In a recent Maritime Executive article, our own Christian Ove Sørensen, global head of marketing and sales at Portix LogisticRead more
The State of SOLAS and The Unintentional Advancement of Blockchain Technology
It’s been a year since the Safety of Life at Sea (SOLAS) rule was passed. It requires shippers to provide a verified gross mass (VGM) of their packed container. The regulation is intended to help increase the safety of those aboard the ship. As with any bill, act, or regulation, only time will tell its efficacy. So after a year of SOLAS being on the books what, if anything, has it accomplished?
For the panic it caused the industry to be compliance ready, in truth SOLAS had a rather nominal enforcement. Apart from the fact that while shippers are providing their VGM’s as required, the accuracy of them leaves something to be desired.
“The feedback we’ve had from the limited number of places where there are check-weighing processes happening would appear to indicate that there is nominal compliance,” says Peregrine Storrs-Fox, Risk Management Director for TT Club.
“In other words, someone has found a value to put in the VGM bulks, but not necessarily the right value. We’re finding quite significant discrepancies in excess of a tonne,” he added.
While there are a number of discrepancies from a compliance standpoint, that’s not to say that SOLAS was a complete flop, far from it in fact.
The Embrace of Technology
Setting aside the enforcement and accuracy issue for a moment, there is a significant take away from the implementation of SOLAS. Initially, it caused some serious concerns amongst the international freight community. Everyone scrambled to get ready. Yet, when it came time for SOLAS to go into effect, there was a 95% implementation rate amongst carriers around the world.
“In fact, the implementation process went smoothly, especially when you consider all the noise that was made about the policy, to begin with” according to Henning Voss, Co-founder of Portrix Logistics Software. “Why the smooth implementation? Because digitalization made it more easily adaptable for the entire industry” - he continued. eVGM portals digitally connect all stakeholders. Carriers, freight forwarders, shippers, weigh stations. Solutions such as PLS’s have made sending and receiving VGM submissions easier and more efficient. With a digital platform, PLS has managed to turn what could have been a volley of emails, phone calls and faxes, into a few simple clicks. Seamless data transfer and communication make it easy to comply.
Blockchain and SOLAS
While the original purpose of SOLAS was to protect vessels from haphazard loading practices which could put cargo and crew in danger, it’s also having an impressive, albeit unintended side effect. Namely, a strong launch point for Blockchain technology.
Marine Transport International (MTI) has developed software which will make sharing of container weights required by international regulations easier by connecting to a blockchain system using a combination of existing, or legacy, technologies. Through this, the blockchain provides invaluable “interoperability,” “a universal way to input information into the technology from multiple supply chain sources, including suppliers, shippers, customs, and terminals,” says Hugh Morley, Senior Editor for the JOC.
“Mike Simon, the principal consultant with DefinedLogic and a long-time analyst of technology in the container shipping field, said the MTI pilot appeared to be a good one, and it provides “a significant stepping-stone” toward proving the effectiveness of blockchain. He said MTI’s goal to create software that would make blockchain usable with a variety of industry stakeholders and their legacy systems is an industry ‘holy grail,’” the JOC article says.
“Blockchain supporters say the technology could prove significant in sending cargo around the world because it stores information on numerous computers, enabling users to access information individually while providing a constant and secure record because the information cannot be retroactively altered. So, for example, a bill of lading could not be secretly altered during the shipping process, because the original is always visible,” Morley added.
While the new system from MTI is based on providing VGM access for oceanic freight companies, the potential of this system is virtually limitless. The concentration of useful and actionable data provided by blockchain systems can be utilized by the entire supply chain, providing insight, visibility, and flexibility to the supply chain from start to finish.
Stay tuned! More about blockchain in our next article.
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