Blockchain opportunities in the maritime industry (bunkering industry)

• Main Author: Tam, Benjamin Qing Yu
• Other Authors: Chiu Sai Hoi, Benson
• Format: Final Year Project
• Language: English
• Published: 2019
• Subjects: DRNTU::Engineering::Maritime studies
• Online Access: http://hdl.handle.net/10356/78486
• Institution: Nanyang Technological University

Blockchain as a technology has matured and now has numerous applications outside cryptocurrencies where it first surfaced from. The use of blockchain for increased efficiency in trade documentation and processing for example, is widely explored with numerous consortiums in the liner industry already involved. Provenance of blockchain however, have not been as widely explored and as of the time of writing, only a single provider in the bunkering industry has initiated a pilot test just weeks after the commencement of this paper. Concurrently, there is a great need for a solution in the maritime bunkering industry. The Houston bunker contamination issue in July 2018 have affected an estimated 100 to 200 vessels with no clear conclusion or solution in sight. In addition, by 1st January 2020 IMO’s global sulfur cap is set to take effect, spurring new blends of fuel to enter the market to meet the sulfur requirements and giving rise to concerns of worsening bunker quality. Both issues have the common concern of quality assurance, an issue the provenance in blockchain could solve. By tracing upstream and identifying malpractitioners more quickly and accurately, the damage done by contaminated bunkers can be better managed and mitigated in a similar occurrence. Similarly, non-compliant parties of the upcoming IMO2020 regulation can also be identified and held accountable more quickly and accurately. In both cases, the ease and accuracy of enforcement by blockchain will be a strong message of deterrence for irresponsible blending or non-compliance. However, there are several limitations and challenges facing the implementation of blockchain. Though most interview respondents have expressed receptiveness and optimism to the initiative, some have conveyed skepticism on the effectiveness of an actual implementation. For the case of preventing a similar contamination issue, one major concern is that parties in the bunker supply chain whose competitive advantage depend on the lack of transparency would resist such an initiative. To address this concern, the paper proposes the adoption of a permissioned blockchain system. This will restrict transparency only to relevant parties in relevant situations and allay concerns of unwarranted transparency. Another obstacle is the concern on data accuracy and authenticity when inputting data into the system via a human interface. To overcome this potential loop hole, pairing blockchain with other technologies such as Internet Of Things could be a potential solution and a research topic for future papers.