Dive Brief:

• Australian blockchain startup TBSx3 this morning announced a partnership with Hamburg Sud, shipment tracker DB Schenker and Australia's prime container port and supply chain operator, DP World Australia, to bring blockchain to the ocean shipping industry.
• "TBSx3 formed the consortium after the successful completion of one of the largest blockchain trials to secure cargo across the global supply chain in May 2017," according to a press release emailed to Supply Chain Dive. 
• The KPMG-verified trial tracked "the distribution of wines from Coonawarra, South Australia to the port of Qingdao in northeastern China" via the Hamburg Sud shipping line, according to American Shipper.

Dive Insight:

Last year, shipping lines recovered from consolidation but reeled from cyberattacks. This year, they're plunging into new technology.

Right on the heels of CMA CGM's announcement to host a tech start-up incubator to digitize ocean shipping, a team of tech, logistics and shipping companies forms a blockchain association in light of a successful trial.

For a while, Maersk has been the pioneer of new tech for ocean shipping with its IBM blockchain alliance. Even though Maersk owns Hamburg Sud, the launch of another blockchain initiative signals a wave of change for the industry.

Paul Scurrah, CEO of DP World Australia, reminded industry leaders the "fake goods problem is staggering," and praised the new association as a step in the right direction for industry collaboration to increase transparency and efficiency.

Many stories from ocean shipping last year highlighted the need for more transparency in an industry lagging in innovation and struggling to keep up with faster supply-and-demand cycles. For shippers, 3PLs and carriers, one indispensable need is tracking shipments and cracking down on fraud.

"Blockchain technology opens new possibilities for industry co-operation," Pieter Vandevelde, CRO of TBSx3, told Supply Chain Dive. "Our aim with forming this alliance is to reignite trust in every link in the supply chain and create a more transparent, ethical ecosystem of international trade."

Not only that, but Vandevelde said documentation amounts up to 7% of global trade. That means blockchain's capabilities could offer millions in cost savings to shippers, 3PLs, carriers and ultimately consumers.

"If we assume a base scenario of saving $100 per shipped container in paper digitization, that is a hundred billion," Vandevelde said. "The second cost saving entails from end-to-end supply chain visibility and the impact on counterfeit, both upstream and downstream. For example, the loss from counterfeit to pharmaceutical companies is estimated at $18 billion annually. The U.S. Department of Commerce estimates that counterfeit drugs provide approximately $75-$200 billion in annual revenue to illegal operators."

TBSx3's successful trial run implies that these companies have figured out an efficient use case for blockchain — something supply chains overall are still wrestling with. If this blockchain consortium proves to be successful, it could lead to wider blockchain implementation while also improving efficiency and transparency.