Samsung SDS, the Information and Communication Technologies (ICT) arm of the Samsung Group is piloting a blockchain shipping containers solution with the banking giant ABN AMRO. They are conducting this pilot in the Rotterdam port in the Netherlands, which is the largest European port. They have partnered with the Port of Rotterdam Authority for this pilot.
The container shipping industry is massive, and it continues to grow. A Statista report states that it accounted for 60% of the global trade in 2017. Another Statista report projects the market to grow by 4.7% between 2016 and 2019.
All is not well, though. Inefficiencies plague the industry. ShippingWatch, the independent online media focusing on this industry quotes experts in a report. The experts believe the industry can improve its’ efficiency. The industry has much paperwork. Administration and tracking of containers happen in silos. Payment, physical transportation, etc. are also in silos. The ‘Bill of Lading’ (BoL) transfer can take up to 10 days. This process is also paperwork-intensive. Even for electronic documents, email with PDF attachments is often the mode of transfer.
The industry could use modern technologies to improve efficiency. The solution needs to make it easy to share documents. It needs to provide transparency. Transactions must be secure since the financial value is immense. These make blockchain a good candidate. However, large enterprises like shipping companies can’t use public blockchains. They need to use enterprise blockchains since they need data privacy.
The blockchain technology is still new. There are enterprise blockchains. However, they use different technology stacks. Enterprise blockchains need to address the interoperability. The container shipping industry always involves multiple stakeholders; interoperability is critical. The Samsung SDS/ABN AMRO pilot project assumes significance in this context.
Samsung SDS already has significant expertise in the blockchain technology. They already have a working enterprise blockchain called Nexledger. The company claims that Nexledger is fit for finance and other industries. The platform also boasts of high security.
ABN AMRO, one of the largest European banks also has significant experience with enterprise blockchain. They already operate R3‘s enterprise blockchain platform, Corda. Corda has important features suitable for the banking industry. The platform also went through a recent upgrade of its’ security features. The two companies have the right expertise to build a blockchain shipping containers solution.
Samsung SDS and ABN AMRO are bringing these two blockchain platforms together. They are using an overarching ‘Notary’ to connect the two separate blockchains. The pilot project is tracking the shipment of a container that originated in Korea. The destination is the Netherlands. Involvement of multiple stakeholders meant different blockchains hence the requirement of a separate connection.
Kim Hyung-tae, the VP of the Samsung SDS logistics division is upbeat about the project. The company quotes him in a report to state that the project will improve the logistics business competitiveness. Daphne de Kluis, the commercial banking chief in ABN AMRO states that the project will integrate the various workflows in this pilot. The two companies will conduct the pilot in January 2019 with the Port of Rotterdam Authority.
Blockchain shipping containers solutions are emerging as a key use case of this technology. IBM has partnered with Maersk to operationalize a blockchain shipping containers solution. The technology is increasingly curving its’ niche in the overall logistics industry. Fr8 and Openport are examples of blockchain logistics providers.