ASSESSMENTS

Can Blockchain Technology Bring Smooth Seas to Global Shipping?

Sep 14, 2018 | 09:00 GMT

A container ship is docked at the Mexican port of Lazaro Cardenas in Michoacan state on April 4, 2017.

A container ship is docked at the Mexican port of Lazaro Cardenas in Michoacan state on April 4, 2017. Distributed ledger technology has the potential to revolutionize global shipping.

(ENRIQUE CASTRO SANCHEZ/AFP/Getty Images)

Highlights

  • Distributed ledger technology has the potential to substantially increase the efficiency of the global shipping industry by lowering costs and shortening transit times.
  • First movers will compete to set standards and promote the widespread adoption of the technology needed to realize its full potential to change the industry.
  • Because of the size and overwhelming importance of the Chinese market to global trade, Beijing and Chinese companies developing blockchain platforms for the shipping industry will hold the upper hand over many of their Western counterparts.

There are a handful of technologies that, if widely adopted, have the potential to revolutionize how the world works. Distributed ledger technology is one such invention, and shipping is an industry that would obviously benefit from adopting blockchain and other distributed ledger technologies. Given shipping's struggles and its vulnerability to geopolitical risk, creating a transparent, distributed ledger that would remove middlemen and increase efficiencies could help the industry evolve and improve economically. To reap the benefits, however, the constraints of widespread adoption must be overcome. This challenge highlights a broader struggle to influence global standards across many emerging technologies, a struggle that often pits the United States (more broadly the West) against China. The use of blockchain in global shipping is no different....

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