Blockchain

The future

is Blockchain

Blockchain is revolutionizing the sale and movement of international cargo. In countries which have traditionally suffered from a lack of transparency, such as Mozambique, the positive impact it can yield on this industry can be even greater. The introduction of the Single Electronic Window, nearly a decade ago, shows how technology has the potential to level the playing field for smaller ports like Maputo. Blockchain promises to be no different.

Despite vast improvements in Mozambique’s shipping and international trade processes over the past decade - among them, the introduction of the SEW - some niggling issues still persist. These include issues around miscommunication (despite being a nominally Portuguese-speaking country, most Mozambicans speak Buntu), information being passed and repackaged incorrectly, and subsequent delays caused by all of this incorrect information.

Blockchain technology ensures that the information contained in shipping documents is free from human error. With Blockchain, all of the stored records are tamper-free and from a verifiable source (usually the producer or the distributor). Because the data are tamperfree, there’s less room for human error and/ or dishonesty. For countries like Mozambique, this greatly reduces the credibility gap which existed in the past.

Blockchain also allows participants in the supply chain to view the progress of goods as they make their way through customs and the status of individual customs documents. This also has implications for the resonance of products. Now, when you order a product from Supplier A, thanks to Blockchain, you can be assured that the product you receive is that which was sent from Supplier A, and not somebody else in the supply chain. This wasn’t always possible.

The end result of all of this is speed. Faster throughput decreases the pressure on logistics and reduces the cost for traders

“For Mozambique, Blockchain has the potential to create a whole new paradigm”

- extra time in warehousing brings extra daily costs. Although the cost varies from company to company, in May 2020, Maersk and IBM created a digitized supply chain pilot using blockchain technology, which they estimated could reduce the average cost of transporting a shipping container by up to $300 (or 15% of the total cost).

The implications of Blockchain aren’t just for shipping, however. The aforementioned benefits can just as easily apply to rail, road and air freight. For example, in air freight, the estimated 800 million unit load devices (ULDs) used to carry cargo on aircraft across the world are only partly digitized. Enter Blockchain: by removing the paperwork at either end of the cargo’s journey, up to two weeks could be taken off the delivery time.

For Mozambique, Blockchain has the potential to create a whole new paradigm. It means that as soon as the logistics infrastructure is in place - and as this document has shown, this is slowly becoming a reality - e-commerce could become a reality. Growing consumer demand could add an extra layer to the country’s economy. In Mozambique, it’s not just logistics providers that are betting on the future of Blockchain.

32https://www.supplychaindigital.com/technology/maersk-andibm-are-bringing-blockchain-tech-shipping-industry