On the wires: Can electronic bills of lading transform global trade?
…eBL is complex, hot property.
“Blockchain is a ‘we’ technology, not a ‘me’ technology,” Michael Casey, senior advisor to the Digital Currency Initiative, told MIT Management Sloan School’s 2019 Business of Blockchain conference this week.
“The reason it’s taking such a long time is not necessarily a technical problem,” he explained. “It is a cultural and structural challenge getting different non-trusting parties to work together.”
The conference assessed that blockchain’s best application at the moment is in the supply chain.
MIT explained: “As a shared digital ledger that creates an immutable record of transactions, blockchain is ideal for tracking the provenance of goods. It enables trustworthy shared information among suppliers that may not trust each other.”
Mr Casey added that it enabled a group of independent entities, with their own interests and information to protect, to share a common platform that holds information of common interest.
Blockchain in the supply chain is making some inroads: last month CargoX, a public blockchain document transaction platform, was integrated into RoadLaunch – a private blockchain digital freight management platform.
RoadLaunch is an aggregator platform, mainly focused on trucks and trucking companies, and offers freight quoting, dispatch capacity management, load matching and similar services. With the input from CargoX, it is now able to offer a secure and trustworthy way of transferring ownership of global trade documents. User data and documentation is kept on multiple blockchains – but have one single-window application.
CargoX claimed this was the “first publicly available integrated product in logistics of this kind, which merges the strengths of public and private blockchains in one solution to provide business users with the best of both worlds”.
So what’s the advantage in using public blockchain? Stefan Kukman, chief executive at CargoX, explained: “While a private blockchain has its benefits, we firmly believe that public blockchain is the only way to go forward with public documents. A public blockchain is the only one that’s completely transparent and allows for independent operation and verification, which is essential when you want to operate globally.
“Trust is inherent, as there’s no global institution governing, managing, or blocking/permitting its use. For example, a public blockchain cannot be affected in any way by governments breaking agreements or countries leaving pan-country organisations. Which is essential for global trade.”
For those businesses asking what blockchain can do for them, MIT recommends their leaders “stay grounded by asking practical questions”.
MIT Sloan professor Gary Gensler said: “These big strategic questions aren’t hard to ask, but they can be hard to answer, which is where their value lies.
“Among them are ‘what’s the value proposition?’ ‘what problem will this solve?’ and ‘how will blockchain be better than other solutions?’
More specifically, blockchain is, by design, immutable — meaning, once it’s been added data in the blockchain cannot be altered. Does your application need that?”
According to MIT, the biggest challenge is collaboration between companies, with “projects that deliver valued outcomes to all parties more likely to succeed”.
Cory Skinner, chief executive and founder of RoadLaunch, said the partnership with CargoX was a “big step forward” into next-generation logistics.
“We are joining the strengths of different kinds of blockchain, public and private, in a way that users don’t need to lose time switching between them. Global organisations will be able to see an enhanced, trusted and simple interface for their shipment tracking and document transactions using multiple blockchain technologies.
“This is truly the world’s first project of this kind and the first step towards true blockchain interoperability.”