The shipping industry has undergone significant changes in the last two years. The pandemic substantially disrupted the global supply system, resulting in many canceled orders, spontaneous freight movements, and substantial losses. Furthermore, shipping delays and shipping congestion at several ports raised transportation expenses. One of the critical reasons for recent losses was the lack of real-time information at the disposal of transportation companies.

The shipping industry has long been thought to be “behind the curve when it comes to technical innovation.” Even today, many of the old processes are time-consuming and error-prone, requiring paperwork to pass through numerous layers of approvals from customs, tax officials, and health officials, all of whom are sometimes separated by multiple geographic and linguistic obstacles. The use of blockchain technology, often known as “smart shipping,” can help the shipping industry become more efficient.

9 Industries that will be changed by Blockchain

Shipments Can Be Better Managed

Blockchain has emerged as a critical component for effectively sharing data and information in the corporate world. Adoption of the technology allows shipping industries to have near-real-time access to data for tracking orders, accounting, production, scheduling, and shipping. Blockchain has the potential to reduce the problems that have long plagued the shipping sector and make it more efficient. For example, the world’s largest retailer uses blockchain technology to automate the management of shipments-related invoice data and payments processes among 70 third-party freight carriers across the globe. By eliminating costly reconciliation operations, protracted payment delays, and invoicing fraud, the organization has increased supply chain profitability.

By boosting supply chain transparency, lowering risk, and improving efficiency and overall supply chain management, blockchain-driven supply chain innovations can create excellent business value for the shipping sector.

Also, read – Cambodian Rice Exporter Taps Blockchain for Better Supply Chain Management

Reduce fraud and boost productivity

Blockchain is a distributed ledger of transactions that is replicated near real-time across the whole network to retain a single source of truth. It has the ability to bring all parties together on a single encrypted platform, including buyers and sellers, shippers, and carriers. Real-time tracking, accessibility of cargo data, speedier receipts with fewer errors, and lower costs are the main advantages of shipping processes. Aside from process optimization, Blockchain can assist in facilitating, executing smart contracts, and brokering maritime insurance, among other things.

Smart Contracts can be created using Blockchain. Smart contracts are computer programs that run on the blockchain network by the terms and conditions of existing contracts between the parties involved. According to the agreement and Standard Operating Procedure (SOP) requirements, the code automates the flow steps.

Getting Rid of Risk Uncertainty

In marine insurance, Blockchain offers the ability to reduce risk uncertainty. Insurers typically do not have real-time information about the risk associated with any shipment. By expediting operations, enabling all stakeholders (insurers, shipping industries) to access data, and integrating the essential information with insurance contracts, Blockchain can be utilized for risk assessment and claim handling. Major insurance companies want to employ Blockchain to build a 360o secure network across the shipping supply chain, giving them a threefold advantage: better risk assessment, data-backed and safe underwriting, and improved client experience.

The Indian government has begun to use Blockchain to track internal trade in a pilot program. It has launched a pilot Electronic Cargo Tracking System (ECTS) to track shipping containers and protect digital paperwork (e-bills of lading).

Conclusion

Many things are preventing Blockchain technology from being widely adopted in the industry. The most significant of these is the high cost and lack of technical training. The utilization of open APIs across data interfaces and the availability of an end-to-end digital infrastructure with standards across the supply chain will be critical to the success of Blockchain. If done correctly, Blockchain has the potential to provide the shipping sector with much-needed time and cost savings.