Can Blockchain Revolutionise International Trade?
Imagine a logistics business that transports goods around the world, primarily with cargo ships. Currently, that business needs to coordinate with both port authorities at departure and destination, customs agents, land transportation providers, governments and other ocean carriers. Processing documentation for one shipping container is estimated to cost around twice the actual transportation cost. It is a web of entities with little transparency, and a lot of bleed in inefficiencies, due to the complexities and the point-to-point nature of communications.
Now imagine that this company used a permissioned blockchain; an immutable, incorruptible, transparent ledger to administer all of their documentation and information on the status of goods. This ledger would be accessible by all entities involved in the transportation of goods.
“Imagine a logistics business that transports goods around the world, primarily with cargo ships”
Concurrently, the status of the shipment is being updated: empty container picked up, empty container arrived at warehouse, container loaded, full container arrives at port, full container loaded onto ship. At each event, the container’s status is updated and because it is fitted with an internet of things (IoT) smart device, it’s location is logged, and the event timestamped for veracity. Beyond the benefits of added transparency and efficiency gains, an artificial intelligence layer is examining all the data to find any correlations or aberrations that may be useful for management to know.
“At each event, the container’s status is updated and because it is fitted with an internet of things (IoT) smart device”
This fanciful example of blockchain, Ethereum smart contracts, IoT and artificial intelligence is in fact not fanciful at all. This is a real-life example of a project by IBM and Maersk and is a reality today.
If you are a small business then this solution is probably not within your budget, but that doesn’t mean that these technologies do not apply to you. As with all technologies, they diffuse through society (and specifically the business sector) following Rogers’ diffusion of innovation curve. As they do, the technologies tend to get cheaper and more accessible.
“If you are a small business then this solution is probably not within your budget, but that doesn’t mean that these technologies do not apply to you.”
Think about cloud computing, at first this was only available to larger businesses but as time passed it became cheaper and easier to adopt. The same thing will happen with artificial intelligence, blockchain technology and the internet of things. In fact, some cloud software providers already have services to enable businesses to set up these technologies with a fraction of the effort that was required even two years ago. Accountants now have the ability to count almost everything, so the question becomes: what will your accountant count for you?
Written By: Patrick De Ruvo
Chief Technology Officer