On Maritime Digitalization in Emerging Environments

*Sanja Bauk*

### **Abstract**

The purpose of this chapter is to propose a conceptual framework for implementation of advance info-communication technology and systems (ICT&S) across maritime cluster in emerging environments, with emphasis on some South-East European countries and South Africa. Smart implementation and adoption of the ICT&S in shipping and port management have been considered due to the Holtham's & Courtney's model (2010). Furthermore, particular attention is given to Blockchainbased Maritime Supply Chain System (BMSCS) conceptual model, which includes distributed relational database, smart contracts, and crypto-currency payment mechanism as main constructs. The document workflow management, financial processes, and device connectivity are considered as key scenarios in the blockchain model. The stakeholders, who play the role of traditional intermediaries in the goods and accompanied documents and data flows, including overall supervision of the processes between end nodes, that is, shippers and customers, are encompassed within the BMSCS scheme. Some strengthens and frailty of BMSCS are highlighted, along with the suggestions for further investigation in this field, with the aim of better understanding prospective benefits and challenges of blockchain more extensive deployment across maritime sector in the future, with emphasize on developing environments.

**Keywords:** maritime, digitalization, emerging economies, conceptual framework

### **1. Introduction**

Maritime is an important industry. Over 80% of the total transport of all goods takes place by sea because it is the most economical and most massive mode of transport. The world's seas provide free waterways. These are the largest absorbers of carbon dioxide and the largest producers of oxygen. The seas are the main source of food for one-third of the world's population. Oil and diamonds, e.g., are extracted from the seabed. However, the seas are exposed to pollution caused by both natural disasters and human factors. Another paradox related to the seas is that the maritime industry lags significantly behind other industries in terms of digitalization. Some facts that support this statement are as follows: a large number of ships do not comply with the requirements of the Safety of Life at Sea (SOLAS) Convention. Some ships do not have modern electronic navigation aids such as Electronic Chart Display and Information System (ECDIS) nor (Satellite) Automatic Identification System ((S)

AIS), for instance. Analyzes of accidents at sea have shown that the crew sometimes is not familiar with these devices. Digitization at land is more developed than at sea, and the main reason for this is the lack of profound investigation of Internet connectivity at sea, which can be hampered by sea surface movements, wave occlusions, rough weather, poor coverage, etc. Consequently, inter-organizational information systems (IOS) are used 75% in hinterland and only 25% in maritime. Internet of Things (IoT) is used considerably less at sea than at land. In road and rail transport, it is possible to track cargo at the level of a single unit or a container, while in maritime transport this is still not possible. As an example, we can use transport of dangerous goods. The casks (drums) with radioactive waste (plutonium, e.g.) can be tracked by Radio Frequency Identification (RFID) chips, Internet connection, and security backend web applications at the level of a single freight unit or a drum in the road and in rail transportation [1, 2], but not in maritime [3]. Furthermore, there are a large number of autonomous vehicles on roads (about 1.5 thousand) and in the air, i.e., drones (about 1.5 million), but only one autonomous ship (Yara), and another one is currently under construction [4]. Blockchain technology is not widely accepted yet, since there are various impediments like the lack of trust between stakeholders; government support; legislation; standards; along with the stakeholders' readiness for risky investments in emerging technology. Some extensive desktop studies of academic writings shown that a very small percentage of articles deal with advanced info-communication concepts such as big data, virtual intelligence, robotics, 3D, virtual reality, digital security, etc., in maritime. There is no clear political strategy for further development of info-communication systems in maritime. This complicates maritime digitization in developed countries, and considerably more in developing ones. Concerning the latest, this chapter is organized in the following manner: Section 2 deals with smart adoption of advanced ICT&S in general, and in maritime business. Additionally, a case study has been conducted in several non-EU and EU countries in this respect, based on the Holtham's & Courtney's model. Section 3 considers rational blockchain adoption in maritime, with a focus on developing environments, concerning BMSCS, TradeLens, smart contracts, and Blockshipping. This section also encompasses a case study on blockchain smart adoption in maritime business in emerging economies, with emphasis on South Africa and Montenegro, while Section 4 gives some concluding remarks.
