System
Blockchain on the High Seas and the Future of Trillion Dollar Shipping
The prize is a revolution[1] in world trade on a scale not seen since the move to standard containers in the 1960s. But the undertaking is as big as the potential upheaval it will cause. To make it work, dozens of shipping lines and thousands of related businesses around the world will have to work out a protocol that can integrate all the new systems onto one vast platform.
According to the World Economic Forum, improving communications and border administration using blockchain could generate an additional £1trn in global trade. Matt Levine In early May of 2018, the CEO of FedEx referred to blockchain as the “next frontier” for global supply chains.
To ensure its competitive advantage and reputation, as well as live up to its famous slogan “When it Absolutely, Positively has to be there overnight”, FedEx created a sophisticated IT infrastructure and distribution network that ensured timely delivery across the world and minimised lost or damaged packages. These days, other competitors have entered the express courier trade, such as UPS and DHL, which are competing directly with FedEx. To safeguard their competitive advantage, each courier company created their own sophisticated distribution network and IT platform only available to cargo brokers, freight agents and distribution centres strategically located across the world.
The same applies to shipping and maritime trade. Each shipping giant, or shipping line alliance, has created their own ,,silos” of freight and payments transaction data that is only accessible to anyone with permission to access those silos and private data networks. Regretfully, the same is happening now with the advent of public blockchain and private/permissioned DLT such as the recent collaboration between Maersk and IBM.
Both will, in all likelihood, only allow competitors to access their permissioned DLT networks if there is something to be gained. Open public blockchain will be the only way forward for the entire shipping and logistics world just as the GSM (Global System for Mobile communications) made mobile phone calling possible in 212 countries (and territories), serving more than 5bn people, comprising more than 80% of the mobile market across the globe. Reducing or even eliminating the paper trail in global trade would result in massive savings and lowered costs as well as shortened transport times between manufacturer and consumer, by avoiding costly time delays at borders, ports and terminals.
Blockchain startups like BitNautic are taking this concept even further into other areas of the shipping and maritime industry such as logistics, e-commerce, ships supply, ship broking and cargo consolidation.
Cargo Commoditisation
The biggest change came in the 1960s, when the industry adopted the standard-size steel boxes in use today, replacing the wooden crates, chests and sacks that stevedores had hauled on the docks for centuries. The advent of global trade using box containers with standard sizes has been a game-changer in the shipping and logistics industry. It shortened transport times, reduced costs and increased efficiency all across the supply chain, as goods could be packed into containers at the factory or warehouse, and unpacked the same way at the receiving end thus avoid manual handling of loading and unloading goods or bulk cargo on board ships.
Blockchain will bring about the same revolution as containerisation, this time at the administrative level. All concerned parties to a trade will be able to exchange information and documents on blockchain networks, at a fraction of the time and cost when compared to current systems. “Blockchain in Transport Alliance” has been established with the aim to set standards for the application of blockchain in the maritime and shipping industry.
Many key players and major companies in shipping and logistics have joined, with the goal to explore and implement blockchain in supply-chain and cargo transport. Shipping and cargo standardisation is key for global trade efficiency since goods travel through customs, brokers, intermediaries, buyers and sellers. Shipping containers – some even fitted with tracking devices – are already being accounted for on permissioned DLT protocols, because it is relatively simple to account for a small box in a standard size (mostly TEU 40ft), that can be transported by train, truck or ship, and stored in a factory, warehouse or shipping container terminal.
Bulk cargoes are not necessarily difficult to track with the prevailing legacy systems, document exchanges and satellite tracking, however, the quantities transported can be tampered with, and this is one of the biggest scourges in bulk cargo transport and maritime transportation in general. It concerns ships departing loading ports with full cargo and arriving at the destination with missing or damaged cargo. Blockchain will not be able to resolve such issues as piracy, but it can ameliorate cargo traceability.
It will even improve the dynamics of global trade supply and demand, as “goods on-the-road” will be accounted for in an up-to-date and transparent way by removing the element of unaccounted cargo.
Blockchain and the commoditisation of cargo transportation should be a game-changer in global trade, as well as in shipping, maritime and the entire supply-chain world of logistics.
References
- ^ The prize is a revolution (www.bloomberg.com)
Alaska Air Cargo reports 40% growth in North American service
Alaska Air Cargo has expanded its cargo lift capacity by 40 percent in the continental U.S. by utilizing the 71 Airbus aircraft that became part of the Alaska Airlines fleet as part of its merger with Virgin America, the company said. Alaska Air Cargo said it will utilize the belly space in these aircraft to provide customers with new shipping destinations and increased frequencies throughout the Alaska Airlines system. Alaska Air Cargo serves 93 destinations offering customers reliable cargo services and the competitive advantage of Alaska Airlines broad and enhanced flight network.
In addition to increased belly load capacity, Alaska Air Cargo has upgraded its fleet to include three 737-700 retrofitted freighter aircraft. With the addition of a dedicated all-freighter fleet, Alaska Air Cargo provides reliable scheduled and drop-in service for 19 communities across Alaska; connecting them to the cargo hub in Seattle. Alaska Air Cargo transports more than 170 million pounds of cargo annually-including seafood, mail and freight, and operates the most extensive air cargo operation on the U.S.
West Coast of any passenger airline.
Alaska Airlines and its regional partners fly 44 million guests a year to more than 115 destinations with an average of 1,200 daily flights across the United States and to Mexico, Canada and Costa Rica.
BY Gulli Arnason – June 21, 2018
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References
- ^ Air and Travel (www.financial-news.co.uk)
Auckland Transport chairman says zero road deaths achievable, hints at slashed speed limits
CHRIS SKELTON/STUFF
£110 million will be spent on emerging technology to help solve congestion in Auckland if AT approves its 10 year transport plan. Auckland Transport’s chairman believes the region can achieve zero road deaths and injuries and has hinted at his board’s desire to see sweeping speed limit reductions. Dr Lester Levy made the comments after he and the AT board signed off on a multibillion-dollar regional transport plan on Wednesday, four months after it rejected an earlier strategy.
The 10-year, £28 billion Regional Land Transport Plan (RLTP) features a spend of nearly £110 million on “emerging technology” to help ease Auckland congestion. It also contains wins for the region’s bus network, cycleways and road safety. Levy said the AT board wanted to see extended lower speed zones through the region’s town centres, outside schools not in low-speed zones already and along unsafe rural roads.
READ MORE:
* Budget 2018: ‘No surprises’ for transport in Auckland
* Auckland Council, Government commit £28b towards Auckland transportation infrastructure
* Auckland Council, Government to announce 10-year funding plan for Auckland transport[1][2][3] “It’s not that straight forward,” Levy said.
MICHAEL BRADLEY/STUFF
Auckland Transport chairman Dr Lester Levy says active transport is part of the solution to the city’s commuting problems. “We don’t necessarily have the power to just reduce speeds.
There are some issues around what we have permission ourselves to do. “You cannot change speeds without some process of consultation, so we just want to try find a way that we can work with these agencies in order to get the process done quickly.” Chief executive Shane Ellison said AT needed to work with New Zealand Transport Agency and the Ministry of Transport “to make the changes we need to”.
Levy said the aim of having zero injuries and deaths on Auckland’s roads may be achievable.
“One day no-one will get killed on our roads,” he said. “If you look what’s happened in some of the cities in Sweden with Vision Zero[5] it may ultimately be achievable. “But if you aim for something that’s different to that, why would you?
So we want to actually get down to the fact that nobody gets hurt and killed on our roads. “It could take a very long time, but if you have a look at what they’ve done with Vision Zero, it is actually quite feasible.” Vision Zero was passed by the Swedish parliament in 1997.
The programme aimed to achieve a transport system with no fatalities or serious injuries. Today, the number of traffic deaths there is half that of New Zealand. PLAN GIVEN GREEN LIGHT
Wednesday’s RLTP signing comes after AT back-pedalled on the controversial plan earlier this year. The AT board ordered a re-write to better reflect the priorities of the AT, Auckland Council and the Government. The new plan included an unprecedented contribution of £16.3b from the Crown’s National Land Transport Fund.
The top-up is “significantly higher” than what has been provided for Auckland in the past, according to the plan. Levy said the plan aligned with the aims of Auckland Council, the AT board and the New Zealand Transport Agency (NZTA) – something the previous plan failed to do. It also gave “certainty that we don’t always have” and placed an emphasis on road safety.
The new plan proposes spending nearly £110m on an intelligent transport system, which would “take advantage of emerging technologies to manage congestion, improve safety and influence travel demand”. A rural road safety programme, to address the highest risk rural roads and intersections, would get nearly £122m. The city’s bus users would also be big winners – more than £316m has been earmarked for a Pakuranga bus station and Reeves Rd flyover as part of the new Eastern Busway.
Just over £153m has also been set aside to finish the city’s current cycleway programme. Responding to an earlier deputation, Levy said the organisation believed active transport remained a “massive part of the ultimate solution” to the city’s commuting problems. The capital programme shows a number of expensive projects remain unfunded for now.
About £396m-worth of additional initiatives from the Auckland Cycling Programme business case targeted towards South Auckland are on the back burner. The city’s ferry network also appears to be a big loser. A £20.9m ferry terminal at Browns Bay sits unfunded, as does £16m and £17m terminals at Pine Harbour and West Harbour respectively.
“We do see a potential for ferries, there’s no doubt about that, but that might be another area that if we had more money definitely we would be able to do more,” Levy said.
Enhanced park and ride programmes, worth £115m, have also been put on the scrap heap for now.
– Stuff
References
- ^ Budget 2018: ‘No surprises’ for transport in Auckland (www.stuff.co.nz)
- ^ Auckland Council, Government commit £28b towards Auckland transportation infrastructure (www.stuff.co.nz)
- ^ Auckland Council, Government to announce 10-year funding plan for Auckland transport (www.stuff.co.nz)
- ^ Ad Feedback (stuff.co.nz)
- ^ in Sweden with Vision Zero (www.stuff.co.nz)