A Review of Blockchain's Potential in the Shipping Indsutry

Posted by MuBlockchain on November 12th, 2020

Discover how the shipping industry can transform itself with blockchain supply chain management and blockchain smart contracts, enabling enterprises to be more successful and efficient.

Current Challenges in the Shipping Industry

Despite the latest technical developments, shipping is still a conventional industry. In many instances, the procedures adopted by the stakeholders are mostly outdated. Many maritime deals usually include a wide range of records, such as vessel and freight purchase arrangements, charter group contracts, transportation bills, port papers, letters of credit, and others.

These papers continue to pass across a lengthy string of participants, as both the different transfers to be received and the carriage and distribution of the shipment to occur are of high priority. See, for instance, the lading bills and the long route they pursue: they travel through many banks starting from the shipping companies at the loading port before they meet the recipient. The steps followed in the process are complex and time and cost consuming. Thus, it gets normal that shipments arrive at the releasing point prior to the lading bills.

 

Blockchain Technology

The shipping industry is exploring the potential of blockchain technology in an attempt to automate existing procedures. Blockchain tech builds on fully decentralized open-source peer-to-peer applications, and the network collectively handles all purchases or issues new currencies. The software uses a cryptographically encrypted blocks’ chain for the administration of all these transactions and is used as a public ledger that tracks all transactions.

These blocks get timestamped and are related to the previous blocks in the chain. Further, the network reaches a consensus to validate the authenticity and completion of each transaction.

. It will not change or be erased until the information is stored in the block unless the following blocks are either changed and the change/deletion is agreed by the rest of the network. User intrusion in the blockchain thus appears unlikely and the device is completely waterproofed.

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MuBlockchain
Joined: October 27th, 2020
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