Danish shipping giant Maersk is set to implement a new supply chain management technology that was partly developed by the IBM Research lab in East Africa.
Maersk and IBM last week said they would begin using blockchain technology to manage and truck paper trail of shipping containers as they crisscross the oceans.
Blockchain is best known as the technology that underpins the world’s most successful cryptocurrency, Bitcoin. The simplest way to understand blockchain is to view it as the next iteration of that mainstay of bookkeeping— the ledger.
Blockchain digitises the ledger. It also distributes it. This means that a single data entry on the ledger is simultaneously stored in thousands, if not millions, of computers in a specific network.
Due to the distributed nature of information storage, blockchain has particularly been touted as a technology that will increase transparency and reduce corruption in various transactions. Recently, companies in the logistics and financial sectors have been exploring the use of blockchain for applications beyond cryptocurrencies.
“The solution is designed to help reduce fraud and errors, reduce time products spend in the transit and shipping process, improve inventory management and ultimately reduce waste and cost,” said IBM in a statement.
The blockchain supply management system will be accessible to a network of shippers, freight forwarders, ocean carriers, and customs authorities dealing with Maersk cargo. IBM says that each participant in the supply chain will be able to view the progress of goods in real time.
Once data is entered into the system, it will be virtually impossible to delete it without the consent of other members of the network— thus improving transparency.
IBM said that in the trial processes for the system, flowers were transported from Kenya to the Port of Rotterdam in the Netherlands.
Maersk becomes only the latest logistics firm to turn to blockchain for supply chain management. Companies in Sweden, Finland, Latvia and Estonia are using blockchain technology to track their fleets of trucks.
IBM has previously worked with Everledger, a company that tracks the origins of diamonds, to use blockchain technology in guarding against the entry of conflict diamonds into the market. In such a case, blockchain is used to maintain a virtually incorruptible and open trail of a gem’s provenance.
The Kenyan government has also expressed interest in working with IBM’s blockchain solutions. Last year the government revealed that trials were ongoing to use blockchain technology to manage data in the education and health sectors.
Other public sector applications of blockchain technology include Hondura and Sweden which are planning blockchain based land registries. The UK government has also been counseled by its chief scientists to take a lead role in developing blockchain applications.
But it is perhaps in financial services that blockchain continues to shine. Last year Barclays Bank conducted the first trade transaction using blockchain. The deal guaranteed the export of $100,000 worth of dairy products from Ireland to the Seychelles Trading Company.
R3, a consortium of 45 banks, is working on developing blockchain technologies with an eye on commercial applications.
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Source: Business Daily