The Port of Rotterdam in the Netherlands is following the example set in Antwerp, Belgium and testing out a blockchain-based application for processing containers.
A pilot of the technology, from Belgian startup T-Mining, was carried out in Rotterdam during the summer after it had earlier been deployed in Antwerp. The Secure Container Release application replaces the current method of container handling using PIN codes, which has been susceptible to fraud, and all the associated risks.
Every year, millions of containers are unloaded in the Port of Rotterdam and then continue to their final destination over land. Picking up these containers in the port is a complex process in which shipping companies, forwarders, carriers and terminals have to work closely together to ensure smooth and safe release.
To be able to collect a container from the terminal, a lorry driver must have a valid right of release. This release is given by a shipping company, which passes it on to a freight forwarder, which in turn engages a carrier. Via the carrier, the driver receives the order to collect a specific container from the terminal.
Currently, a PIN code is used for this purpose, but this requires a lot of manual handling by the various parties. Any error in this process can lead to loss of time, complaints and annoyance on the part of customers and partners – but also to possible fraud.
The European Monitoring Centre for Drugs and Drug Addiction’s 2019 European drugs report reveals a striking increase in drug smuggling in large quantities through large ports and by means of containers. Although drugs enter Europe by various means, the largest quantities are smuggled via maritime freight transport. In other words, sea containers. This makes ports and terminals an attractive target for organised crime.
Nico Wauters, CEO at T-Mining, explained the risks associated with the current PIN code: “Criminals use social engineering to find out which employees within an organisation have access to the PIN code for releasing certain containers. In the case of employees who are vulnerable to bribery, a large sum of money is offered to forward or copy the PIN code. In this way, organised crime can have the PIN code at its disposal for collecting a particular container.”
T-Mining’s blockchain technology uses a digital token instead of a PIN code for the release rights for containers. This should make the Port of Rotterdam smarter, faster, more efficient and safer, said Wauters. “Compare it to a digital relay baton – something that can easily be passed on from one party to another,” he said.
“Because we use blockchain, the token cannot be copied or stolen. That makes the release process safer for everyone involved in the supply chain. It also offers the possibility to enrich information, to add extra data to the digital relay baton.”
Wauters added: “Many containers are part of a ‘bill of lading’, a document representing ownership of the goods. A cargo, for example, is spread over 10 containers that ultimately have to be picked up at the terminal.
“You often see that a specific driver is assigned to a specific container, but in practice they never neatly pick up the cargo in order. Perhaps container number two is at the bottom of the stack, which means that the terminal has to move all those containers.
“When you can add extra information to the token about, for example, the quantity of containers among which the cargo is divided, it doesn’t matter which container a driver takes with him. That saves an enormous amount of time and money. It works more efficiently – a driver doesn’t have to wait as long.”
This is a scenario that T-Mining is currently working hard on, said Wauters. “Then we will no longer talk about Secure Container Release, but about Smart Container Release.”
In the summer of 2017, T-Mining started a pilot in the Port of Antwerp, and 120 companies are now working on the platform for the digital token handling of containers. Preparations are now being made for a pilot in the Port of Rotterdam.
Earlier this year, T-Mining was selected by PortXL for an accelerator programme and is working with the Rotterdam business community and the Port of Rotterdam Authority on the practical implementation of the technology.
“It is not a standalone application, but an API [application programming interface] that is linked to the ERP [enterprise resource planning] systems of the supply chain partners, so that the token can be passed from one party to another without any problems,” said Wauters. “That means an integration process in advance, in which a connection has to be made with the systems of the shipping companies, terminals and forwarders.”
Digital wallets
In contrast to a cloud solution, blockchain technology works in a decentralised way, said Wauters. “The last thing we want is for the information stored in the blockchain to be accessible to all kinds of people. That is why it is also important that we safeguard the identity of users. We do this by means of digital wallets, which retain the cryptographic key of the user’s identity. These wallets are also stored decentrally, on the user’s own systems, so that only that user can claim their identity.
At the same time, this safeguards a user’s commercial privacy, said Wauters. “Who you work with in a supply chain is important information that you don’t want to be stored centrally somewhere and might end up in the wrong hands,” he added.
This information is also stored in the digital wallet. “It’s more complex than a traditional cloud solution and so takes more time to set up everything correctly, but that’s a one-off,” he said. “When the system is up and running, it is extremely easy to use because you no longer have to log in manually all the time. The wallet takes care of that for you.
“In fact, our application provides two-factor authentication in the background, so you can be sure you are working safely and reliably.”
Backward-compatible
Not only is rolling out, connecting and setting up the system a complex and extensive job, but there are also many parties involved in port transport. It is therefore impossible to modify a terminal’s entire infrastructure in a single day, physically as well as digitally. That is why T-Mining works with a backward-compatible system.
“In the long run, we want to move towards a fully digital solution in which the lorry driver can identify himself via biometrics,” said Wauters. “Then he won’t even need a mobile phone. Through this identification, the terminal knows exactly which container the driver is allowed to take with him without the driver having to get out and enter a PIN code somewhere in a physical space or having to use countless different applications to identify himself, log in and show the right of release.”
Transporting a container from A to B involves an average of 30 different parties who traditionally carry out an average of 200 interactions, mostly by email, telephone and fax. This means paperwork accounts for a large part of transport costs. It also involves many manual operations in which weak links in the chain may easily be bribed by organised crime. This is the reason why maritime transport is a popular way of transporting drugs, for example.
But with blockchain technology, all the parties involved in European ports can not only work faster, smarter and more efficiently, but also much more securely, thanks to a less fraud-sensitive digital signal.