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It’s touted as the panacea for all ill’s that ails all industries -almost defying the search for the unified theory of everything. And considering that there are so many times I’ve been asked by clients, associates, well-wishers and even random strangers – “How do we get on to Block Chain” – here’s my take on the technology & its use in Shipping. As to how do we get on to Block Chain – we sure would like to help you get on board. Blockchain: What exactly is it? It has meant many things to many people – and Scott Adams with Dilber sums up what many of us know of it. Comics apart it is a technology that is here to stay. Shipping has always been considered a traditional industry, involving lots of paperwork such as charter party agreements, sales contracts, port documents, letter of credit, and bills of lading among others, are still plentiful. As the global shipping industry surpasses the $500 billion milestone , the stakeholders are becoming increasingly wary of the inefficient and obsolete processes that almost always lead to errors, waste of time, and a dent on profitability. The recent rush by Maersk and many other Carriers to partner with BlockChain solution providers – demonstrates the willingness of the industry to explore and implement solutions that can save time, money and human effort and reduce non-productive ‘paperwork’. Blockchain technology brings a much more sophisticated, secure transparent, and cost-efficient alternative solution to many of Shipping’s problems. First introduced in 2009, Blockchain soon came into the limelight as the technology that makes Bitcoin transactions possible. From there, it didn’t take too long for it to spread beyond the realm of virtual currencies and become almost synonymous with peer-to-peer data sharing platforms. Simply put, Blockchain is a technology by which any number of people can write entries into a record of information. This record of information is stored on a peer-to-peer network (read: a decentralized network). The information therein is not controlled by any particular user or group. Rather, it allows a community of users to make amendments and updates as and when required.  A business Blockchain is a shared immutable ledger where you can store a history of transactions. Financial institutions were among the earliest adopters of Blockchain technology. According to a Greenwich Associates study , financial institutions and fintech firms across the world spent more than $1 billion in 2016 to bring Blockchain to capital markets. As for the shipping industry, a collaboration between IBM and Danish transport and logistics giant Maersk found out that adoption of Blockchain could save the industry billions of dollars each year. As the joint venture between IBM and Maersk proves, it is a technology that is here to stay. How does it work? Apart from serving as a public ledger, which in itself is a big advantage, there’s another way Blockchain technology could revolutionize the shipping industry is by way of “Smart Contracts” Smart contracts are self-executing computer programs in Blockchain that automatically implement the terms and conditions of an agreement between two or more signatories. For example, consider the case of ODeX , where we manage electronic documentation and payment for the entire shipping process. With document templates already laid out, generating and signing electronic documents becomes as easy as clicking a button and there is no need to stand in long queues at the Liner. After everything falls in line, a decentralized computer network executes the terms and conditions. This network makes use of consensus protocols in order to zero in on the exact sequence of actions guaranteed by the contract’s built-in codes, thereby automating all calculations, approvals, as well as other transaction activities. A smart contract accomplishes all these by taking in the stored information as input and then assigning values to the input based on the terms and conditions specified in the contract. It then executes any number of actions as and when dictated by contractual clauses. Note the whole idea behind a smart contract falls flat on its face if we take Blockchain out of the equation. This is so because it is the security and immutability provided by Blockchain that empowers smart contracts to offer the kind of flexibility and operational efficiency that they do. Below is a representation of how all stakeholders can connect via Block Chain and eliminate repetitive, unproductive tasks – yet ensuring the best of security. What are some of the advantages of Blockchain in shipping? By replacing paperwork-centric transaction methods with Blockchain technology, the shipping industry will benefit on several fronts, including: Minimal processing time As Blockchain technology takes over, shipping companies are no longer required to deal with a never-ending cycle of paperwork to meet their regulatory and financial obligations. Since everything happens over a decentralized computer network, exchange of information takes place within minutes instead of weeks, which used to be the case with the “old school” shipping process. Not just that, the software code used in Blockchain will automate all the tasks that were previously executed manually. Optimal security All information in a Blockchain contract comes with high-level encryption. On top of that, it is extremely difficult for users to interfere with the system and make any unauthorized changes to the information stored therein. All these factors combine to give Blockchain contracts a kind-of immunity from manipulations and fraudulent activities Maximum transparency A smart contract stores its content using a sophisticated technology that allows access to anyone so long as they have the access credentials. This ensures absolute transparency for all stakeholders. Also, it is easier to evaluate the counter-parity risks considering that anyone with the required credentials can access the details of all past transactions conducted by all stakeholders. Cost-Efficiency Procedural delays, documentation, red tapes, discrepancies, and errors usually dent the profit-margin of any shipping company. A transition to smart contracts can help the industry do away with many of these unnecessary expenses while replacing them with the much cheaper cost of Blockchain technology. In conclusion So, Blockchain brings endless possibilities for the shipping industry. But promising as it is, the technology does have its fair share of challenges. Nonetheless, the way things are going so far, the benefits of Blockchain technology in the shipping industry seem to be outweighing its cons by a huge margin.