Rebecca Moore believes a new blockchain consortium will help stamp out the problem of misdeclared cargo
Rebecca Moore believes a new blockchain consortium will help stamp out the problem of misdeclared cargo
There might now be a solution to the problem of misdeclared cargo.
Solving this issue is ever-more urgent as two major container ship fires have already taken place this year.
In January, a fire started in a container on Hapag-Lloyd’s Yantian Express, while another broke out in a cargo hold on APL Vancouver. This follows an incident in March 2018, when fire broke out in a cargo hold on board Maersk Honam, leading to the deaths of five crew members.
While investigations are continuing into the recent fires, misdeclared hazardous cargo is a major cause of container ship fires.
This is where blockchain steps in. Maritime Blockchain Labs (MBL), founded by blockchain technology experts BLOC and Lloyd’s Register Foundation (LRF), has established a consortium to explore using blockchain to tackle the risks associated with declaring and handling dangerous goods.
The MBL consortium will build and test a prototype to assess the potential for distributed ledger technology to address the challenges faced by stakeholders throughout the supply chain. Funded by LRF and conducted in partnership with Rainmaking, the consortium includes Copenhagen Malmö Ports, Flexport, X-Press Feeders, SecureSystem, DSV, Port+, Agility and MTI.
Tracking and monitoring containers is extremely complex. It requires huge amounts of data interoperability and information sharing, which blockchain can offer. The other crucial aspect is that all stakeholders need to be brought together to ensure containers can be monitored from end to end. This consortium is starting on the right track by bringing different groups together. And I would like to see more container ship operators and ports involved in this initiative.
There are many problems that stand in the way of resolving the issue of misdeclared cargo.
BLOC chief executive and founder Deanna MacDonald sums it up when she says “Shipping containers often carry little to no indication of their specific contents. At best, a product code is scanned, traced, and managed by siloed data systems, which rarely interoperate with data systems managed by other stakeholders along the connected value chain.”
Add to the mix a lack of transparency and weak enforcement and there are large hurdles to overcome. Indeed, currently legislation dictates that national governments are responsible for conducting inspections and reporting findings to IMO. But this is not working well. According to TT Club, just six governments are believed to be providing reports to IMO on inspection findings.
This consortium will help overcome these hurdles by using blockchain and distributed ledger technology to provide more visibility of the activities in the supply chain. Transparency and accountability in tracking dangerous goods will help cut incidents.
MSC, Maersk, Hapag-Lloyd and Ocean Network Express have established the Digital Container Shipping Association to drive “standardisation, digitalisation and interoperability in container shipping”.
This will help the consortium use blockchain by providing common IT standards across the industry for digitalisation and help prevent initiatives, including this one, from being insular.
According to the Cargo Incident Notification System, nearly 25% of all serious incidents on board container ships were attributed to misdeclared cargo. This stark statistic highlights the urgent need to prevent this happening, and the new consortium will help to solve this.
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