First Blockchain-Managed Container Shipped to the Netherlands
In a first for the Port of Rotterdam, a paperless, instantly financed and fully door-to-door tracked container has been shipped from South Korea to Tilburg in the Netherlands. The Proof of Concept shipment provided end-to-end visibility for multi-modal cargo transport via ocean carrier, truck and inland barge.
The shipment was handled on the blockchain platform DELIVER, and it reached the warehouse of Samsung SDS in Tilburg via Port of Rotterdam with Barge Terminal Tilburg hauling the container from the port to the warehouse in Tilburg.
With the Proof of Concept phase complete, partners ABN AMRO, Port of Rotterdam and Samsung SDS have signed an extended collaboration agreement for the next phase of the DELIVER project. The goal of this new phase is to conduct pilot projects with multiple shippers from various industries operating in different trade lanes.
The ultimate objective is an open, independent and global cargo shipping platform.
“Currently payments, administration and the physical transportation of containers still take place entirely via separate circuits,” says Paul Smits, CFO at the Port of Rotterdam Authority. “This results in inefficiency, as many parties are involved and everything is organized via paper documentation. For instance, an average 28 parties are involved in container transport from China to Rotterdam.”
Rotterdam's Blockchain Potential
Leading the port's blockchain applications is BlockLab, established by the Port of Rotterdam Authority and the Municipality of Rotterdam.
There are two key networks in the Port of Rotterdam in which a decentralized element plays an important role. One is the traditional centrally-controlled electrical grid, supplied by a few dominant power suppliers with coal-powered plants. This is changing now that the energy transition is slowly beginning to take shape. In and around the port there are now numerous wind turbines and solar panels supplying power to the electrical grid. This is resulting in an increasingly decentralized grid.
Such a decentralized electrical grid faces a number of significant challenges. The supply of sustainable energy sources is, for example, extremely irregular. This demands a smart network that continuously aligns supply with demand. “Blockchain is the technology that can facilitate such a smart, decentralized gird and help achieve the promise of the energy transition. The focus on blockchain is an offensive strategy, geared towards increasing the share of sustainable energy,” says Janjoost Jullens, BlockLab energy lead.
The second key network at the port is the decentralized logistics network in which the majority of positions are occupied by small and medium enterprises. For instance, an average 28 parties are involved in transporting sea containers, and they have to exchange data a total of some 200 times to ensure that a container reaches its intended destination.
Blockchain can significantly improve the efficiency of this process. “In this network, deploying blockchain is much more of a defensive strategy, focusing on retaining market share,” says Aljosja Beije, logistics lead at BlockLab. “Platforms such as Amazon and Alibaba are also emerging strongly in logistics. You could see these as the equivalent of coal-fired power plants: efficiency is created through centralization. For existing parties in decentralized networks, cooperation is the only option they have to improve their efficiency.”
Beyond the hype
Blockchain is suitable for coordinating processes in decentralized networks of companies and institutions. In a network without central leadership, trust is often lacking. Trust is needed for the large-scale data sharing that simplifies and accelerates processes. Blockchain provides that trust, partly because all relevant data is recorded in a secure way on a huge number of computers. Manipulating or deleting data is virtually impossible.
At some point it seemed that blockchain would be the solution to every problem, but there has been an increasing skepticism in recent years. Anecdotally, it has proven to be difficult for all parties in a network to hook up to a blockchain. If this could be achieved this would, according to skeptics, create an application that could just as easily have been built using existing technologies.
Beije understands this skepticism. “The hype revolved more around bitcoin and other crypto currencies. These were fantastic experiments, and we learned so much from these. We also saw many unsuccessful ‘proof of concepts’ at government agencies, but it is difficult to implement a decentralized solution in an organization that, by definition, is organized centrally. And yes, many solutions are, in principle, also possible without blockchain. But where do the solutions lie? Blockchain is certainly not the solution to everything, but it can tackle the problem of trust that stands in the way of solutions.”
According to Beije, there is currently a lot of discussion about the interoperability of various blockchains. The developments in recent years have mainly made clear that in the future, various blockchains will exist next to each other. “That doesn’t need to be a problem, but those blockchains will need to be able to communicate with each other. That is a theme that takes up a lot of our time.”