Businesses find they can save money, improve quality with blockchain
Blockchain seems to have taken the world by storm in recent years, breaking out of the realm of cryptocurrency and making an impact on shipping and business transactions made with hard currency. At some point, just about every industry will integrate blockchain into its operations. Supply chain and finance have been the quickest to adapt and are making big strides in showing the world what blockchain can do.
Port of Brisbane
In May 2018, the Port of Brisbane, PwC Australia, and the Australian Chamber of Commerce and Industry unveiled a proof of concept app for their Trade Community System at the port. It will be the first supply chain system at an Australian port to use blockchain technology. The port makes more than one million container movements annually, and together Australia’s five major ports make about nine million container movements each year. That number is expected to increase to 15 million by 2025.
Blockchain will eliminate redundancy in recording transactions. Bryan Clark, the chamber’s director of trade and international affairs said inefficiencies create additional costs up to $450 per container. Add it all up, and it’s easy to see how much money blockchain can save.
“The Trade Community System proof of concept is the first stage in building an innovative end-to-end supply chain that will digitise the flow of trading information, improve connectivity for supply chain participants, reduce friction for business, and reduce supply chain costs, providing unprecedented productivity gains for Australia’s international businesses,” PwC partner Ben Lannan said at the announcement.
Keeping Things Fresh
In July, the Commonwealth Bank of Australia oversaw the shipment of 17 tonnes of almonds to Germany using its blockchain platform to track the almonds as they were handled by exporter Olam Orchards, rail operator Pacific National, the Port of Melbourne, stevedore Patrick Terminals, and shipping carrier OOCL Limited. While the financials were not handled on blockchain, it demonstrated the platform’s ability to keep tabs on shipments thousands of miles away with several exchanges.
BeefLedger is bringing blockchain to the cattle industry. With more than 45,000 producers across Australia exporting nearly 70 per cent of their beef, it can be difficult to maintain quality standards, ensure freshness, and avoid fraud. With blockchain, it will be simple to track where beef came from, who handled it, and how long ago.
Similarly, the Sustainable Sugar Project spearheaded by the Queensland Cane Growers Organisation won a $2.25 million government grant. The project will use blockchain technology to trace the origin of sugar supplies in order to verify that farmers are indeed meeting environmental standards for producing sugar sustainably.
In another first, the government struck a $1 billion deal with IBM to create a nationwide blockchain over the next five years. IBM and Herbert Smith Freehills will work with the Commonwealth Scientific and Industrial Research Organisation’s (CSIRO) Data61 to “provide businesses with a secure, cost-effective means to digitise contracts, exchange data, and confirm the authenticity and status of legal contracts,” IBM Global Business Services Managing Partner Dee McGrath stated.
Data61 and the Commonwealth Bank have developed a “smart money” app that aims to allow users to put conditions on what they can spend money on and when. It would also have conditions on who could spend the money, easing the minds of parents from coast to coast. The technology will be able to integrate with the user-friendly New Payments Platform, which speeds up financial transactions.
In October, ASX Limited announced its plans to roll out blockchain technology for settlements by 2021. While it will represent an upgrade over ASX’s existing system, deputy CEO Peter Hiom isn’t getting overly excited.
“We’re not entering the fourth dimension here,” Hiom said. “It’s a database architecture that lets you do a bunch of things much more efficiently than you can at the moment.
“It’s a very clever architecture, but it is just a database architecture,” he said. “It doesn’t sound very sexy when you say it that way, but that’s kind of what it is.”
It might not be that exciting to Hiom, but if it saves businesses money and makes transactions quick and easy, they’ll take it.