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TECHNOLOGY | DIGITAL SHIPPING In association with UK P&I Club
The dawn of
digital shipping
Exciting new technologies such as smart contracts and autonomous vessels will have a transformative effect on the maritime sector and offer huge potential benefits and efficiencies. But, these revolutionary advances need to be manged carefully and the continued critical role of humans in the process must not be forgotten argues Andrew Taylor, Chief Executive Officer at UK P&I Club. Nearly every industry across the globe has witnessed or is undergoing a digital revolution of one form or another, and the shipping sector is no different. As technological advancement infiltrates further into wider society and our everyday life, exponentially increasing connectivity, it brings with it an inherent pressure to embrace a more digitised environment. From blockchain to cyber security to autonomous vehicles and enhanced customer experience, there is much to ponder for the shipping industry. The Marine Insurer | March 2020
The industry faces new opportunities, and to some extent threats from the rise of digital, data, analytics, and automation. In a sector so focused on physical assets and rooted in traditional methods, change can be slow. However, the digital era presents potentially disrupting business models and new value streams. Customer expectations of the global maritime sector are being radically reshaped by e-commerce and innovation in logistics. With outside innovation being gradually adopted, the industry is in a state of flux.
BUILDING THE BLOCKCHAIN Blockchain is the new buzzword in the shipping industry and, as such, is increasingly difficult to avoid. Put simply, blockchain has the capacity to transform and fully digitise contracts within the shipping sector. It is essentially an online communication protocol, which allows interdependent users to participate in a transaction. All parties to the transaction have access to the same information and no one party can attempt to amend or vary the transaction unilaterally without acquiring the permission of the others. Blockchain is extremely secure. It is virtually impossible for transactions to be manipulated by an external party as the whole process is guarded by sophisticated cryptography, with exact copies of the transaction’s ledger distributed among the participants. Its industry-wide adoption would have a tangibly positive effect on instances of fraud and corruption, for example eliminating demands for ‘grease payments’. Blockchain can be used to convert shipping contacts and agreements, such as sales contracts and bills of lading, into self-executable computer software. As the technology progresses, the prospects are that natural
