Master Thesis : Blockchain implementation in Shipping Supply Chains

Master Thesis : Blockchain implementation in Shipping Supply Chains with focus on Vetting

by Håvard Jarl Haugen Rivedal

July 2019
MASTER THESIS Department of Marine Technology
Norwegian University of Science and Technology

Summary

The shipping industry is facing a rapid change towards digitalization where blockchain based solutions may be part of the Shipping 4.0 revolution. Many types of maritime supply chains have large potentials for improvement – opening for modernized solutions based on innovation and new technology. Blockchain technology has been proposed to contain the properties needed to solve pain points in several areas and thereby also improve the managing of supply chains. The disruptive technology behind blockchain could, therefore, challenge conventional methods where trust and information-sharing among stakeholders are important.

The objective of this master’s work was to evaluate the potential of blockchain technology in supply chains related to shipping. This acted as a ground layer for the first research question: What are the potential advantages and challenges of the implementation of blockchain technology in shipping supply chains? The conclusion to this question is that blockchain represents a complex technology with several exiting and beneficial properties but also severe challenges. These advantages and challenges are discussed in the thesis. The complex picture of blockchain technology is both a result of its recent development as well as the tremendous interest created by the technology – causing a wide range of suggested and initiated applications. This complexity is a challenge to the implementation of standardized solutions highly requested by the industry.

Due to the semi-explored nature of the technology, it is important to have access to analytic tools that can be used to assess the complexity and uncertainty associated with the technology’s implementation. This formed the basis for the second research question: Which methodologies exist to provide decision support for the use of blockchain technology? To answer the research questions, a comprehensive literature search on blockchain technology in different scientific databases was performed. The systematic search resulted in 92 peer-reviewed papers. These papers, together with other secondary sources of information, were used to extractcredible information for a critical assessment of the properties of blockchain technology as well as its potential for applications within supply chains related to shipping.

On the second research question, it was concluded that few analysis tools had been developed and used – making it difficult to conclude on their reliability and usability for blockchain evaluation. No models for cost-benefit analysis have been updated to allow a quantitative analysis when implementing the technology in supplychains. Some scientifically designed frameworks are, however, available in the literature which can be used to perform a qualitative analysis to provide decision support for potential implementation. Such a framework was used to analyze the data from the case interviews.

The information from the literature search was also the basis for the case study where stakeholders within the ecosystem of vetting were interviewed to identify pain points and evaluate the potential for blockchain based solutions. It was previously reported that lack of trust between vetting stakeholders resulted in similar inspections being performed on top of each other. A central question underlying the case study was therefore if blockchain technology could decrease the number of executed unnecessary inspections.

The main conclusion from the Master Thesis was that blockchain technology is applicable to vetting information management. However, because of the recent improvements in trust, efficiency, and satisfaction among the vetting ecosystem stakeholders, a cost-benefit analysis should be performed before the potential implementation of blockchain is executed. Another finding from the case study was the strong request from many of the vetting stakeholders for a standardized and integrated system to collect, prepare, and manage the many different types of data involved in the vetting process. In this context, the importance of transaction data integrity was highlighted to provide immutable information, and the tracking of assets through the handling process and altered ownerships.

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