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BLOC pioneers blockchain-based biofuel supply chain tracking for the maritime industry

 Photo: BHP
Photo: BHP

Though the potential of blockchain technology has captivated the logistics and transportation industry, it has remained a technology that has struggled to make it past the research desks across several niches. Then again, the maritime market has shown a positive reception to blockchain, with large container lines and related startups looking to create blockchain platforms – primarily for container track-and-trace within its supply chain.

Blockchain Labs for Open Collaboration (BLOC) is a startup that is working diligently to provide blockchain-based solutions across different verticals, with the primary goal of bridging the gap between the digital and the physical world. BLOC recently collaborated with mining company BHP, Japanese shipping company NYK, and biofuel company GoodFuels, to deliver sustainable biofuel to the BHP-chartered, NYK-owned bulk carrier – all via BLOC’s blockchain fuels assurance platform.

“We are funded by Lloyd’s Register Foundation to build blockchain prototypes in the industry within the area of risk and safety. Together with the industry, we look to build consortiums in each of the areas we are focusing on,” said Deanna MacDonald, the CEO of BLOC. “Our first prototype is in bunker tracing. We are essentially looking into how we can provide quality and quantity metric associated with bunker deliveries before 2020, and also help with traceability and transparency within the supply chain.”

The year 2020 is crucial, because next year is when the International Maritime Organization (IMO) sulfur-cap regulation comes into effect. The rule states that the bunker fuel that container lines use must not have a sulfur content that exceeds 0.5 percent – a number that is seven-fold less than the current limit. Biofuel produced by GoodFuels is one of the many ways for container lines to navigate IMO 2020 limits, because the sulfur content in biofuel is under the authorized limit.

By tracing and delivering biofuel through its blockchain platform, BLOC has achieved an industry-first, as information of the whole transaction remains embedded within the system. “While working on the pilot, we had numerous challenges coming in from the industry at-large,” said MacDonald. “We were trying to push forward the boundaries of sustainable fuel sources, and furthermore measuring decisions based more than just on the price trend, but also with regard to compliance.”

Supply and demand sustainability of biofuels is critical to keep the transactions flowing, as in its absence the application would fall through the cracks. MacDonald explained that there were challenges with bringing fuel to the terminal and into the container ship – mostly to do with coordination at the terminals, transporting fuel containers to the barge and then transferring it to the vessel operators.  

“We also had to make sure container lines were willing to restructure their ships to suit biofuel. We trained the personnel who would be utilizing the system, those that are essentially performing the bunker fuel delivery,” said MacDonald. “We have not changed the process of bunker fuel delivery nor have we changed the human processes involved in it. It is just about putting the physical process in a digital form, and also ensuring that the information being put in the system is correct.”

Verifying data is difficult, because there can be garbage-in-garbage-out instances where false data can be fed into a blockchain system making it immutable. BLOC had to work on identifying the different information sources and delete results that were riddled with inconsistencies to ensure a seamless end-to-end transaction process.

MacDonald spoke about the need to create a standardized framework for regulating data collection, ensuring its sources have integrity, and also on fixing regulations for the utilization of gathered data.

This is a place where the open standards developed by the Blockchain in Transport Alliance (BiTA) would hold meaning, as the designed framework would act as a bedrock for several blockchain pilots that look to track shipments across different modes of transportation, including the maritime industry.

MacDonald contended that standardization was essential to induce trust in the system. This is particularly true in regard to the ability to judge the security of the system and to exchange data and assets across supply chains with unwavering faith. “That being said, I don’t think there will be a standard one-size-fits-all model that we can use to exchange data across the supply chain. Each of the applications that are developed now needs us to dive deep every single time, to define each of the features,” she said.