International Transportation | Collection 2021 25 Blockchain technology in-inland navigation Acceleration of transport handling processes via Blockchain technology Inland navigation, Blockchain, Communication Up to now, companies in inland navigation have mostly used conventional methods and means (telephone, email, post) to transmit information and documents. This leads to delays in the processes of all companies involved. Therefore, in order to make communication in inland navigation more efficient, it seems appropriate to reduce the number of media breaks within the communication channels between all parties involved, while ensuring the integrity of information and documents. Thomas Decker B lockchain technology has now become a reliable means of maintaining data integrity through data encryption and data validation between its network participants, so it could also speed up transport settlement processes in inland navigation and make them more secure. An anonymous 2020 online survey therefore first collected information on communication channels, background knowledge of blockchain technology, and turnaround and waiting times in current transport settlement processes. The data was then analyzed and integrated into both a basic model and a blockchain-based model of a transportation settlement process. Finally, a simulation program compared process advantages and disadvantages between the two transport handling processes. Research Question The basic model used was the transport handling process of a spot transaction in the dry bulk sector of inland shipping, as this hardly differs from one another in its basic form, even in the case of specific customer requirements, and is therefore most suitable. Geographical restrictions, technical homogeneities of inland vessels in terms of cargo space as well as loading and unloading Photo: Michael Gaida / pixabay Communication PRODUCTS & SOLUTIONS International Transportation | Collection 2021 26 PRODUCTS & SOLUTIONS Communication possibilities also suggest largely identical basic process forms among the companies involved, so that a transfer of the results to other sectors is also possible. The research question was therefore: Can blockchain technology reliably and securely accelerate the transport processing of an inland waterway transport? Methodology Based on a quantitative research method, the target group of the survey consisted exclusively of chartering companies and shipping companies. In this perspective, chartering companies work exclusively with foreign inland vessels and shipping companies additionally with inland vessels of their own fleet. However, both types of operation are engaged in chartering activities and are therefore included in the survey. The formulation of the questions aimed at the actual state of a classical transport handling process in inland navigation. The main subject of the questions was information about communication means and times. Secondary insight objectives were information about the level of awareness of blockchain technology in general and in inland navigation in particular. The survey was conducted via the platform “umfrageonline.com” and sent to the email business addresses of the target group together with a cover letter including an internet link. Before publication, the questionnaire was subjected to a pretest, and the survey itself took place from February 1 to 29, 2020. The questionnaire was sent to 100 recipients, and the response rate was 14 %. Blockchain Genesis, Integration, Smart Contracts Roughly simplified, the blockchain is a continuously growing chain of transactions grouped in blocks that are integrated to form a network. Due to delays in the network, different data sets with different tophash values could now be retrieved [1]. However, asynchronous blocks are generally rejected by the network from so-called miners, so that it is continuously guaranteed that the entire network has the same data status, thus data consistency is guaranteed and trust can be generated by this consensus mechanism [2]. In addition to the well-known Bitcoin network, other blockchain-based networks now exist, for example Ethereum [3]. Ethereum has, beyond the classical transaction function, another function for the automatic execution of programs with their own address, so-called “Smart Contracts”. If the defined transaction is received by the smart contract, the code of the program is executed [4]. This opens up numerous fields of application, for example in invoicing. It can be assumed that smart contracts could also be applied in inland navigation. The prerequisite for establishing a network in inland navigation would be that the entire transaction takes place via a private and permission-based blockchain system, that all parties have access, and that each party has been assigned a key pair or ID. Using this ID, all documents would then be signed by the respective creator. Simulation of a blockchain-based process model At the beginning, the shipper creates the order data. For this purpose, the system generates a common order ID that can be retrieved by all parties involved. If contracts have also been created, these are transferred to the application’s document management system (DMS). Here, only the party to whom the respective documents have been addressed then has access. As soon as loading is complete, the loading point creates the loading certificate and sends it to the DMS. This document is then visible to all parties, eliminating the need for further and additional information retrievals on loading status and loading certificate data, etc. Since the charterer now no longer has to wait for the receipt of a loading confirmation, he can check it immediately, create invoices or even credit notes if the loading times should be exceeded. Finally, the unloading day has the identical procedure as the loading day. The unloading point creates the unloading certificate and loads it into the DMS, visible to all parties involved. Finally, the shipper checks and creates invoices or credit notes in the event that unloading times are exceeded [5]. Parameter and process input data As a reference for a monthly time frame, the average working days 2020 (NRW) were taken as 21.17, rounded down to 21 days for an integer simulation period. Additionally, the process was limited to a single execution per day [6]. The probabilities at the XOR operators deciding on the loading and unloading status Function Funktion Average processing time Average waiting time Create order data Auftragsdaten erstellen 10 Min. - Create contract conclusions Vertragsabschlüsse erstellen 2 Min. - Send contract conclusions Vertragsabschlüsse versenden 2 Min. - Contact contractor Auftragnehmer kontaktieren 1,158 Std. - Request transshipment status Umschlagstatus erfragen 1,6 Min. - Retrieve loading weight Ladegewicht abrufen 1,6 Min. - Inform client Auftraggeber informieren 3,2 Min. - Create outgoing invoice Ausgangsrechnung erstellen 10 Min. - Send outgoing invoice Ausgangsrechnung versenden 2 Min. - Create outgoing credit note Ausgangsgutschrift erstellen 10 Min. - Send outgoing credit note Ausgangsgutschrift versenden 2 Min. - Receive loading certificate Ladebescheinigung empfangen - 12 days Receive unloading certificate Entladebescheinigung empfangen - 12 days Check loading certificate Ladebescheinigung prüfen 2 Min. - Check unloading certificate Entladebescheinigung prüfen 2 Min. - Create demurrage bill Liegegeldrechnung erstellen 10 Min. - Create demurrage credit note Liegegeldgutschrift erstellen 10 Min. - Send documents Dokumente versenden 2 Min. - File Akte ablegen 1 Min. - Table 1: Process input data of the basic model International Transportation | Collection 2021 27 Communication PRODUCTS & SOLUTIONS at the time of query were set to a range of 0.6 to 0.4, according to an estimate by the charterers, i.e., with a probability of 60 %, loading or unloading is already completed at the time of a status query. Variables for a handling delay such as crane failure or insufficient loading personnel were not considered. Frequencies for violations of loading and unloading times were set at a flat rate of 0.5 to 0.5. The OR-operators deciding on the preparation of demurrage invoices were assigned a probability of 0.7 to 0.3, i.e. with a probability of 70 % the charterer sends a demurrage invoice to the customer, who, however, only has to pay for it with a probability of 30 %. The reason for this are freely negotiable demurrage arrangements, which are handled in such a way that the contractor is granted a longer period than the customer, so that the charterer can derive a monetary benefit from these agreements. The process input data of the basic model is shown in table 1, according to which, for example, 10 minutes each were specified for creating order data and invoices. Contacting the contractor was set at 1.158 hours by evaluating the survey (“Average time to receive load weight”). Since inquiries about the handling status and the loading weight usually occur in the same telephone call, 1.6 minutes each were set for this as a halving of the average call duration. The average waiting time for the receipt of loading and unloading certificates was 12 days: The process input data of the blockchain-based model is shown in table 2. It can be seen that the quantity of functions is reduced compared to the basic model. However, since not all times change here due to unchanging activities, the only change to be noted here is the change in the receipt times for the loading and unloading certificate, since these are reduced to 10 minutes due to the transfer to the document management system (DMS). This time was chosen based on the block creation time in the Bitcoin blockchain and corresponds to the time until confirmation by the so-called miners: Finally, a simulation is carried out using the modeled process chains and the collected data. For this purpose, the functions of so-called event-driven process chains (EPC) in the program ARIS Architect & Designer 10.0 are assigned attributes from the survey data [7, 8]. Legend to figures 1 & 2 1. Create demurrage credit 2. Receive loading certificate 3. Send outgoing invoice 4. Create demurrage invoice 5. File 6. Receive unloading certificate 7. Check unloading certificate 8. Request transshipment status 9. Send outgoing credit note 10. Send documents 11. Contact contractor 12. Create outgoing invoice 13. Inform client 14. Check loading certificate 15. Contact contractor 16. Create order data 17. Create outgoing credit note 18. Create contract 19. Retrieve loading weight 20. Send contract conclusions Figure 1: Sum of the static lying or waiting time in the basic model Function Funktion Average processing time Average waiting time Create order data Auftragsdaten erstellen 10 Min. - Create contract conclusions Vertragsabschlüsse erstellen 2 Min. - Send contract conclusions Vertragsabschlüsse versenden 2 Min. - Create outgoing invoice Ausgangsrechnung erstellen 10 Min. - Send outgoing invoice Ausgangsrechnung versenden 2 Min. - Create A/ R Credit Memo Ausgangsgutschrift erstellen 10 Min. - Send outgoing credit note Ausgangsgutschrift versenden 2 Min. - Receive loading certificate Ladebescheinigung empfangen - 10 Min. Receive unloading certificate Entladebescheinigung empfangen - 10 Min. Check loading certificate Ladebescheinigung prüfen 2 Min. - Check unloading certificate Entladebescheinigunng prüfen 2 Min. - Create demurrage bill Liegegeldrechnung erstellen 10 Min. - Create demurrage credit note Liegegeldgutschrift erstellen 10 Min. - Send documents Dokumente versenden 2 Min. - File Akte ablegen 1 Min. - Table 2: Process input data of the blockchain-based model Figure 2: Sum of processing times in the basic model International Transportation | Collection 2021 28 PRODUCTS & SOLUTIONS Communication Simulation results in the basic model Table 3 shows the simulation results in the basic model and documents how often the respective function was actually activated based on its links and probabilities during the simulation period or how often it was actually processed based on its processing or waiting time. It is noticeable that the functions “Receive loading/ unloading certificate” show high waiting times, which inevitably leads to processing jams. In the period of 21 days, these were activated 21 times in a daily execution, but only 9 of the 21 certificates reached the charterer. As a result, 12 certificates did not reach the charterer, which meant that the overall process could not be completed in these cases. In total, the waiting times of these functions took 4222 hours, 42 minutes and 19 seconds, i.e. around 176 days (see figure 1). The processing times of all functions add up to 111 hours, 15 minutes and 14 seconds, with the “Contact Contractor” functions taking the highest absolute proportions of around 49 and around 40 hours respectively (cf. figure-2). These fluctuations are due to the long response times of the contractors during loading and unloading. It can therefore be seen that waiting times for loading and unloading documents and contacting the contractor cause significant bottlenecks in the process flow. Simulation results in the blockchain-based model Table 4 shows the simulation results in the blockchain-based model and conspicuously documents that all functions could be processed in the simulation period. This is mainly due to drastically reduced waiting times for the loading and unloading certificates by eliminating the contact loops in the query of the handling status as well as the information of the principal, to only about three and a half hours. It is also noticeable that the number of demurrage statements to the client and customer has increased. The total processing time in the simulation period is now only 19 hours and 39 minutes, which corresponds to a total reduction of 82.34 %, or even 99.92 % in terms of waiting time alone. Results analysis and conclusion The general part of the survey investigated whether the participants were familiar with the terms “Bitcoin” and “Blockchain”. While 92.2 % stated that they were familiar with bitcoin, only 71.43 % affirmed this for blockchain technology. 28.57 % said they were not familiar with blockchain technology. This shows that while the media presence of Bitcoin has led to increased awareness of cryptocoins, it has not done so in the same way for the underlying technology. Other general questions were related to communication tools used in the transportation settlement process. 57.14 % responded that they primarily use email, while 42.86 % primarily use the telephone. The transport status to the client is transmitted by 71.4 % via e-mail, 21.43 % call the client via telephone and 7.1 % use online customer portals. Legend to figures 3 & 4 1. Create demurrage credit note 2. Create order data 3. Create outgoing invoice 4. Create demurrage invoice 5. File 6. Send documents 7. Send outgoing invoice 8. Receive unloading certificate 9. Create contract 10. Receive loading certificate 11. Send outgoing credit note 12. Send contract conclusions 13. Check loading certificate 14. Create outgoing credit note 15. Check unloading certificate Figure 3: Sum of static demurrage or waiting time in the blockchainbased model Figure 4: Sum of processing times in the blockchain-based model Function cf. fig. 1 / fig. 2. Activated Edited Create demurrage credit Liegegeldgutschrift erstellen 2 2 Receive loading certificate Ladebescheinigung empfangen 21 9 Send outgoing invoice Ausgangsrechnung versenden 21 21 Create demurrage invoice Liegegeldrechnung erstellen 8 8 File Akte ablegen 9 9 Receive unloading certificate Entladebescheinigung empfangen 21 9 Check unloading certificate Entladebescheinigung prüfen 9 9 Request transshipment status Umschlagstatus erfragen 78 78 Send outgoing credit note Ausgangsgutschrift versenden 21 21 Send documents Dokumente versenden 10 10 Contact contractor Auftragnehmer kontaktieren 43 43 Create outgoing invoice Ausgangsrechnung erstellen 21 21 Inform client Auftraggeber informieren 42 42 Check loading certificate Ladebescheinigung prüfen 9 9 Contact contractor Auftragnehmer kontaktieren 35 35 Create order data Auftragsdaten erstellen 21 21 Create outgoing credit note Ausgangsgutschrift erstellen 21 21 Create contract Vertragsabschlüsse erstellen 21 21 Retrieve loading weight Ladegewicht abrufen 21 21 Send contract conclusions Vertragsabschlüsse versenden 21 21 Table 3: Simulation results in the basic model International Transportation | Collection 2021 29 Communication PRODUCTS & SOLUTIONS To send invoices and credit notes, 57.1 % use e-mail and 42.9 % use the postal service. Transport documents are actually sent by e-mail by 100 % of the participants surveyed. The question about the duration of communication times resulted in an average of 3.2 minutes (n =v5). In this context, the charterer and the client tried to contact each other an average of 1.31 times on the day of loading to retrieve the loading weight (n = 13). It then took an average of 1.15 hours for the charterer to learn the loading weight (n = 13). Finally, the charterer attempted 1.15 times per day to retrieve the information about the successful unloading of the vessel from the contractor on the unloading day (n = 13). It should be noted that blockchain technology is an expedient means of speeding up the transportation settlement processes in inland navigation. Sending documents via e-mail works just as quickly, but does not guarantee data integrity. In addition, irritations regularly arise regarding the receipt of email documents. This leads to waiting times and hinders the handling process at the charterer. The simulation results show that processing and waiting times can be reduced by a blockchain-based application system. Data traffic between the parties would be harmonized, and the handling of processes would be simplified and accelerated. One criticism, however, is that the applicability of this system requires the integration of all parties involved. If the idea were taken further, other companies from the retail and logistics sectors could join, although such a private, permission-free blockchain application system is likely to lead to a monopoly position for the provider in the medium term. However, if such databases were organized on a “semi-governmental” basis, similar to the non-discriminatory, though not yet blockchain-based, databases of, for example, the chambers of agriculture (e.g., NRW; control and tracking of manure disposal routes [9]), blockchain technology could significantly simplify and accelerate transport handling processes in inland navigation. It remains to be seen whether, despite the lip service paid to the digital transformation of inter-company supply chain processes, greater transparency among privatesector players - which makes economic sense - would be feasible at all, especially among larger shipping companies. And if, for example, a participant were to be able to/ must display its position and data in a list that can be viewed by the charterer’s client, the position of the charterer, who defines himself through his contacts and his network of participants, would most likely become obsolete. This would mean that the relevant intermediaries in this industry would be swept away, even wiped out, just as is already happening on an almost daily basis in other, more dynamic industries and sectors of the economy. ■ SOURCES [1] National Institute of Standards and Technology (2019): Hash Functions, in: https: / / csrc.nist.gov/ projects/ hash-functions (16.03.2020) [2] German Federal Office for Information Security (ed.) et al. (2019): Blockchain sicher gestalten, Konzepte, Anforderungen, Bewertungen, Bonn [3] Nakamoto, S. (2008): Bitcoin: A Peer-to-Peer Electronic Cash System, in: https: / / bitcoin.org/ bitcoin.pdf (30.12.2019) [4] Szabo, N. (1997): Formalizing and Securing Relationships on Public Networks, in: First Monday 9 (1997), http: / / firstmonday.org/ ojs/ index.php/ fm/ article/ view/ 548/ 469 (27.04.2020) [5] Decker. T.; Balting, A. (2020): Dynamisierung von Transportabwicklungsprozessen in der Binnenschifffahrt mit Hilfe der Blockchain- Technologie, HANSE Institute for Logistics & Trade Management, 68 p., Neusser Schriften, 7th Jg., Vol. (1) 2020 [6] Liebetruth, T. (2016): Prozessmanagement in Einkauf und Logistik, Instrumente und Methoden für das Supply Chain Process Management, Wiesbaden [7] Scheer, A.-W. (2002): ARIS - From Business Process to Application System, 4th, revised edition, New York [8] Seidlmeier, H. (2015): Prozessmodellierung mit ARIS®, ARIS 9, 4th, updated edition, Wiesbaden [9] Decker, T. (2014): Transport of agro goods by inland vessels to supply biomass power plants, Result report on the EUREGIO research project HARRM (Port Region Rhine-Meuse), 25 p., Neusser Schriften, 1. Jg., Vol. (1) 2014 Thomas Decker, Prof. Dr. Leiter HANSE-Institut für Logistik & Handelsmanagement, Studiengangleiter Logistik & Supply Chain Management, Professur für Transport- und Verkehrslogistik, Rheinische Fachhochschule Köln gGmbH, Neuss (DE) thomas.decker@rfh-koeln.de Function cf. fig. 3 / fig. 4 Activated Edited Create demurrage credit note Liegegeldgutschrift erstellen 4 4 Create order data Auftragsdaten erstellen 21 21 Create outgoing invoice Ausgangsrechnung erstellen 21 21 Create demurrage invoice Liegegeldrechnung erstellen 19 19 File Akte ablegen 21 21 Send documents Dokumente versenden 23 23 Send outgoing invoice Ausgangsrechnung versenden 21 21 Receive unloading certificate Entladebescheinigung empfangen 21 21 Create contract Vertragsabschlüsse erstellen 21 21 Receive loading certificate Ladebescheinigung empfangen 21 21 Send outgoing credit note Ausgangsgutschrift versenden 21 21 Send contract conclusions Vertragsabschlüsse versenden 21 21 Check loading certificate Ladebescheinigung prüfen 21 21 Create outgoing credit note Ausgangsgutschrift erstellen 21 21 Check unloading certificate Entladebescheinigung prüfen 21 21 Table 4: Simulation results in the blockchain-based model Trialog Publishers Verlagsgesellschaft | Schliffkopfstrasse 22 | D-72270 Baiersbronn Tel.: +49 7449 91386.36 | Fax: +49 7449 91386.37 | office@trialog.de | www.trialog-publishers.de Let’s keep in touch editorsdesk@international-transportation.com advertising@international-transportation.com