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Study conducted by Cointelegraph Consulting and Insolar integration of Blockchain in the supply chain of Western Europe will decrease costs by 450 billion dollars

Blockchain Will Decrease Supply Chain Costs in Western Europe

Study conducted by Cointelegraph Consulting and Insolar integration of Blockchain in the supply chain of Western Europe will decrease costs by 450 billion dollars

  • A study shows blockchain use in the supply chain of Western Europe could decrease costs by USD 450 billion
  • Industrial businesses can expect 25% increase of gross return on capital by 2035

According to a study conducted by Cointelegraph Consulting and Switzerland based blockchain firm Insolar, costs relating to supply chain in Western Europe could be significantly reduced with the implementation of Blockchain technology. With a decrease of about 0.4% to 0.8% and given the high volume of the supply sector, the change would be quite substantial, translating into about USD 450 billion.

The report states:

“94% of supply chain leaders say digital transformation will fundamentally alter supply chain management. In the transition to industry 4.0, industrial businesses can expect a 25% gross increase in (Return on Capital) by 2035.”

The study says that the current processes in the supply chain are unable to provide transparency to track the movement of goods in the chain, and that there exists a ‘visibility gap’. This means that parties in a transaction become prone to various frauds, accountability issues, late delivery, poor quality, lost sales. Blockchain, if introduced in the network, would mean that data of the transactions could be stored immutably, which when coupled with the smart contracts, would provide a new level of business power automation.

Insolar CEO Peter Fedchenkov stated that this new integration of Blockchain into the supply sector need not necessarily mean the rooting up of the existing IT infrastructure. In fact, it can complement the same.

 

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Microsoft Behind New Major Blockchain Aviation Logistics System ”TRUEngine”

Microsoft Behind New Major Blockchain Aviation Logistics System ”TRUEngine”

Microsoft Azure has partnered with major global supplier of jet engines, GE Aviation, to build a blockchain supply chain tracking system.

The blockchain platform is a derivative of Ethereum, built with the ambition of introducing a higher degree of transparency to the shipping process which can then be utilized in tracing standards of engine performance. The ledger system will monitor and collect data on the engine parts as a new means of averting potential failures, as in the recent case involving Boeing.

Right now, the system is internally being referred to as ”TRUEngine.”

David Havera, blockchain CTO of the GE Aviation Digital Group recently described the crucial nature of maintaining the highest possible quality standards:

”A quality event in the aircraft engine industry is catastrophic. And to research that takes months of manual time. Driving efficiencies, accountability and visibility into the process of making an engine will make us all safer.”

GE Aviation is responsible for supplying jet engines to around 60% of the global airline industry.  As well as blockchain, the group has turned to other emerging technologies, including IoT and data science solutions.

 

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London Metal Exchange Supports Plan for Blockchain Metal Tracking

London Metal Exchange Supports Plan for Blockchain Metal Tracking

The world’s largest metal derivatives market, the London Metal Exchange (LME), has reportedly backed an initiative that would track physical metal using blockchain technology.

The Financial Times (FT) cited in a report that “people familiar with the effort” had confirmed LME was in support of the consortium initiative spearheaded by Swiss commodity trading company Mercuria.

While LME chief executive Matt Chamberlain did not directly come out in support of the initiative when he was approached by the FT for comment, he did say if such a scheme was successfully instated it would be “a huge win for the metals trading community”.

The scheme dubbed ”Forcefield” would enlist a blockchain system to track the movement of physical metals internationally, with advocates saying it would the help buyers track the source of metals while helping traders prove their ownership.

Blockchain in the logistics industry has proven one of the most successful use cases for the technology. Experts have praised blockchains transparency and ability to streamline logistics in global trade while, as well as helping to identify against counterfeit goods.

 

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Brexit Deal or No Deal: The Effect on UK’s Blockchain Industry

Brexit Deal or No Deal: The Effect on the UK Blockchain Industry

The United Kingdom’s impending exit from the European Union has the economy on edge. Parliament has yet to approve Prime Minister Theresa May’s exit agreement and a so-called “no deal Brexit” is a looking like a real possibility.

Just a few months away on 29 March, the UK is scheduled to leave, and nobody knows quite how the laws and regulations that the EU currently govern will be affected, what the situation will be for EU workers, or what trade relations will be in place for the rest of Europe.

With these instabilities in mind, here are some of the effects Brexit may impose on the UK’s leading blockchain industry.

Financial regulation

It is no secret that the City of London is Europe’s financial capital but many have questioned whether it can remain in this position when the UK leaves the Union. Many financial service providers are there, after all, to provide services to European clients from a location that adheres to all of the required regulation.

If the UK no longer follows EU finance regulations, it will likely fail to attract these international firms. Coinbase, for example, has already moved its European base from London to Ireland. Part of the blockchain industry’s success in the UK can be attributed to the existing infrastructure for firms and international talent that the City of London attracts. In this case, what is bad for mainstream finance also looks to be bad for blockchain.

However, Brexit also offers the UK a chance to create its own unique financial policies which have the potential to produce a more crypto-friendly environment than that imposed by the EU. While the Union requires firms to uphold strict know-your-customer (KYC) and anti-money laundering (AML) policies for their clients, Brexit would be the chance for the UK to create a more autonomous financial sector, although there has yet to be any indication of a move in this direction.

Another case that could work in the blockchain industry’s benefit is if the UK chose to adjust its DPA 2018 legislation (its version of Europe’s 2018 General Data Protection Regulations) which has caused much friction for operations built on immutable blockchains that do not readily allow the removal of data as the privacy regulations require. Any data regarding European citizens that is stored on a blockchain would still be subject to GDPR, although Brexit would give the UK an opportunity to create more flexible regulations compared to GDPR.

EU workers

The blockchain industry faces the same challenge as every other sector in the UK regarding migrant workers from the EU. While the government has just launched a scheme that would allow current EU residents to remain living and working in the UK after Brexit, the plan has faced scrutiny over its impracticality in registering residents. This owes to the facts that the application only works on the most recent versions of Android phones, and a fear that they are not doing enough to let people know they must register themselves.

Europeans who fail to register on the Settlement Scheme could find themselves deported from July 2021.

London, the UK blockchain hub, is compiled of 14% European workforce, with 26% of workers coming from outside of the EU.

Trade deals

As it stands, Theresa May has ruled out the chance of the UK remaining in the Single Market and the European customs union after Brexit.

This will impact both businesses that use blockchain to export or import products between the UK and Europe, as well as those that provide services of any kind within the region. Services account for 70% of economic activity in the EU and the Single Market gives companies the freedom to offer these services anywhere within the Union.

The last few years have seen cryptocurrency exchanges such as Binance expand across Europe, but leaving the Single Market means they would have to operate with the UK’s own unique regulations. To keep up interest from exchanges, the UK will have to prove its worth the extra costs required to move operations locally.

Losing its voice

The UK has one of the leading blockchain industries in Europe, but Brexit could result in a loss of political power in drafting crucial legislation for the technology. For one, with no more Members of European Parliment representing the UK after Brexit, the country will no longer be allowed any official input in creating EU policy.

Pro-crypto MEPs such as Eva Kaili have proven how effective a positive voice can be in the governing body, with her efforts resulting in the crafting of the parliamentary Blockchain Resolution.

Blockchain and Brexit

It is not all doom and gloom for the industry, however. Blockchain has indeed been given a spotlight by the UK government for its potential in providing a solution to the customs crisis, being hailed as an opportunity to continue providing ”frictionless trade” with the EU.

Particularly valuable on the contentious issue of the Ireland border, blockchain has been hailed as a way for the government to track the movement of goods in a transparent, immutable, and non-invasive way. The UK’s finance minister Philip Hammond even called blockchain an ”obvious” solution to the problem.

An uptick in blockchain logistics solutions could well increase the levels of UK companies that adopt the technology, but financial services providers that utilize blockchain may find themselves having a more difficult time adjusting to the forthcoming new regulations.

May’s latest update in Parliment on Monday 21 January included a commitment to sticking to the 29 March Brexit date so there is not long left to see what the deal will look like, if there is one at all.

 

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South Korean Port Receives Blockchain Enhancements to Shipping Logistics

South Korean Port Receives Blockchain Enhancements to Shipping Logistics

Government ministries in South Korea are pushing the nation’s blockchain infrastructure to the seas in a new marine logistics project.

Logistical supremacy

The Ministry of Science, ICT and Future Planning (MSIP) will be collaborating with the Ministry of Oceans and Fisheries (MOF) on the newly launched blockchain pilot. With the intentions of increasing container shipping efficiencies, the two ministries will begin the trial this month at one of the country’s largest shipping port in Busan.

According to an official press release, Busan’s major southern port will be one of the six major public demonstration projects as part of the USD 207 million Blockchain Technology Development Strategy, which had been originally announced in June, and includes plans for smart cities, factories, real estate and other sectors.

The project should be a rather telling moment for the blockchain industry due to the extent of the pilot. Busan’s port is reportedly the second largest port of transit in the world and according to Marine Insight, the port is the 5th busiest in the world. Furthermore, there are major companies who will be participating in the pilot, including Busan New Port International Terminal, Hyundai New Port, Busan New Port Co., Ltd. (Container Terminal), Hyundai Merchant Marine (Shipping Company), and Lotte Global Logistics (Shipping Company).

Translated from the press release, the MSIP said: “We expect that the blockchain technology will be used in various fields such as port logistics, where various parties are involved and data sharing is important in order to improve business process and service innovation.”

The MOF added that real-time data sharing can increase port logistics, which will be primed for the fourth industrial revolution. The press release notes that should the pilot prove successful, then the ministries will look to expanding the technology to other ports and regions of the country.

Buoyant blockchain

Earlier this year, it was revealed that Samsung was investing in blockchain shipping technologiesIn September, the tech company had begun developing a blockchain platform for the South Korean Customs Services as well as 48 organizations from numerous sectors including shipping and insurance. A month later, Europe’s largest port partnered with Samsung, indicative of an industry set to marry with blockchain technologies.

Tech giant IBM is no stranger to blockchain endeavors either, and this year they have managed to partner their project with Hong Kong’s second largest shipping container terminal. The project which has garnered attention from a significant number of international operators and docking hubs which includes the Spanish port of Valencia.

 

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Sustainable Sugar Blockchain Project Receives $1.7M from Australian Government

The Australian government has funded the Sustainable Sugar Project with the equivalent of USD 1.7 million to track the origin of sugar imported into the country.

The project has been curated by the Queensland Cane Growers Organization using blockchain technology to track the source, and movements of sugar being sold in Australia. It is part of a larger initiative of the Smart Cane Best Management Practice that is attempting to bring transparency to the sugar industry and promote sustainability.

The organization spoke to Foodnavigator-Asia on Monday, outlining the benefits of utilizing blockchain technology in the food industry, noting that its immutable nature with all transactions recorded can give consumers confidence in their purchases and promote improved food standards policies.

The Sustainable Sugar Project is a collaboration of industry expertise from individuals in the farming and blockchain sectors, basing the initiative on three key factors: productivity, sustainability, and profitability.

Agriculture minister David Littleproud said the technology involved with the project would help assure buyers of the sustainability of the sugar and practices involved in cultivating it. He predicted that as the demand for sustainably-sourced products grows, people will be happy to pay more for sugar that can be proven to meet their required expectations.

Blockchain in logistics

This is not the only exciting blockchain innovation Australia is involved with right now, however. The Commonwealth Bank of Australia announced Monday it had successfully shipped 17 tons of almonds from Sunraysia to Hamburg, Germany while utilizing a newly-developed blockchain platform.

These cases are both examples of the practical use-cases of blockchain in international supply chains, allowing the movements of commodities to be tracked across the globe. Blockchain technology is being hailed by logistics companies as a cheaper, more effective alternative of tracking complex supply systems.

 

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Samsung Investing in Blockchain Shipping Technologies

Samsung is joining a number of other companies in exploring the idea of using blockchain logistics to streamline global supply chains. It is reported that the tech giant has already begun developing a distributed ledger system to monitor international shipments.

Recently, IBM has teamed up with Danish shipping giant Maersk and India’s JM Baxi, in order to digitalize their import and export process with blockchain.

Energy is one of the most frequently traded resources and the implementation of a more efficient system has captivated market leaders. BP was testing a gas trading platform, while E.ON and Enel, have also experimented with similar energy trading platforms.

Sinochem, one of China’s main oil companies, used blockchain to monitor and store data on a shipment of gasoline to Singapore.

Issues surrounding current logistics

The top 20 exporters of containerized cargo transport a total of around  127.6 million fully-loaded TEUs (twenty-foot equivalent unit) globally a year. Countries with a higher level of human intervention can take up to 11 days to process logistics. OECD countries have managed to reduce this to about 9 hours but the process is still prone to human error.

Fraudulent goods are worth USD 1.4 trillion globally and tax avoidance continues to be an issue. Not only does this affect profits but health depending on the type of product and its use. There is a growing concern among consumers about imitations and problems with verifying the authenticity of a product.

Documentation can be held up or lost by middlemen, resulting in perishable goods being stuck in transit. This can end up costing up to a fifth of the total transportation costs as well as the price of the goods.

Benefits of blockchain logistics

Blockchain is set to help shippers, ports, customs offices and many other parties in the global supply chain by replacing paperwork with irrefutable digital records.

Blockchain could provide proof of provenance for goods by tracking them globally from the manufactures. Import details, fees, and taxes could all be programmed into smart contracts that release payments automatically once the conditions where met. Customers will see an improvement in services as the overall speed of the processes increase.  Tracking will include improved shipment data with timestamps and data being instantly accessible through a ledger.

Blockchain will benefit logistics by providing enhanced security and vendor management, as well as preventing the loss of goods.

 

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