Last week in Wanchai, Hong Kong, blockchain advisory firm Chain of Things held its first Chain of Shipping conference. Designed to give professionals from the shipping industry and blockchain developers a view into the needs and possibilities that they respectively held, the day was a busy event with plethora of information provided from both sides – blockchain developers and members of the shipping industry.
To open the proceedings, Jehan Chu, blockchain advocate and Partner of Jen Advisors, gave an insight into what exactly blockchain was, how it is used, and how it could be applied to the shipping industry. Covering the details that made blockchain different to other technologies, such as its decentralised nature, immutability and interoperability, Chu gave his view on why this technology is so vital for many applications.
Following this, a panel of legal experts from the shipping world: Chris Howse, Partner at Howse Williams Bowers; Catherine Smith, Senior Associate at Holman Fenwick Willan; and Jon Zinke, Resident Partner at Kessal, Young & Logan, spoke to the audience about some of the risks associated in shipping, including some first-hand horror stories, and asked how blockchain might address these issues. The focus of this discussion, and indeed a recurring theme of the day, was bills of lading – a form of receipt of cargo passed between the master of the ship and the person consigning goods. It was agreed that the arrival of blockchain technology had presented the opportunity to solve issues that had plagued bills of lading for years such as fraud and inefficiency.
Paul Mallon, Co-founder and Head of Customer Engagement and Legal at Bolero International proceeded to discuss what had already been done with digitising bills of lading and the work that Bolero had done. Mallon drew parallels between the current blockchain scene the birth of the internet and warned that having a product idea does not make it a good idea; that there were many more aspects to consider, like legal issues and risk. He picked out a number of challenges that needed to be assessed, including return on investment building effective communities, before solutions could be fully realised.
The next issue to be addressed was the huge threat of cybercrime. With a presentation titled ‘Cybersecurity in Shipping’, Marin Ivezic, Cybersecurity Partner at PwC, expounded on the significant rise in rate of cybercrime – a market worth over an estimated $450 billion, and the particular threat it poses in Asia. Showcasing the various ways that it can affect the shipping industry, Ivezic stated that the biggest threat to innovation was the issue of cybercrime. This might be one issue blockchain is poised to deal with.
Rounding off the mornings speakers was George Samman, blockchain consultant and former CMO of Fuzo. Focussing on private shared ledgers and the powers of consortia, Samman covered the benefits that blockchain technology provides terms of privacy and opening up governance models, removing intermediaries and connecting and empowering users. Samman also touched on the use of blockchain to secure supply chains and the Internet of Things.
Starting off the afternoon presentations, Matthew Warner, Journalist for Chain-Finance and Allcoinsnews, gave attendees an overview of blockchain start-ups in the shipping industry. Warner summarised a number of different start-ups, ranging from those providing updates for bills of lading and supply chain management to those aiming to ensure cargo provenance and integrity. Highlighting the issues the companies were tackling, Warner noted the differences in approach, before concluding that blockchain could, and indeed had already begun to, renovate antiquated systems in the shipping industry.
Leading on from this, Julian Smith, CEO and Founder of Blockfreight – the blockchain of global freight – spoke on what his MELBOURNE-based start-up was aiming to achieve for shipping. With the potential to reduce costs, eliminate fraud and streamline compliance, Smith spoke of Blockfreights work to develop integration points, SaaS software and APIs for the network to unlock and secure new revenue opportunities. Looking to revolutionise global trade settlements, Smith noted the importance of collaboration and invited queries and contact to that end.
A video from Adam Vaziri next highlighted again the issue with bills of lading in the shipping industry. With a thorough overview of the legal problems presented using current paper bills of lading, alongside the general lack of efficiency in the system. Vaziri noted the specific points in favour of blockchain technology and smart contracts in solving problems not only for bills of lading but industry issues in general, urging shipping companies to be proactive in taking advantage of the technology and its intersection with Internet of Things.
Up next was a showcase of ‘Maru’ by Adam Mashrique, a Developer for Chain of Things. Maru is a sensor device under development by Chain of Things which serves as an integrated blockchain and Internet of Things green, grey and brownfield Hardware as a Service solution for the Internet of Things issues with identity, security and interoperability. The device allows for the monitoring and verifying of data associated with cargo shipments, providing a new level of trust and proof when transporting goods. Mashrique was then joined by Co-Founders and Developers of Chain of Things, Conor Colwell and Doug Irwin on a panel to answer questions about the device and its potential uses.
Finishing off the day, Dr Hans Lombardo, Co-Founder of Chain of Things, looked at the next steps for blockchain in the shipping industry. With possible applications for smart bills of lading, trade finance, cargo tracking and provenance, ship registry and reputation and system automation amongst others, Lombardo hypothesised a potential Chain of Shipping Consortium. With members collaborating from areas including P&I clubs, banks, shipping companies and hardware & software solutions providers, Lombardo stated that a consortium model and broad market participation were key to unlocking the full potential for a blockchain revolution in the shipping industry. Summarising some of the key points from the day, Lombardo put forward Chain of Things as a contact for anyone wishing to explore opportunities and developments in this area.