%20(500%20x%20334).jpg)
A senior broker specialising in transport and logistics has said the sector is ideally suited for blockchain – however, he’s also warned the tech doesn’t come without its risks.
“There’s definitely a space for blockchain within the sector and we’ve seen trials in the use of blockchain already,” says Mark McNab, national practice leader of Aon’s transport and logistics team.
FedEx, UPS and port operator DP World Australia are just some of the major organisations testing the blockchain waters while IBM and Danish shipping giant Maersk have also teamed up with the aim of commercialising blockchain technology.
“We’re starting to see so many different organisations exploring the technology – from forwarding organisations to shipping companies, really right throughout the logistics sector,” says McNab.
It’s no surprise so many organisations are catching on – the technology has the potential to minimise payment disputes, decrease administration costs, and increase operating efficiencies.
In fact, a recent study found that a basic refrigerated shipment passed through more than 30 different organisations and required over 200 separate communications – any small bump in the process could cause the container to be held up or lost. With blockchain, the steps are recorded securely and immutably in real time.
However, while a growing number of companies are beginning to tune in to the benefits of blockchain, McNab says there are still some question marks over the wider implications.
“I do think we’re yet to fully understand exactly what efficiencies and what risks come through with blockchain technology,” he tells Insurance Business.
“There are definitely gaps in knowledge when it comes to things like who owns what at certain points in the transaction and even how blockchain works from a legal perspective across borders and multiples of borders,” he says. “It’s quite a Pandora’s box at the moment.”
While the technology still presents some significant grey areas for the insurance industry, McNab is confident the transport and logistics sector can benefit from careful implementation.
“I think the logistics sector is perfect in terms of being able to integrate something like blockchain, but I do believe that it’s something enterprises need to consider carefully,” he says.
