Interview

“The only ones to seize the chance”

The key document in ocean freight, the Bill of Lading, is still produced on paper. High time now for a digital variant using blockchain technology that will result in greater efficiency and security! This is the vision pursued by the HAPTIK project. In the thick of it: digitization pro Dieter Sellner from DB Schenker

Dieter Sellner (53) is the Project Manager Global Digital Solutions for Schenker AG in Frankfurt. In addition to HAPTIK, he also heads the connect 4.0 project that DB Schenker uses to allow customers to make bookings online. Photo: DB Schenker

Mr. Sellner, what is the process for dealing with the Bill of Lading (B/L) in the year 2020?

Basically in the same way it was done a hundred years ago. This is how far back the procedure goes, and it applies worldwide, with some variations. The B/L serves as proof that a consignment of goods has been taken possession of by a carrier, and it documents the carrier’s obligation to deliver the consignment to its destination and hand it over to the recipient. It also serves as proof of ownership. So yes indeed, the B/L still passes through the hands of the parties involved in the transport chain in paper form, to this day. The only difference between 1920 and 2020 is


that today the B/L can be printed out in color. That’s an anachronism!

 

What are you doing differently then – and who are the parties involved in HAPTIK?

We are working on creating a platform that is based on blockchain technology that will make it possible to generate and then trade in digital tokens. These tokens will serve as an electronic form of the B/L, and they will replace the paper-based B/L in its entirety. The participant alongside DB Schenker is the University of Oldenburg and its computer scientists and software developers and, most importantly, the maritime law experts from the Interdisciplinary Centre for Law of the Information Society, which is in charge of the project. I say most importantly because the issues we deal with are primarily of a legal nature. The central question is how to design the platform so that it is capable of digitizing these ancient procedures in a manner that ensures legal certainty.

 

What will be the advantages of the digital tokens?

First of all, they will result in an enormous gain in efficiency. This is because the digital B/L will eliminate the previously mandatory time-consuming checking of the paper-based B/L by the participants in the transport chain. In concrete terms, this means for example that containers can be released more quickly at the port of destination. It also means that the relevant data only needs to be recorded once. This prevents mistakes being made. The procedure will also ensure greater transparency: each of the participants will be able to access the specific information that is relevant to them, as well as the complete data history, at any time.

 

This should also improve data security, should it not?

Precisely. Because once the data has been entered, it cannot be changed unnoticed. This is because the process sequence of the data remains saved and visible to all the parties involved – and that makes forgery impossible. In this way we can prevent someone along the supply chain surreptitiously making a pallet disappear or, vice versa, slip in an additional pallet containing counterfeit goods, and then concealing their action by manipulating the printed B/L. The token does not allow this kind of manipulation because, to stay with our example, it contains the unalterable record of the correct number of pallets, and this record can only be changed with the approval of the requisite parties.

Speeding up processes: the digized Bill of Lading is supposed to guarantee a quicker release of containers at the port of destination and increase both transparency and security along the supply chain. Photo: Courtesy of the Port of Los Angeles

In what way does HAPTIK go beyond earlier initiatives to digitize B/Ls?

There have been attempts by platform operators using traditional IT technology. Those procedures were complex and time-consuming. However, in our opinion they failed because they provided for the relevant data to be stored by these very operators. This was something many parties involved, including logistics operators, did not want to sign up to. Our solution is different. The HAPTIK platform is neutral: we will only be one user among many. Using the blockchain technology, data is stored in a decentralized manner – and is extremely heavily encrypted. Just like any other user, we can only access the data that we need in order to handle our transport runs.

 

Aren’t there other projects currently under way that are in fact based on blockchain technology, too?

Yes, there are. But our method is distinguished by the fact that, as of today, it is the only one capable of digitizing the B/L 100 percent. The decisive issue where we are in the lead is that our token can serve as proof of ownership. German law is the only legal system in the world that permits a 100-percent digitization of the B/L. We are the only ones to have recognized and seized this chance and to have implemented the legal requirements in software. This means that the tokens comply with German law – and yet can be used anywhere in the world. This is because the participants in the transport chain are free to agree on the application of any national maritime law of their choice.

 

Could the tokens also work outside ocean freight? And especially: when will they become available?

The procedure is in principle transferable to other modes of transportation. We made a start with ocean freight, however, as this is where the optimization potential is greatest, because the existing procedure is so ancient, and also with regard to the legal framework conditions. As for the timeline: the German Ministry of Economics is funding HAPTIK in order to make Germany and Europe future-proof as a business location, and the project will run until the end of next year. We aim to be ready by then. In fact, I am already engaged in talks with prospective customers.

 

If you are interested in becoming an early adopter of this new technology, please don’t hesitate to get in touch with Dieter Sellner at Dieter.Sellner@dbschenker.com

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