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Blockchain consortium to tackle mis-declaration of dangerous goods

Maritime Blockchain Labs (MBL), founded by blockchain technology and governance experts BLOC and the Lloyd’s Register Foundation (LRF), has announced the establishment of a consortium to explore the use of blockchain in tackling the significant risks and challenges associated with the declaration and handling of dangerous goods.

{mprestriction ids="1,2"}According to the Cargo Incident Notification System (CINS), nearly 25 per cent of all serious incidents onboard containerships were attributable to mis-declared cargo. The consortium will explore the use of digital tools for traceability of dangerous goods cargo, and immutable attestations and digital audit trails for due diligence with a view to generating more transparency and accountability in tracking dangerous goods; ultimately, reducing incidents.

The MBL consortium will build and test a prototype to assess the potential for distributed ledger technology (DLT) 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 (CMP), Flexport, X-Press Feeders, SecureSystem, DSV, Port+, Agility and MTI. It represents stakeholders throughout the value chain, from ports, to carriers, to technology and service providers.

“The global economy is a highly interconnected machine, and with container ships transporting more than 90 per cent of non-bulk cargo worldwide, this machine only operates efficiently when the shipping and logistics components operate efficiently. However, continuously tracking and monitoring the contents of seafaring containers is a supremely complex task that demands cooperation amongst stakeholders and a high level of data interoperability and information sharing. Blockchain has a huge amount of potential when it comes to tackling this – but we need to bring together stakeholders from across the value chain to ensure that whatever solution we build works for everyone involved. This is what this consortium is here to do,” said Deanna MacDonald, CEO and founder of BLOC.

“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. This is compounded by weak enforcement, documentation complexity, lack of transparency around original and content of containers. It’s great to be part of a consortium that’s bringing such a wide range of expertise to bear on this problem.”

Nicklas Viby Fursund, partner at Rainmaking, explained: “Mis-declaration of dangerous cargo ultimately leads to disastrous incidents that cost lives, millions of dollars in losses, ship damage and delays in cargo supply chains. From our experience working with both start-ups and large corporate clients on industry challenges, we recognise the consortium approach as a great model for collaboration and look forward to co-create a solution to a complex problem together with the consortium partners.

Professor Richard Clegg, chief executive, Lloyd’s Register Foundation, stated: “Given the safety challenges faced in the transportation of dangerous goods, and the potential of blockchain and distributed ledger technology to support in addressing them by for example providing more visibility of the activities in such networks, this is a natural opportunity area for MBL to explore, and we are proud to be supporting this consortium. Through MBL’s work, we look forward to learning more about how blockchain and other technologies can combine with governance to address issues in the supply chain and ultimately reduce the risks involved in the transport of dangerous goods.”

According to MBL, while the exact breakdown of cargo contents varies by container, it’s well known that at any given time, between 5-10 per cent of an average container ship's cargo is declared as hazardous goods and approximately 12 per cent of global container trade comprises dangerous goods. However, it’s nearly impossible to know how much dangerous cargo is undeclared, or mis-declared.

The demonstrator project will run until September 2019.

Article updated June 26, 2019.


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