Thursday, November 23, 2017

Shipping: Every Link In The Global Trade Supply Chain That Blockchain Could (maybe) Transform

I strongly recommend the links in "Fintech: When Is A Blockchain Not A Blockchain?" including:
The FT's Izabella Kaminska Gives An Overview Of The State Of Blockchain And Reveals A Troubling Personal Detail
...By-the-bye I first saw Credit Suisse's point 2 done up decision tree style back in December in an article entitled "Why Blockchain must die in 2016":
The tree was based on an article at MultiChain's blog, "Avoiding the pointless blockchain project" which included the sentence: "If your requirements are fulfilled by today’s relational databases, you’d be insane to use a blockchain."
Sounds good to me.
 And for some reasons why blockchain may be more helpful to real businesses as opposed to finance stuff, read between the lines of:
"Is an Editable Blockchain the Future of Finance?"
So the lady asked, "Inquiring minds want to know: can blockchain reconcile 200% institutional ETF ownership?".
Sure, why not.
Of course this is no longer blockchain, it's some sort of database combined with an eraser head. We'll call it 'blockhead'....
Here's today's logistics post, from CB Insights:

Maersk and other maritime logistics players, which handle 90% of globally traded goods, are exploring blockchain to increase efficiency and transparency in global trade.
It currently takes a stack of 200 communications between 30 different parties to ship a container from Mombasa, Kenya to the Port of Rotterdam, according to a recent study by shipping carrier Maersk. With each additional piece of paperwork, the risk of fraud, miscommunication, and delay increases.
To combat this barrier to trade, Maersk is partnering with IBM to incorporate blockchain distributed ledger technology into its shipping process.

By allowing all parties in the global shipping supply chain to share information through a digitally secure distributed ledger, blockchain technology could revolutionize the maritime logistics space, eliminating the complex current system of disparate, expensive, and time-consuming paperwork.

Why blockchain for maritime logistics makes sense
Maersk and its 6 largest ocean shipping competitors, together, hold more than 50% of global maritime container shipping market share. Even if only these companies implement blockchain into their operations, it could significantly increase the speed of international trade, while also boosting transparency and reliability into the notoriously opaque container shipping industry.
Blockchain integration could also affect other players along the supply chain including freight forwarders, brokers, importers, exporters, manufacturers, brands, retailers, and beyond.

The potential significance of blockchain integration has attracted increasing media attention in recent years.
Other global supply chain players, beyond maritime logistics, are also showing an interest in blockchain. In August 2017, Walmart, Kroger, Nestle, and Unilever, among others, partnered with IBM to use blockchain to improve food safety through improved supply chain tracking.

While blockchain integration by these specific vendors could speed up their individual supply chains, blockchain adoption by maritime logistics companies, which help transport 90% of globally traded goods, could have a much further-reaching effect.

Maritime logistics players rush into blockchain
Beyond speeding up trade, blockchain has other applications in maritime logistics, spanning areas like cybersecurity, marine insurance, and seaport-related operations.

Prominent players in the space, such as shipping carriers and port operators are exploring these use-cases by partnering with large corporations, blockchain startups, and consortia (groups of independent companies or entities partnering to use blockchain technology).

We created a timeline showcasing select partnerships and initiatives in 2017 in the maritime logistics space. As can be seen below, activity has significantly increased as recently as July of this year.
Notes: Blue circles represent partnerships between various players in the maritime logistics and blockchain spaces. Orange circles denote partnerships and initiatives between maritime logistics companies and blockchain consortia.
The partnerships highlighted in this timeline can be grouped into the following categories:
Trade efficiency: In March 2017, Maersk partnered with IBM to integrate blockchain technology into its supply chain and shipping processes. As discussed above, partnerships like this have the potential to impact global trade by reducing complications in communication.

Marine insurance: In September, Maersk also partnered with blockchain startup GuardTime, corporates Microsoft and EY, and insurance companies ACORD, Willis Towers Watson, MS Amlin, and XL Catlin to launch a marine insurance blockchain platform. The platform simplifies marine insurance, a space also plagued by disorganized communication....

"10 Startups Making Ocean Container Shipping Easier"
Norwegian Government to Chip In $17 Million to Develop the First Electric Autonomous Cargo Ship
Shipping: "Value of Autonomy Questioned"
Shipping: "Amazon vs Maersk: The clash of titans shaking the container industry"
"TEU Tokens and Blockchain Could Shape the Future of Container Shipping"
"Maersk Tankers invests in quantitative hedge fund CargoMetrics"
Shipping: Despite $300 Million Revenue Hit From Cyber Attack Maersk Is Upbeat 
Shipping: "The True Implications of the Technology Revolution"
Shipping: Following Maersk,"Now CMA CGM signs with Alibaba for online booking of container space"
Shipping: A Warning To Freight Forwarders, The Good Times Are Over
Shipping: "Amazon Enters Trillion Dollar Ocean Freight Business" (AMZN)
Shipping: Maersk, Alibaba Team Up To Offer Space On Container Ships.