Blockchain Needs Industry-level Support
By Carly Fields
BREAKBULK EUROPE COVERAGE – Described as the next step of digitalizing transport and logistics, blockchain is already making waves in the logistics industry. But for its full benefits to be realized project cargo and breakbulk companies need to dump silo thinking and work together on an industry level.
Frank Bolten, managing partner Chainstep, told an audience at Breakbulk Europe that blockchain does not make sense for one company. “Normally, it is better for a group of companies, and is most interesting for an industry.” Setting blockchain system standards across a whole industry benefits all and “really brings a lot of efficiency gains to everybody,” he said.
Moderating a panel on the digital ledger technology, Cyril Joseph Varghese, global logistics director – strategy and commercial at Fluor, saw blockchain as a potential differentiator for freight forwarders in the future, allowing them to eliminate the wastage and the inefficiencies of supply and value chains for engineering, procurement and construction companies.
With the problem of plenty of excellent freight forwarders vying for the same piece of cake, Varghese asked: “What is the differentiation that can be done to stand out amongst competition? How can we as EPCs and shippers be able to source better and smarter so that the landed cost remains low? How can you as freight forwarders and shipping lines increase your profitability so that you remain relevant in the industry and you continue to invest in activities which eventually we are going to use?”
Breakbulk Suited to Blockchain
The audience at Breakbulk Europe heard that the project cargo sector is well suited to blockchain technology. In tandem with the physical asset being transported from point A to Point B is a flow of information which is where blockchain comes in.
"If you start capturing this, that information remains as a single source of truth and grows in momentum as and when it migrates through the supply chain,” Varghese said. “There is huge potential in avoiding a lot of duplication, avoiding finger pointing, making sure that the provenance angle is taken care of and that everybody knows the history of every material traveling through the supply chain.”
One approach would be to isolate a pain point in the chain and build a blockchain solution around it, however that would demonstrate limited functionality of the blockchain potential. “We need solutions which are broad-based which can be customized and can be utilized for a larger variety of industrial applications to address multiple pain points,” Varghese concluded.
He referred to the “goldmine of data” that industry stakeholders are sitting on, urging companies to integrate technologies on to a blockchain platform, including smart contracts, to remove the trust element which is holding back the industry from doing business with multiple entities.
“Let’s see how we can use blockchain to breathe sense, agree as an industry that there is a use case, look at the use case and then figure out how we can move forward as an industry. Having access to a single point of truth has huge application for the supply chain,” he said.
Indeed, Varghese foresees a time when blockchain is insisted upon as a source of truth for EPCs which will allow it to gain traction.
However, he warned that blockchain is not the answer for everything. “We need to make sure that we differentiate on where blockchain can help us and where it would add value.”
Photo: Cyril Varghese speaks with panel members at a Breakbulk Europe session.