Using blockchain to tackle dangerous goods cargoes

The frequency of container fires had been a long-standing concern, while the events in Tianjin back in 2015 showed that this was not a problem confined to vessels – ports were also at risk, writes North P&I Club’s Alvin Forster in an article on how technology can be used to combat the problem of dangerous goods cargoes

He noted that the causes of container fires could not always be established, because the evidence was generally lost in the fire. However, Forster said that it could be said with some confidence that misdeclared and undeclared dangerous goods carried within containers was at the centre of this problem.

Forster said that it was a complex problem and that therefore there was no simple answer. There were numerous initiatives being explored by different parties to tackle the risks associated with carrying dangerous goods cargoes. These ranged from risk-based stowage, through cargo-booking alert systems, to improved fire-fighting arrangements.

One initiative involved the use of blockchain technology. Forster said that key features of blockchain included its ability to provide transparency in the supply chain and the ability to display changes quickly and reliably to all involved. He said that this could prove useful when we think of some of the fundamental problems when shipping dangerous goods by sea.

The shipping of dangerous goods relied on an effective and reliable exchange of information throughout the chain – from shipper to carrier to receiver and all those in between, and those on the sidelines. The current method was slow, inefficient and prone to errors. This was further complicated if the cargo changed hands during shipment.

Forster said that a new consortium had been launched to explore how blockchain could help. Maritime Blockchain Labs (MBL), a subsidiary of Blockchain Labs for Open Collaboration (BLOC), ran a demonstrator project which was scheduled to end last month. MBL is examining the use of blockchain to improve the tracking of dangerous goods cargo.

Marc Johnson, Chief Sustainability Officer & Director of MBL, said that “to reduce the occurrence of misdeclaration of dangerous goods resulting in safety risks such as fires, and personal exposure to hazardous materials aboard ships”.

The demonstrator project focused on booking processes, approvals and information flow processes associated with dangerous goods. Forster said that this should significantly improve the verification and traceability processes, as well as digitizing the know-your-customer obligations.

Because blockchain is a shared tamperproof ledger that records the entire history of transactions, when used in the right context it could make information exchange quicker, safer and easier. Forster noted that a recognised ploy of some shippers was to declare cargo as non-dangerous at the time of booking but then amend it at the very last minute to declare that it is in fact a dangerous goods cargo.

Forster said that the shipper hoped that the changes would not be processed in time and that the carrier is not informed at loading; as a result carrying the cargo as if it were non-dangerous. However, a blockchain-based system could result in the carrier being better-positioned to make the necessary changes and compliance arrangements.

A further benefit would be that all of the data related to the nature of the dangerous goods cargo would be stored in one place, immediately accessible to any permissioned party participating in the transaction. This could include material safety data sheets (MSDS) and emergency response procedures.

However, Forster accepted that blockchain alone could not solve the fundamental problem of an unscrupulous shipper wilfully misdeclaring the cargo at time of booking.

Johnson said that MBL recognized that a blockchain-based platform in and of itself would not alleviate fully all the issues currently faced by the industry. He said that MBL saw great benefits from making better use of purpose-built remote sensors and devices, that provided actionable in-transit information about the location, condition, and security of the goods being shipped and to securely communicate with the platform to safeguard against any inconsistencies in the cargo declaration, whether intentional or not.