Blockchain technology can spur seamless and efficient international trade

Though blockchain has had its fair share of advocates and detractors in the transportation and supply chain sectors since its advent, its relevance within the market cannot be questioned. For instance, earlier this week, global container lines CMA CGM and the Mediterranean Shipping Company (MSC) joined TradeLens, the blockchain-based digital shipping platform developed by Maersk and IBM. With this, TradeLens accounts for shipping data of over half the number of container lines that sail across international waters – a remarkable stimulus to the possibilities of blockchain.

In April, two economists, Christine McDaniel, trade expert from the Mercatus Center at George Mason University, and Swedish economist Hanna C. Norberg, wrote a research paper on blockchain’s potential to facilitate a more efficient and seamless global trade, arguing blockchain can help expedite customs procedures, reduce expenses and boost both global trade volumes and economic output.

“Blockchain technology can be used in any instance where there’s a role for a middleman or an intermediary. As trade economists, we are interested in things that can reduce trade costs, reduce barriers to the flow of information, money, labor, and capital across borders,” said McDaniel. “Blockchain is really exciting as it can facilitate international trade across three areas – trade finance, customs and the provenance of goods.”

Though blockchain can be used to render paperwork in freight movement obsolete, McDaniel pointed out that it largely depended on the desire and willingness of government agencies. “Even if you have a company that is ready to utilize blockchain, you still need the relevant government agencies to have the technical infrastructure, the willingness to adapt and a public policy environment that can help fill in the little holes along the way,” she said. “You also can’t just have one company or one government agency to adopt it, but you need enough…

Source Link