Skip to main content

Secure and Transparent Cargo Supply Chain Larry Shi, Ph.D., University of Houston


Synopsis: The project addresses the need of maritime supply chain transparency; improve supply chain security, prevent cargo fraud/theft, and strengthen resilience against cyber exploits/insider threats through secure chain-of-custody. It leverages the recent advance of blockchain as a tool to achieve its goal and implement supply chain best practices recommended by the stakeholder community.

Needs: International trade has been and continues to be a powerful engine of United States and glob-al economic growth. To secure US’s economic prosperity and protect the welfare and interests of the Ameri-can people, it is necessary to strengthen the global supply chain. As a critical part of the global trade, the maritime supply chain is a complex system involving multiple parties (e.g., owners, buyers, sellers, shippers, carriers, port authorities, different logistic parties, and insurance companies). Because the number of parties involved is large, sometimes, more than 20 for shipping goods from A to B, and they are geographically dis-tributed over the world, the industry has been facing long persistent challenges in lack of transparency and visibility, which creates information silos and exposes maritime supply chain and cargo transportation to po-tential frauds (defraud shippers and carriers at multiple points of supply chain), thefts (e.g., fictitious pickup of cargos), and risks of smuggling illegal goods (e.g., ghost containers). Exposure to cyber attacks and insider threats also increases as the industry (shippers, carriers, logistics providers, and freight forwarders) with the growing reliance on IT and electronic trading platforms. A recent study by CyberKeel mapped the flow of usu-al information exchanges from the point of booking a container until delivery at the endpoint. The mapping showed more than 50 possible attack points against which a cyber attack could be targeted. Often, penetra-tion at 1-2 such points would be sufficient to allow or facilitate unauthorized movement of goods and cargo.

Approach: We leverage the unique characteristics of blockchain, which is proven to be effective, ro-bust and secure for managing custody of digital assets or digitalized assets, to improving the maritime supply chain information flow to support better visibility of goods (transparency); and connecting cargo to people by integrating identity management with blockchain and achieving holistic chain-of-custody in both physical world and supply chain information space. Our strategy is forge a global alliance involving stakeholders – early adopters, government agencies, academia, supply chain stakeholders, and solution providers.

Benefits: Each legitimate party involved in maritime supply chain can benefit from the system be-cause: (i) Cargo supply chain transparency and visibility are greatly improved (buyers, sellers, and logistic brokers are offered with holistic chain-of-custody during cargo transportation). (ii) Compliance documentation is made easier for C-TPAT partners and participants. (iii) No one can manipulate or alter chain-of-custody records stored in the blockchain; and government agencies (e.g., CBP) can easily audit any trade incompli-ance issues (immutable and auditable chain-of-custody).


2017 Meeting Presentation