Our shopping, banking transactions, communication and almost everything essential has been expanded into a digital format. Today, every digital information is stored and recorded online including value exchange, digital transaction and so on. Similarly, Blockchain technology gathers information into encrypted blocks that cannot be altered, and it removes all restrictions by opening the platform across a global web of nodes or distributed computers. The world has started to witness the popular uses of this technology in various fields. In the latest, the bunkering industry is planning to implement Blockchain to enhance traceability and transparency in their functioning. In this blog, we will analyze the role that can be played by Blockchain in Bunkering.
What is Bunkering?
It is a process of adding fuel oil to bunker tanks of a ship via external source. This can also be referred as the operation of “supplying a ship with bunkers”. It can be sludge, fuel oil, cargo, diesel oil etc. However, bunkering has always been a reason for severe mishaps on the ship in the past. Hence, bunkering of diesel or fuel demands maximum alertness and precautions to avoid any kind of oil spill or fire accidents.
Apart from accident cases, Bunkering industry is currently facing problems related to transparency and traceability. Therefore, a group of organizations has decided to apply Blockchain technology to deal with these issues. The project was announced by Blockchain Labs for Open Collaboration via their subsidiary Maritime Blockchain Labs. Precious Shipping, Lloyd’s Register, BIMCO, Bostomar, GoodFuels and International Bunker Industry Association are their industry partners.
Now, let’s have a look on how Blockchain technology can revamp bunkering industry and promote transparency in this field.
How Blockchain Technology Can Help manage Bunkering industry?
Bunker industry has a complex mechanism to follow due to its intricate and compounded transactions. Blockchain technology can be a great help as it will manage transaction process seamlessly. It will provide a tamper-resistant, efficient and auditable chain of activities, keeping an eye on the quantity and the quality of recording procedures.
Blockchain technology can revamp Bunkering industry by establishing a system of trust and compliance between regulatory bodies and buyers. This will enhance reputation of the industry by bringing in more profit and confidence. As both the parties will be aware about the amount of fuel being purchased and shipped, this will result in decreased mishaps and increased safety. This complete process will develop a more reliable framework for precisely observing emissions like carbon and sulfur occurring from shipping.
“Bunker purchase contracts are one part of a complex chain of activities in the bunker industry. Blockchain “Smart Contracts” based on harmonized terms and conditions like the BIMCO Bunker Terms 2018 could be a stepping stone for the industry to achieve greater transparency and efficiency.” Quoted by Grant Hunter, Head of Contracts & Clauses at BIMCO.
Blockchain technology is already being implemented in shipping industries. In fact, several countries like Abu Dhabi, Antwerp and many more have started working on this technology. Industries all around the world are reaping the benefits of Blockchain technology. It is time that we start implementing this innovation in Bunkering industry too for better administration and documentation.