Nevermind the blockchain, here’s the real issue…
It’s a fascinating concept isn’t it? The idea of a database that can not be changed, can never be corrupted (morally or otherwise), is completely secure and yet available for public consumption at any time. Every single transaction, be it monetary or otherwise, is verified by multiple nodes around the world, and only once that transaction is verified is it considered legitimate and its details permanently added to the record.
Blockchain has only recently hit the headlines in the maritime industry with key players such as Maersk teaming with IBM and the Blockchain in Transport Alliance (BiAT) all making waves over the last 12 months. But in reality, it was created in 2008 to underpin Bitcoin, the so-called trading currency of the dark web. Its creator, or indeed creators, are known only by the pseudonym, Satoshi Nakamoto, and their sole aim was to cut out the middleman and give birth to a record of ownership that has no central authority; it is the very definition of a democratized system.
A risky decision
Looking at it from a vessel perspective, surely blockchain is the thing of an insurer’s wildest dreams; here is a record that no man can amend or falsify to suit their needs, every single entry is recorded and monitored and can be used in a court of law if required. And yet, here we are in 2019 with the most advanced technology the world has ever seen at our fingertips, and we are still putting pen to paper to record the verification details of containers worth hundreds of thousands of dollars.
We have not progressed, we are in effect, still in the dark ages. We still use paper logbooks to detail the movement of containers on and off on each vessel. Paper log books that can be manipulated, erased or lost all together at a cost of millions of dollars. A cost which is reflected in the P&I premiums that we pay, the freight costs and the profit required for each vessel to undertake such risks.
Without wishing to point fingers or get into some heavy legal wrangling, there have been cases where falsifying logbooks to protect the guilty have occured, google it and see for yourself. In such cases, proving the wrongdoer is nigh on impossible because, let’s face it, who would own up to such a spectacularly expensive mistake? We live in a litigious world, if there is a blame there is a claim and the stakes have never been higher; profit margins are down, fuel costs are set to skyrocket and the endless rounds of legislation and upheaval make shipping a challenging game to be in. Blockchain eradicates this uncertainty and risk almost entirely, so why are we still putting pen to paper to record the movement of the precious cargo container vessels carry? It cannot be because it is easier, any mariner will tell you that the process is laborious, prone to human error and one of the jobs that no one really wants to do.
One size doesn’t fit all
Blockchain may be the answer to our prayers in respect of transaction data flows and honestly, I hope it is. But implementing it isn’t an easy task, it requires swathes of clever IT folk and all parties involved to take on the system. Forgive me for saying but I very much doubt it is a solution that will be taken on by the small to medium shipping companies in our industry, they simply don’t have the infrastructure or resources to do so. In recent years the latest shiny technology seems to engulf us all and everyone talks about it but very few can really put their hands up and say “yes, we have implemented this throughout our business”. Take Electronic Navigational Charts (ENC’s) for example, yes vessels use them to navigate, but paper charts are still held onboard. In many cases, we’re not just talking about a few ‘get me home’ charts, we’re talking about drawers and drawers of charts that require regular updating. A task not dissimilar to the noting of cargo in paper logbooks. It is arduous and painstakingly slow.
Small wins matter
Blockchain may be the solution of the future but right now fleet managers are under pressure to reduce fuel consumption and improve their service to cargo owners, and blockchain isn’t going to do that. Rather than go for the all singing all dancing system that is the favourite of the month (Internet of things we’re looking at you), wouldn’t it be more prudent to implement solutions that can actually take a manual task and digitise it?
Quick wins, even if they are small, are still wins and in this day and age with all of the challenges we face, a win is better than sitting on the sidelines talking about systems that only benefit the few. We’re living in a digital age with so many opportunities open to us, but let’s not forget the real issues that are staring us in the face.