global Supply Chain.
All this grouped together with technologies such as the Internet of Things, detection solutions, cybersecurity, horizontal/vertical system integration, cloud computing, 3D printing, big data, business analysis, augmented reality, simulation and modeling have been the pillars of Industry 4.0. It is worth mentioning Blockchain and Smart Contracting as a new technology, in which we are in a stage each day closer to understanding that we are in a sufficiently mature technology in the port and maritime industry.
Container headquarters in the port of Rotterdam
One of the benefits of Blockchain is the reduced need for documentation. “For international shipments, companies and customs officials are required to complete more than 20 types of paper documents to transport goods from the exporter to the importer and vice versa.” Most of these documents do not provide real-time visibility and data quality, which often leads to obstacles in financial reconciliation. ”
Paperless trading has a number of potential benefits, including lower shipping and communication costs, lower paper handling costs, reduced errors and faster revenue, reduced trade finance costs, and reduced inventory.
The Blockchain platform can potentially solve the following problems: outages in cargo tracking (as shipping involves numerous stakeholders) and lack of data and transparency (due to poor data management and lack of Data Management). It is also possible to optimize vehicle routes in real time, which positively affects both congestion and carbon emissions, improving the ecological aspect of sustainability.
Due to the confidence provided by Blockchain platform, traceability and transparency can be improved, for example, by increasing operational efficiency, improving sustainability performance, managing the needs of stakeholders in advance, reducing illicit practices and improving the flow of information and notification in both parties collaboration processes.
All shipments can be tracked in real time, from origin to delivery. Paper documents are replaced by smart contracts and unnecessary parts of the transport process are being eliminated, making the global logistics sector less centralized.
The real-time process with full credibility of cargo tracking using Blockchain technology provides shipping industries and ports an advanced planning of the ground resources they need once the goods reach their destination, thus streamlining terminal operation and reducing costs.
Thanks to the automation of smart contracts, shipowners can transparently present their services and availability periods to charterers. Charterers may similarly indicate their demand for service. All this can be achieved without the need for an intermediary in the process (Shipbroker) leading to cost reduction, error reduction and service speed improvement.
The transport sector and seaports involve many stakeholders and documents. One of these documents is the bill of lading. The bill of lading is one of the most important and valuable documents in the shipping industry, recognizing that the cargo has been shipped and may contain details such as quantity, descriptions, weight, cargo, port of unloading and shipping marks. (According to DHL information, up to 10 percent of bills of lading may contain incorrect data that could lead to disputes and litigation.) Blockchain technology and Smart Contracts have an important role in mitigating the aforementioned problems.
Regardless of that, blockchain can greatly affect the digitization of ports. This will be particularly evident in the development of smart contracts with the further implementation of the blockchain.
Blockchain technology applied to port management will make it possible to store and share information on ship cargoes, and improve financial operations and contracts, among many other possibilities.
As success stories in the use of Blockchain and smart contracts we can detail:
The Port of Rotterdam has been involved in various Blockchain projects for several years. The importance of Blockchain (a digital enabler in transformation processes) and the importance of collaboration for Maersk and IBM, involved Blockchain-based joint development to digitize global trade, calling it TRADE Lens.
The Port of Rotterdam has its own pro-life network on the IBM platform. Third-party applications can be connected to this platform, as an example Rotterdam presented a new pilot project based on the blockchain to handle containers more safely and efficiently by eliminating the use of a PIN.
According to IBM, a joint Blockchain initiative could significantly reduce the cost and complexity of trading. CMA, CGM and Mediterranean Shipping Company S.A. have recognized the importance of Blockchain by linking the processes of their companies to TRADE Lens.
According to TRADE Lens, it enables the connection of participants, information exchange and collaboration in the shipping supply chain. Members gain deep insights into their data and can collaborate digitally as cargo moves globally, helping to create a secure, transparent and unchanging record of transactions.
According to Maersk, it managed to save billions of dollars after joining with a strategic partner like IBM to manage maritime containers through Blockchain.
The port of Veracruz, Mexico, has a project in operation on Blockchain for a Blockchain port community system. The objective is to improve the efficiency of freight transport and logistics at the port, as well as the optimization and streamlining of carrier incorporation processes.
Another case is the Cargo Community System powered by Blockchain in the port of Marseille Fos. Data in the Cargo Community System is collected from a variety of sources, for example, freight forwarders, shippers, customs brokers, ports and truckers. The goal is to streamline and speed up the exchange of cargo data between all stakeholders (public and private).
According to the implementation of the blockchain and smart contract solutions, the architecture of the central control and information system is broken, and in doing so, in the framework of the port logistics processes, it fosters existing and new business collaborations of different actors in the comprehensive port environment and throughout the supply chain This is especially interesting and beneficial for SMEs due to the low participation costs.
IItaca Technologies Iberia, as part of the IBM Blockchain Platform, can help you in the design, development, start-up and maintenance of your solutions in Industry. We are delighted to help. We look forward to your contact.