Blockchain and the Shipping Industry

 

Over the course of the previous century, major advancements in technology have completely revolutionize commerce on global level. Almost every sector of industry has been affected by these changes, however, this has been especially true for the shipping industry, which has seen entire ports automate with the use of robotics, as well as allowing companies to built bigger ships that are able to transport goods from one side of the world to the other faster than ever before.

Still, although things are changing at a rapid pace, almost every company operating in the shipping industry still relies on traditional paper documents for their administrative purposes.

Now, two global giants, IBM and A.P. Moller–Maersk are looking to collaborate and bring a revolutionary change to the shipping industry. That’s right. The two companies are looking to implement blockchain solutions into the industry with the end goal of optimizing the fluidity of transactions between companies.

A massive undertaking, to say the least. However, if they are successful in their endeavor, this could completely change the maritime industry, as well as significantly reducing the high cost of administration faced by most shipping companies.

 

The High Cost of Using Paper Documents

According to a representative for Maersk, Vincent Clerc. Sending a single refrigerated shipment from Europe to East Africa involves over 200 communications and will typically pass through the hands of about 30 different shipping organizations before reaching its destination. And of course, this massive amount of coordination comes with an extremely high cost.

In fact, due to the amount of paper communications involved, the administration and documentation costs can represent up to 1/5 of the total cost of shipping a single container.

However, by implementing blockchain technology, companies would be able to streamline this chain of communication and make all their documentation available through a distributed registry. In turn, this would also increase the speed of the shipping process and it’s estimated that it could save the industry several billion dollars per year.

 

The Blockchain Solution

The blockchain is designed to be a secured distributed registry where all stakeholders have access to the same information.

Aside from being applicable to the maritime industry, blockchain technology could also be adapted to be used in other sectors. By using this type of technology, companies would easily be able to speed up their documentation process and reduce the amount of data entry needed by up to 80%.

Also, applying a blockchain solution could simplify custom checks and data exchanges while a container is on route, which would considerable reduce the risk of fines while shipping across international borders.

For their project to be a success, IBM and Maersk must first convince all those who would be involved that it is a viable solution. This includes customs officials, port authorities, as well as the shipping companies and a unanimous decision must first be made for the implementation to work.

How Bitcoin Can Help You Take Control of Your Wealth

Behind the development of cryptocurrencies was the fact that people wanted to have more control over their hard-earned money. As it stands, the current situation couldn’t be any worse. And, governments and financial institutions are able use taxpayer money however they feel necessary and in the event of economic collapse, they can use this money to bail them out from their problems. Furthermore, this is exactly what happened during the US recession back in 2008, when the financial sector had to be bailed out by the Bush administration.

 

Government Bail Outs

By the end of 2007, most US banks were on the verge of filing bankruptcy. To resolve the situation, the Bush administration bailed them out by handing out money and loans that came directly from the pockets of taxpayers.

Nearly $800 billion US dollars were handed over to these financial institutions and a staggering $2.2 trillion dollar were passed out in the form of government loans. This situation combined with other economic factors were the inciting force behind protests such as the Occupy Wall Street movement.

And, this has not just been the case in the US. In the past, governments have always bailed out financial institutions that have been on the verge of bankruptcy. While this would be a good thing if the recipients of the bail-outs were companies that belong to the manufacturing industry, however, when a financial institution is bailed out, it’s almost always to protect and save people who already have deeper pockets than most of the population.

 

Bad Financial Habits

Many economic experts believe that these types of bail-outs are setting an affair precedent for financial institutions as it encourages them to take bigger risks to increase their profitability, while putting massive amounts of public capital in peril. This is true because most banks and financial institutions are connected in some ways to governments and they know that in the event of a loss, the money could simply be recovered from taxpayer money.

With problems such as these running rampant in our economic world, it’s no wonder that people are looking to alternatives to take control over their own wealth. However, it’s very difficult to stop big banks and governments from playing with taxpayer money.

 

The Ultimate Solution

One of the only solution to this economic problem is to create a completely independent financial system, where individual have complete control over their own money. Bitcoin and blockchain technology represents this exact solution since blockchain networks are completely decentralized from governments and banks, which allow you to make the decisions over how you spend your hard-earned cash.