Ralph Witvoet

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Today I want to talk to you about the effects that smart contracts will have on the shipping industry. Did you know that one of Maersk’s largest vessels is longer than three football fields, with a capacity of carrying upwards to 18,000 containers? These are immense numbers and it is key to unload the ship quickly so the goods and the ship can go on its way. However, if you have been to the port of Rotterdam, you can see lines of trucks waiting for cargo. This is because the shipping industry faces a big problem that crushes efficiency. This is because the industry still relies on offline, paper-based processes. This gives immense administrative costs and inhibits companies to see the status of their goods. Smart contracts can be used to transform this industry, increasing efficiency, cut down time and majorly impacting administrative costs.

MARSEILLE MAERSK, Container Ship - Scheepsdetails en huidige positie - IMO 9778844 MMSI 219854000 - VesselFinder

However, let me first give an definition for smart contracts. Smart contracts are stored on a blockchain and they are simply said programs that will automatically run if predetermined conditions are met. Part of these programs can be wiring funds or sending notifications and the blockchain is then updated when the transaction is complete. This can all happen without intermediaries and one of blockchains characteristics is that transactions cannot be changed. It is used for security (it is encrypted), transparency (all records are shared with the participants); cut costs (no intermediaries) and speed (immediate execution).

Maritime shipping accounts for about 90% of global trade and due to falling freight prices, there is a pressure to cut down costs and increase efficiency. This lack of efficiency mainly stems from the many different parties that are involved in the shipments. You have the ship company, freight forwarders (handles movement of goods); customers; trucking companies; warehousing etc. All these actions are arranged in paper-based processes, so shippers need thousands of papers with information, contracts, checklists etc. This method takes a long time and is also error-prone. Papers get lost and checks can be filled in wrong, taking a long time for respective parties to receive pay. Additionally, the cost of maritime fraud is estimated to be $600 Billion a year.

The aforementioned is where smart contracts can help. Smart contracts provide transparency. It is online, so companies can receive immediate updates, for example, when a truck leaves the port. Also, blockchain cannot be changed, so the transactions are stored easily and safely. The automatic execution of smart contracts allow, for example, to be immediately paid when a certain action is done (e.g. unloading). All in all, it can have a major impact.

However, some of the challenges are that a whole digital system needs to be built on blockchain, which is an immense, costly process. Furthermore, all the parties need to agree and cooperate to make this work, which can be especially challenging for getting authorities on board. It requires trust.

So what do you think, are smart contracts the solution to this problem and do you actually see it being standard practice within the next 10 years?

References:

https://www.ibm.com/nl-en/topics/smart-contracts

Lal, R. & Johnson, S. (2018). Maersk: Betting on Blockchain. Harvard Business school

https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.vesselfinder.com%2Fnl%2Fvessels%2FMARSEILLE-MAERSK-IMO-9778844-MMSI-219854000&psig=AOvVaw0Q20aE1p025HYiYrmcZKb8&ust=1633725201059000&source=images&cd=vfe&ved=0CAsQjRxqFwoTCKjC9-OSufMCFQAAAAAdAAAAABAI

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By Ralph Witvoet 464927

Until last Saturday, my only experience with the application of Virtual Reality is depicted below. My farther came home from work and told me about an experience he had where he was given some sort of glasses and could walk over a plank. He shared with me how life-like he found it to be. This was very cool for me to hear, but to me, VR was an overhyped technology with countless of years to come before having any impact in the entertainment industry and I did not think this emerging technology could have an effect on how we work.

Watch: Richie's Plank Experience With Oculus Quest Hand Tracking

However, as my first sentence suggests, something changed. Last Saturday, some of my friends tricked me into going to a VR game centre in Rotterdam. Here I would fight off zombies using VR gear. I had little to none expectations, yet I was blown away. We had to put in our height and then we were given the VR glasses and guns and the game started. I could see my friends in our corresponding heights, I could see my gun and I was completely emerged in the world around me. It was so engaging and life-like that I ended up with terror-sweats. This completely changed my opinion about the state of development of the technology and I started to investigate VR.

VR impacting the Entertainment Industry

VR has long been evolved from a cool gimmick shown on business congresses. Now it is impacting various aspects of the entertainment industry (I am also including the cultural sector in this definition). An example of this is the establishment of VR leisure centres, which are entertainment centres purely built for VR games. Such centres have been founded in the last few years and are growing rapidly due to their success. However, VR is also impacting other types of entertainment. There are VR applications in theatres that help audiences immerse in virtual plays. Additionally, VR music concerts exists where VR lets you get in the skin of a music performer. There are VR experience centres on fair grounds and, moreover, VR theme parks exists. A picture of the aforementioned is depicted below.

Lastly, Museums have adopted VR practices to engage with audiences. VR lets audiences experience paintings on a whole new level, for example, by letting people see them up and close in solitude, showing the layers of which the painting is made up. It increases accessibility and makes exhibits come to life. Examples of museums using VR are The Louvre, the Peterson Automotive Museum and the Smithsonian.

VR is simultaneously creating different customer needs and fulfilling them. For the future, VR’s lifelike characteristics will increase creating a more seamless connection between movement and what is happening in the virtual world. Additionally, the shape of this virtual world will get better and better and it will become easier to have VR applications at home such as the Playstation VR there is now.

VR impacting working life

However, VR has impacted working life and will impact working life in the years to come in a substantial way that I did not realise.

On the one hand, VR technology has sparked the creation of virtual worlds, which businesses have adopted widely. By making use of 360° camera’s, business can create this virtual worlds, allowing customers to see, for example, how a restaurant looks from the inside, or in real estate how homes look. This creates value by giving customers more feel of the property.

On the other hand, actual VR glasses in business conducts show customers the end product. This application starts to emerge mainly in the construction industry, where architects and project developers show their vision. Customers can immediately see how the end-product will come to see.

What is also happening now on a small scale, is the use of VR in working remotely. In some companies, workers with special camera’s make recordings of products, e.g., a broken train, and then engineers with a VR glass, can see from home the problem and create the solution in this virtual world. The employees on sight can then follow these instructions, repairing the product. I think that this application will continue to evolve, impacting telecommuting and for example creating real-time virtual worlds, so experts all over the world can immediately come up with solutions to problems.

To conclude, I believe that the emerging VR technology will continue to develop, serving new customer needs and adding value to existing industries, such as the entertainment industry and the wider working industry like construction.

Sources:

Picture 1: https://uploadvr.com/richies-plank-quest-hand-tracking/

Picture 2: https://filmora.wondershare.com/virtual-reality/virtual-reality-use-in-entertainment.html