Blockchain Practica In Maritime Transport Richard Morton .

UN/CEFACT Blockchain Conference15th October 2018Hangzhou, ChinaBlockchain Practica inMaritime TransportRichard Morton,Secretary General, IPCSANico De Cauwer,Port of Antwerp

IPCSA Blockchain Bill of Lading InitiativeHarnessing the strength of Community Systems, this Blockchain initiative allows SME’s to sendtraditional messaging or web services where the PCS’s become the first Block and last block inthe chain. Thus giving access to SME’s new technology without having to directly implementthemselves. The PCS already being the trusted third party in the chain.

Challenges of ImplementationTechnology Technology maturity - Long transaction confirmation time(Affected by parameters such as Smart contract complexity,validators number, the technology used, etc) Lack of expert developers with work experience in severalprojects already working Interoperability of Blockchain networks- number of coexisting solutions

Challenges of ImplementationRegulations/Standards Legal recognition – carriers, Insurance companies, banks andcountries are required to adopt new regulations. Data ownership, personal privacy, general data protectionregulation. Missing open standards - Data Definitions should comply withcurrently used international standards (maritime industry isUN/EDIFACT and the Core Component Library of UN/CEFACT). Multiple players with different technology adoption.

Challenges of ImplementationOther obstacles Need to change business processes Creation of EcoSystem on both sides of the ocean Using blockchain only when needed

Opportunities of Implementation increases transparency , availability and reliability for allparticipants. (Enables traceability and preventing manipulationthrough the public auditability of the system, Sharing anupdated information (container loading, verifies a vessel hasactually departed) More efficient transfer of digital assets (Blockchain digitaltransfer of assets could provide the benefits of quick transfer,and security to both parties) Increased security

Opportunities of Implementation Automation of contractual obligations through SmartContracts (The exchange of goods against payment process ishandled through different financial and physical flows. Thesetwo flows can be synchronized if both assets exist in a digitalform. Swapping of assets can happen through smart contracts) Time and cost reductions Using blockchain only when needed

Richard Morton, IPCSA, Secretary GeneralE: richard.morton@ipcsa.internationalAssociate Members

The use of Blockchainfor certificatesmanagementPilot case :the ePhyto blockchain certificate in the Portof Antwerp

Port of Antwerp – in general2nd5Port of Europe in overallmaritime trafficLargest port area in theworld: 12.068 ha14th container port worldwide(10,5 mio TEU maritime, 3 mio TEUbarge)2nd largest petrochemicalcluster in the world1st breakbulk port in Europe10

Maritime supply chain - stakeholdersOriginOwner of the goods / shipper1 maritime transport,on average:Customs brokerDCHinterland transportcompanyPortTerminal operatingcompany 30 – 40 participatingactors 200 differentinteractions ondocumentsShipping companyPortForwarderAgentTerminal terland transportcompanyInsuranceOriginReceiver of the goodsCustoms broker11

Current logistics processes are lackingefficiencyNotransparencyFragmented30people and organizations,including more than 200different interactions andcommunicationsPaperbased/Data duplication50%of the cost of movinga container is relatedto paperworkErrorsUnderutilisation43%overall truck efficiency.24% running empty /57% average loadingNot coordinated4-5stack movesbefore picked bytransporter

ePhyto exchange via Blockchain Proof of Concept was set up for a specific apple tradebetween New Zealand (Port of Napier) and the Port ofAntwerp PoC builds further upon Smart Contract building blocks,on top of the basic blockchain technology Executed during June - August 2018(launched on June 14th)13

ePhyto exchange via Blockchain (2) Pilot objectives: creating a more secure and efficient maritime trade process bydeveloping a digitized phytosanitary certificate based on blockchaintechnology to make use of blockchain technology as a sustainable solution for reliabilityand traceability in b2g-interactions to illustrate a working concept for certificates management in a digital,electronic way to prove process improvements compared with the actual paper-basedprocess Benefits to prove: faster: no shifting and waiting on papers, paper losses, more efficient: NPPO sees the certificates much earlier in the process, asthey are uploaded more environmental friendly solution: less papers, no paper-transports, secure & reliable: no fraude possible via use of BC technology traceability via BC audit-trail14

Barriers encounteredBarrierPossible solutionLegal obligations to offer documents &certificates physically to differentgovernmental bodies-Lack of existing digital solutionsExtend digital solutions to replace physical processes(in a b2g environment)(a.o. further expansion of existing platforms)Lack of awareness towards thepossibilities of offering documents in adigitized wayAwareness campaignsLimited involvement of differentparties/stakeholdersDifficulties :- because of global character, not easy to involve all(foreign) parties involved to use/to oblige a digitalsolution- not easy to align processes towards not activelyparticipating actors-Adjust legislation: same legal validity for both digitalsigned documents as for physical documentsAdjustments, minimal, on a European level(a.o. promoting existing platforms)Source: “Digitizing the phytosanitary certificate” by C. Peeters (2018), based on a study by PwC (2017)15

Phytosanitary certificate – current flow A declaration used in international commerce for shipments of plants and plant products.Certificate issued by the National Plant Protection Organisation of the exporting country to bepresented to the NPPO of the importing country.Source: “Digitizing the phytosanitary certificate” by C. Peeters (2018)16

Pilot case – process flow17

Pilot case – blockchain infrastructure (1)18

Pilot case – blockchain infrastructure (2)19

ePhyto app Web UI access for every stakeholder in the supply chain(exporter, importer, forwarder & NPPO) APIs available, so ERP-integration is possible20

ePhyto app (2)21

An open technology framework to buildblockchain solutions for the logisticscommunityBlockchainServicesSecure ContainerReleaseSecure DocumentWorkflowYour blockchain-poweredapplication.Smart ContractFramework forLogisticsSmart ContractLibrariesFunctionalitiesBlockchain InfrastructureLogistics contractsDoc tFoundation contractsCommunity GovernanceBC clientEventsMappingIPFS docsMonitoringCachingEthereum Virtual Machine based framework22

Secure Document Workflow introduces atrusted & automated workflow totransfer documentsTransparencythe authenticity of the document can beverified at all timescreateTransferring ownershipone and only one party at a time holds theownership of the documentsharetransferTrustedSecureonly authorised parties can create, share orapprove documentsonly entitled parties can view the documentand the related informationRole-basedgovernance module to manage new &existingparties & definition of rolesTraceabilityall transactions are logged in an audit trail,recorded in the blockchainapprove/rejectCollaborationsharing comments, information & metadata,creating one single view across all entitledpartiesEasy integrationCustomisable flowour API module ensures low integration effortwith your existing workflow solutionthe workflow can be tailored to match yourspecific document flow

Roadmap on Secure Document Workflow Upload documentCheck integrity and originCheck history (audit trail)Meta-dataShare viewing rightsTransfer the ownershipApprove or rejectCommentsMultiple filetypes Ask approval* Document sets* Check printeddocument* Link a document set toa container or BL* Updates and versions** in development

Secure Document Workflow allowsefficient processing of phytosanitarycertificates, reducing paperworkFlow from New-Zealandto Port of AntwerpIntroducing an automated & digital workflowto transfer phytosanitary certificatesBlockchain networkBelfruco &Enza fruitSubmitToday’s paper flow adds cost,time & complexity to trade flowsAntwerp PortAuthorityRetrieve / Status- Printing the certificates is costly- Courrier is expensive and slow- Manual processing is timeconsuming, costly and error-prone- Data issues causes long waiting timesNational PlantProtectionOrganisationApprove / topPort CommunitySystemNational PlantProtectionOrganisationBenefitsof Blockchain- only 1 party at the timeowning the digital certificate- secured handover ofcertificates between parties- automated documentworkflow allowing checks andnotifications- tamper free audit trailproviding E2E transparency- paperless transfer providinginstant access to the data- immutable single source oftruth avoiding delays due tonon-synchronised data

Thank you !26 ArchitectNico De Cauwer – Digital Business Solutions, Sr. Businessnico.decauwer@portofantwerp.com

Port of Antwerp. IPCSA Blockchain Bill of Lading Initiative Harnessing the strength of Community Systems, this Blockchain initiative allows SME’s to send traditional messaging or web services where the PS’s become the first lock and last block in the chain. Thus giving access to SME’s new technology without having to directly implement themselves. The PCS already being the trusted third .