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Bogusz Wiśnicki
Maritime University of Szczecin
Faculty of Engineering and Transport Economics, Poland
E-mail: [email protected]
Abstract
Blockchain technology is mainly implemented in the financial services. However, there are more and
more companies from different industries considering the possibility of using this technology. Potential
benefits of blockchain are also recognized in logistics management. In sea shipping similar to other
transport modes the application of blockchain-based solutions is still a new phenomenon. The paper
presents a growing interest in blockchain technology in the area of transport and logistics and in
maritime logistics in particular. The main aim of the paper is to classify current and planned
applications of blockchain technology in sea shipping. To achieve this goal, two research methods were
used: web content analysis and multi-case study. The results show that there are several container
shipowners active in the blockchain projects, however, in terms of tonnage, they represent as much as
84% of the world's container fleet. Four main ways of developing blockchain technology in the field of
maritime logistics management are distinguished: shipowner’s projects, ICT providers’ projects, supply
chain operators’ projects, dedicated consortia projects. The main fields within which blockchain
technology is currently tested or already implemented are identified as: contracting and documentation
flow (e.g. Bill of Lading), smart contracts, container/cargo track-and-trace, marine insurance, ship
register system, bunker tracking system, crew certification system. The results of the paper have some
managerial implications. They can help in making strategic decisions by sea shipping companies and
maritime logistics operators to decide if it is worth to engage in such projects and choose the best option
for themselves.
Keywords: blockchain, sea shipping, maritime logistics, maritime supply chain management
1. INTRODUCTION
Blockchain technology offer a new way people and companies exchange value and information
over the Internet. The first application of that technology was Bitcoin – a digital asset which works
in a distributed data structure based on peer-to-peer network, without the use of any trusted third
party (Queiroz, Telles, Bonilla, 2018). Blockchain technology allows the running of small
programmes (i.e. smart contracts), which potentially enable trusted automation of contractual
relations between trading parties (Hofmann, Strewe and Bosia, 2018). Blockchain technology is
2. RESEARCH APPROACH
The research method used in this paper falls within the scope of website content analysis and
multi-case study. The main research was carried out with the use of two research methods: web
content analysis and multi-case study. The first method was used in order to identify the quantity
and context of publications dedicated to technology blockchain. The second method allowed for
the analysis of several projects devoted to implementation of blockchain technology
representative for maritime logistics.
The web content analysis method was used twice in two different scopes of analysis. Firstly,
in a wide range of professional web portals monitoring events on the transport and logistics
market, secondly in the portals of the largest container shipowners. In both scopes the interest in
blockchain technology was measured by the number of times the key term blockchain appeared.
The starting point for this analysis is the assumption that the interest in blockchain technology
among practitioners and managers could be assessed by the number of publications in industry
press and professional web portals devoted to the actual market issues. Managers making
decisions about implementing a new solution and investing in technological innovation often
make their opinion about expected possible results based on information obtained from
professional press, industry web portals and conferences, instead of scientific publications
published in prestigious journals. Hence the decision to focus in this paper precisely on
information provided for practitioners and managers posted on industry websites.
The selection of container shipping companies for the second scope of the web content
analysis is motivated by the fact that they are the best integrated in maritime logistic chains
(Wiśnicki, 2018). Standard container units in a great way facilitate this integration. The 100 largest
container operators listed in the Alphaliner TOP 100 ranking were included in the tested sample.
During the research based on the analysis of websites content, it was verified which shipowners
publicly disclosed their involvement in blockchain projects, including blockchain-based tests as
well as commercial tools.
Topics regarding the application of blockchain technology were often raised and discussed
in the maritime media. Some sea shipping portals pay more attention to technology matters than
others. Porttechnology.com gained the biggest number of posts because it is focused on
technology matters. The number of mentions on general maritime information portals varied
between 205 and 1040. Topics related to the use of blockchain were much more popular for sea
shipping than for rail or land transport, but very similar to air transport. The biggest disproportion
between sea shipping portals in relation to rail transport is observed, where such a reference
appeared only once. Similar dependencies are visible in Polish online media, where the marine-
focused portal had 86, and the railway portal had only 2 posts. Among the surveyed e-portals most
about the use of blockchain technology was written in the media devoted to supply chain
management. Many of those articles were about the effects of new technology on flow of
documents and information in a strategic sense, not on the physical flow of goods. In this type of
approach, the carrier may represent any branch of transport.
In scientific research papers the topic of blockchain-based solutions in maritime logistics is
not frequent at all, whereas on the maritime industry information e-portals is quite popular.
Articles published on sea shipping e-portals and in magazines for practitioners in 2018
mainly announced the creation of new consortia, gaining new partners and plans for carrying out
tests and experiments. Many new projects were initiated in 2018, so their results are not yet
available. If any information about the preliminary results of tests are made public, it is done in a
rather modest form. Analysed articles also discussed doubts and concerns expressed by market
experts or managers, mainly regarding market architecture and systemic solutions.
The analysis based on shipowners’ websites shows that mainly the market leaders are
interested in participation in the development and use of blockchain-based tools. It is significant
that the first eleven shipowners are engaged in such projects. Beside them, two more shipowners
are interested in this type of solutions - Seaboard Marine (rank 36) and Transworld Group (rank 41).
The former joined the platform created by APM-Maersk and IBM, while the latter develops its own
solution together with other companies of its own capital group. Shipowners active in the
blockchain projects, in terms of tonnage, represent as much as 84% of the world's container fleet.
This commitment takes various forms.
The pioneer in the field of blockchain-based digital platform designing for global trade is
APM-Maersk, which in 2017 together with IBM began work on creating such a solution called
Tradelens. Other entities joined the system in the next stages, such as PIL (ranked 10 in table 1), ZIM
(ranked 11) and Seabord Marine (ranked 36). The entities forming the platform belong to various
functional areas of the supply chain. These are: beneficial cargo owners, 3PL, inland transport
operators, customs/government authorities, ports and terminals, ocean carriers, financial service
providers, software developers (Tradelens, 2019). To get as many new members as possible
Tradelens convinced them that their goals will also be met by the given platform. In April 2019,
more than 100 organizations participated in the Tradelens platform.
During the construction and testing phase, Tradelens was associated only with one
container operator with the largest market potential. This probably raised some concerns among
other ship operators regarding the neutrality of this solution. Therefore, the remaining giants in the
container market have not decided to join Tradelens but formed the alternative consortium
instead. The Global Shipping Business Network (GSBN) was established in November 2018 and is
only in the design phase. The consortium includes: CMA CGM, COSCO Shipping Lines, Evergreen
Marine, OOCL, Yang Ming, DP World (port operator), Hutchison Ports (port operator), PSA
International Pte Ltd, Shanghai International Port, CargoSmart (solution provider). The biggest
difference between Tradelens and GSBN approach is the beginning phase of the platform
development process. Tradelens was created by one shipowner, and subsequent entities are
joining the solution. In contrast, GSBN is not intended to be associated with a single shipowner, but
Shipowners initiated projects aimed to create universal tool for global container shipping
market. This category examples are Tradelens - the tool Maersk is behind, and much wider GSBN
consortium. Ibrahim Gokcen, chief digital officer at Maersk, said: “The projects we are doing and
with IBM aim at exploring a disruptive technology such as blockchain to solve real customer
problems and create new innovative business models for the entire industry” (Groenfeldt, 2017).
Consortiums always include a technology vendor. In the tool development process more and more
participants performing various functions in the supply chain are invited to join a platform.
Projects created by ICT providers aimed to develop “neutral” platform not decisively
controlled by any of the entities that use their services. This may be the biggest advantage and
most desirable trait that will determine platforms being wildly adopted. On the other hand, if the
platforms created by ICT companies (often start-ups) are not joined by the market leaders, then it’s
One of the applications is the blockchain platform for the insurance sector. The first such
platform is called Insurwave and was developed in collaboration of APM-Maersk, Ernst&Young (EY)
and their partners (blockchain company Guardtime, Microsoft Azure, broker Willis Towers Watson
and insurers MS Amlin and XL Catlin). The aim of the platform is to integrate information from
clients, brokers, insurers and third parties with insurance contracts in a standardised, secure and
transparent format (Faulkner, 2017). As in the case of applications in maritime logistics, here also
the involvement of the largest container shipowner allows testing the solutions immediately on a
large scale. The platform was launched in 2018 and is supposed to support more than half a million
automated ledger transactions and help manage risk for over 1000 commercial vessels in the first
year of its activity (EY, 2018).
Another pilot solution for sea shipping industry is the blockchain-based seafarer
certification system. The demonstrator project is funded by the Lloyd’s Register Foundation
through a consortium called Maritime Blockchain Labs. The aim of the tested tool is to help tackle a
number of seafarer documentation issues. It is mainly in interest of crew agencies, shipowners,
training and education entities, regulatory bodies and seafarers themselves (Clayton, 2018).
The subject that has been also tested within blockchain technology pilots is bunker
tracking. In this type of projects, the Maritime Blockchain Labs works in cooperation with
shipowners such as NYK and CMA CGM and Port of Rotterdam. Biofuel was used. The aim of
conducted demonstrations was to test the ability of end-to-end traceability of marine bunkering
transactions from storage to the vessel’s fuel tank, thereby providing assurance to shipowners and
charterers (MBL, 2018).
The next area in which the blockchain tests are carried out is a ship register. The first
classification society that decided to make such an attempt has very long tradition and is well
known on the maritime market. Lloyd's Register of Shipping announced the launch of prototype
blockchain-enabled class register in September 2018. The idea is that the blockchain-based ship
register in a form of a platform provides trusted and up-to-date information on ships, which
enables more efficient execution of many transactions on the market, such as financing, insurance
and payments (Lloyd’s Register, 2018).
4. CONCLUSIONS
Based on the analysis of the state and perspectives of blockchain technology implementation in
maritime logistics management conclusions can be formulated that allow for the answer to
previously formulated research questions.
Shipping company management toward the widespread use of digitization and future
technologies is one of the most important challenges faced by the maritime industry. The
implementation of blockchain technology in maritime logistics is still in the early stages. Currently,
we can talk about single implementations and some preparations to establish a market standard.
There is a great interest in this technology of containership shipowners, much bigger in
comparison with operators and carriers representing other branches of transport. This
disproportion of operators’ approaches can result in the diversity in the whole supply chains.
Motivations of leaders and members of project consortia testing blockchain technology
seem different and are not always possible to determine. One of the significant motivations seems
to be the desire to improve the competitive position on the market and the company's image. The
implementation of blockchain technology is undoubtedly a common trend and is positively
perceived by customers of carriers and logistic operators.
Containership operators are the leaders or key partners of most consortia implementing
technologies in maritime logistics. It is determined by their role in the supply chain. Among the
leaders of project teams are also ICT providers and operators of intermodal supply chains.
Implemented solutions, although tested on a smaller scale, ultimately have a global reach and an
unlimited number of users.
The analysed projects are currently at the stage of technology development, testing in
small scale real-market conditions or expanding the group of project participants. Blockchain
development potential depends on meeting specific technical requirements (level of process
digitization) and on openness for transparency connected with IT systems (common databases and
share of smart contracts). The fastest implementations in the entire supply chain are possible in
case of ownership links between entities operating on a given market, for example in the form of
alliances and sub-market holdings.
REFERENCES
Baker, J., (2018). Leading carriers launch new blockchain platform. Lloyd’s List, 06.11.2018
Baker, J., (2019a). Blockchain faces hurdles before widespread adoption. Lloyd’s List, 11.03.2019
Baker, J., (2019b). Standards will be key to success of blockchain in shipping. Lloyd’s List, 08.02.2019
Clayton, R., (2018). Industry partners eye blockchain records for seafarer certification. Lloyd’s List, 11.12.2018
Czachorowski, K., Solesvik, M., Kondratenko, Y. (2019). The Application of Blockchain Technology in the
Maritime Industry. In: Kharchenko, V., Kondratenko, Y., Kacprzyk, J. (eds.) Green IT Engineering: Social, Business
and Industrial Applications. Studies in Systems, Decision and Control, vol 171. Springer, Cham, 561 – 577