Perth-based start-up rise-x says its QuayChain platform, which uses artificial intelligence, IoT, and blockchain technology, has the potential to increase transparency and traceability throughout the whole bunker-buying process. ship.energy speaks to Founder and Director Rowan Fenn to find out more.
‘There’s no good example of a single source of truth,’ says Rowan Fenn, Founder and Director of Rise-X. ‘We’ve tried to create a common source of truth, so everyone’s got the same information.’
This common source of truth, says Fenn, will be driven by automation through existing and emerging technologies which will in turn help to deliver transparency to a bunker industry which is undergoing profound change. On the surface, the most notable change will be an increasing diversification of marine fuels to meet environmental targets, but there will also be an evolution in how these fuel contracts are sold, bought, delivered, and settled. Perth-based start-up rise-x has developed a cloud-based platform, QuayChain, which, according to Fenn, will not only increase fairness but also reduce risk and raise standards throughout the bunker-buying process.
‘Fundamentally, what we were interested in was building a system to track and manage the hydro-carbon custody and title transfer from the terminal to the barge and then from the barge to the ship, and then to try and build a system that was automatic,’ he says.
The scope of the system goes from enquiry all the way through to settlement and is also a multi-party system.
‘Lots of different stakeholders who participate in the transaction can all work in a common digital space – a workflow – using a common information record. People used to call that single source of truth, but I don’t think there is anymore.’
From a technology perspective, rise-x arrived at blockchain being an enabler. The company has at its disposal ‘a very deep stack’ of technology, including Internet of Things (IOT), machine learning and artificial intelligence. Based in the cloud, there is also an element of edge computing in some of the use cases while in the back end of the system the platform uses blockchain.
‘The blockchain genuinely does add value to these multiparty transactions,’ says Fenn. ‘We use it for governance so that blockchain and the smart contracts control who can do what in the system and when they can do it. We use it for track and trace – to record who did what when and why as that transaction unfolds…and then we use it for automation. For example, at the moment of enquiry, at the point of delivery or at the point of settlement.’
Fenn continues: ‘Ultimately, we just want to try and automate that process of ordering bunkers in the market. We can track a ship if we know how much fuel is onboard that vessel, we can get a pretty good approximation of how much fuel it is burning and where it is burning it. We also know – if the captain allows us to – the next port of destination and potentially two or three ports after that.’
The technology allows rise-x’s QuayChain platform to run a real time, ongoing calculation to try to optimise how much fuel should be bought, in which port it should be purchased and which product should be bought – and of course at what price.
‘We only really need to lock that contract in 24 hours before arrival, just in time,’ explains Fenn.
rise-x intends to conduct a pilot project in the world’s largest bunker port, Singapore, in the first half of 2021. This, says Fenn, is an ideal market to be working in. In 2017, the Maritime and Port Authority of Singapore (MPA) made the use of mass flow meters mandatory for all marine fuel oil deliveries, and this was followed in 2019 by a similar mandate for distillate deliveries.
‘Some of those mass flow meters are IOT enabled,’ says Fenn. ‘You can take the custody data directly from the meter and so you can actually produce an electronic BDN [bunker delivery note] and all the other documentation online using the data directly from the IOT meter. This allows us to automate the custody transfer because whatever the meter says goes. It also eliminates a bit of redundancy because the independent observer becomes the mass flow meter – or the device – and also prevents any opportunities for revenue loss, side deals or fraud that might happen at the operational level.’
As the bunker operation progresses, the Quaychain platform is also able to obtain information on the quality of marine fuel that is being delivered.
‘Once an independent lab tests a sample and provides the results to the platform, then we have both the custody data and the quality results and there’s nothing stopping us from passing that to the trade finance provider to then automate the back-office part of that process,’ says Fenn.
Of course, such technology, which aims to handle data from a range of industry stakeholders, will not be immune from threats of cyberattacks. Indeed, some of the shipping industry’s biggest names have fallen prey to such attacks in recent months. So, what measures has the company taken to sure up its platform?
‘From a cybersecurity perspective, there are several elements,’ says Fenn. ‘We’re born in the cloud, so we’re working on cutting edge infrastructure which is being managed by companies like Amazon and in our instance Microsoft, and so you have all the protections afforded to that infrastructure by those larger entities. You do not have the same types of risks that are present if you have an older legacy infrastructure on premise, for instance when you are managing your own servers or if you have licensed software on your machine.
‘The second aspect is that the architecture of the system is decentralised…by using blockchain – it’s a disintermediated thing – which in its simplest sense means that none of the data is stored together in a single place. The incentive to hack something falls away because the effort to penetrate these records goes up and the payoff goes down because you are only going to get a partial piece of a record.
‘The third element to it is an authentication process and mechanism for track and trace that is brought to platform by the blockchain…and in that sense it’s a very secure mechanism. It is not infallible to being penetrated…but it records the event and makes it transparent so that everyone can see it. The term people use is “tamper evident”.’
While not the first company to introduce digitalisation to the bunker buying process, Fenn believes that in Quaychain, rise-x has built a platform that meets the needs of industry stakeholders across the board. The next challenge will be getting it to market.
‘There is some development to go and at the moment we are in the process of trying to commercialise this product – the company is not a pre-revenue company but as a product [QuayChain] is at an R&D phase,’ says Fenn. ‘Part of our strategy for commercialising this product is partnering. We’re a small team based in Perth and the barriers are high and what we are trying to find is a commercial operator that has bunkering infrastructure; and that supplies, purchases or delivers bunker fuel because they can be early adopters of the system.’