Using Tech to Tackle Dangerous Goods Cargoes

The TT Club recently reported that on average a fire is reported on a container ship every 60 days. The events in Tianjin back in 2015 show that this is not a problem confined to vessels – ports are also at risk. Wherever a container fires occurs, the outcome can be catastrophic.

The causes of these fires are not always established. The evidence is generally lost in the rages of fire. But it can be confidently said that mis-declared and undeclared dangerous goods carried within the containers is at the centre of this problem.

A complex problem is never solved by a simple answer. There are numerous initiatives being explored by different parties to tackle the risks associated with carrying dangerous goods cargoes, ranging from risk-based stowage to cargo booking alert systems and improved fire-fighting arrangements.

One initiative underway is using blockchain technology. It may seem that in recent years blockchain has been extolled as the answer to all our problems. But key features of blockchain include its ability to provide transparency in the supply chain and the ability to display changes quickly and reliably to all involved. This could prove useful when we think of some of the fundamental problems when shipping dangerous goods by sea.

Exploring blockchain

Shipping dangerous goods relies on effective and reliable exchange of information throughout the chain – from shipper to carrier to receiver and all those in between or on the side lines. The current method is slow, inefficient and prone to errors. This is further complicated if the cargo changes hands during shipment.

A new consortium has been launched to explore how blockchain could help. Maritime Blockchain Labs (MBL), a subsidiary of Blockchain Labs for Open Collaboration (BLOC), is running a demonstrator project which is scheduled to run until October 2019.

They are examining the use of blockchain to improve the tracking of dangerous goods cargo. Marc Johnson, Chief Sustainability Officer & Director of MBL, tells of their vision “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 is focussing on booking processes, approvals and information flow processes associated with dangerous goods. This should significantly improve the verification and traceability processes as well as digitising the all-important ‘know-your-customer’ (KYC) obligations.

How could blockchain technology help?

As blockchain is a shared tamperproof ledger that records the entire history of transactions, used in the right context it can make information exchange quicker, safer and easier. Advocates of blockchain say that in addition to streamlining the process (and saving costs), it provides a high level of visibility and transparency.

Let’s look at how this could apply to carrying dangerous goods cargoes. A recognised ploy of some shippers is to declare the cargo as non-dangerous at time of booking but then amend it at the very last minute to declare that it is in fact a dangerous goods cargo.

The shipper hopes that the changes are not processed in time and the carrier fails to be informed at loading, therefore carrying the cargo as if it were non-dangerous. But using a system based on blockchain, the more timely and transparent exchange of information could result in the carrier being better positioned to make the necessary changes and compliance arrangements.

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

Tackling wilful misdeclarations

The tamperproof qualities and transparent nature of blockchain are clearly positive. However, blockchain alone cannot solve the fundamental problem of an unscrupulous shipper wilfully mis-declaring the cargo at time of booking.

Marc Johnson is candid about this and told us that MBL recognises that a blockchain-based platform in and of itself will not fully alleviate all the issues the industry currently faces. But MBL see great benefit in making better use of purpose-built remote sensors and devices, that provide 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.

By

Alvin Forster
Deputy Director (Loss Prevention)

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Thanks to MBL for their input into this article. Find out more about their projects at: www.maritimeblockchainlabs.com