Shipowners will be forced to use blockchain as banking uses it as part of its due diligence and covenant structure.
A range of experts on the Nor-Shipping disruptive talk sponsored by the Vancouver International Maritime Centre concured that the digital ledger system will have a dynamic influence on maritime finance.
Erik Gaarder, a consulting director at Acando said blockchain is already redefining the way shipping exchanges value. “In the next five to 10 years, we will see radical changes in the way we finance, operate and manage risk within the shipping industry,” he said.
Gaarder believes the biggest application of blockchain will be “interoperable collaborative eco-systems”.
“This will be a battle of collaborative eco-systems,” he added. “Today’s competitor might be your most valuable partner (in the future).”
In the shipping sphere, Gaarder says Maersk has done a lot to further blockchain by developing a bill of lading system with IBM.
But he cautions that Norway and Europe are in danger of being left behind in blockchain developments, with China and other Asian countries recently putting a lot of resources into the technology.
Keynote speaker Erik Gaarder, Director, Management Consultant, Acando (pictured) was joined by a panel made up of Graham Clarke, CEO and chairman of Vancouver International Maritime Centre; Mark Clintworth, Lead, Shipping, Project Directorate, Air & Maritime Division, European Investment Bank; Inge Sandvik, chief digital officer, Wilh. Wilhelmsen; Salman Farmanfarmaian of ZEM
The Panel
Mark Clintworth of the European Investment Bank believes blockchain will lead to lower risk finance due to the use of smart contracts and the possibility to auto monitor an asset. These tools will also enable financiers to offer more wide-ranging packages to smaller and more problematic clients. But will some conservative shipowners simply decide not to get involved?
Mark Clintworth believes they won’t have a choice if they want to finance a ship in the future. Although this isn’t something they should fear, he added. “We will price you in, not price you out,” he said.
Salman Farmanfarmaian of ZEM envisages blockchain disrupting shipping by doing away with the need for the middle man. But he adds that just as with earlier technologies, we lack the imagination today to see what it will end up being used for in the further down the line.
Graham Clarke of Vancouver International Maritime Centre agreed that the application of blockchain will be broader than we think. He added that although there will be initial resistance to the system, once it arrives, it will become ubiquitous and will be a help in strengthening maritime clusters.
Inge Sandvik of Wilh. Wilhelmsen believes blockchain will help shipping players to become more transparent. He sees the new technology as an enabler of trust in the industry.
The Video
Brendan Bell
Fathom-News.com
