As global manufacturing and supply chains become increasingly interconnected and complex, the safe transportation of dangerous and critical cargo has emerged as a critical issue. For industries such as electric vehicles (EVs), consumer electronics and renewable energy, the rapid rise in demand for lithium-ion (Li-ion) batteries has added new layers of complexity to the logistics of hazardous materials.

The Li-ion battery market is projected to grow over 30% annually until 2030 where it is expected to reach $400 billion. However, the very properties that make these batteries so effective including their high energy density, also make them potentially dangerous. Mishandling during transportation such as physical damage or exposure to thermal stress can trigger thermal runaway, a self-sustaining reaction that leads to intense fires, explosions and the release of toxic gases.

This challenge is further amplified by the transition to a circular economy. The demand for shipments of used and damaged batteries as black mass is set to increase. New battery regulations in Europe impose strict recovery requirements on manufacturers, mandating minimum proportions of recycled metals including lithium, in new batteries by 2030. These proportions will increase further five years later. However, used or damaged batteries have distinct risk factors and require specialised handling compared to new batteries.

The Limitations of Paper-based Approaches

One key issue is misdeclarations. When undeclared Li-ion batteries are shipped in some instance we can witness extreme fires highlighting the dangers of inaccurate or incomplete documentation. The containerised nature of modern shipping, while revolutionising global trade, limits visibility into cargo contents, exacerbating these risks. Historically, the shipping industry has relied on paper-based declarations and certifications. This leaves carriers vulnerable to misdeclarations and fraud, whilst verification is time-consuming and still leaves a lot of room for risk.

For companies, this also becomes a cumbersome process as requirements and processes vary between carriers and are time-consuming to comply with. This issue extends beyond batteries to other dangerous goods, leaving carriers hesitant to accept such cargo or forcing them to implement lengthy, complex approval processes. Resulting delays can stretch booking confirmation times by a week or more. The situation can become even more complicated with vessel-sharing agreements between carriers. In short, the paper-based approach for the declaration and certification of Li-ion battery is no longer fit for purpose in today’s environment.

The Role of Blockchain Technology

To enhance the safe handling and transportation of Li-ion batteries, trusted end-to-end data sharing and automated verification are essential. The shipping industry requires a collaborative, technology-driven infrastructure to improve transparency, accountability, and participation from verified parties.

Traditionally this has been a systemic challenge. Global supply chains involve multiple parties that must work with each other yet are often competing leaving little incentive to share timely and accurate data. Additionally, the lack of interoperability in the vast web of systems used exacerbates inefficiencies.

However, in recent years, the introduction of blockchain technology has increasingly addressed these limitations. Its growing adoption by the shipping industry is paving the way to trusted data-sharing by connecting stakeholders and ensuring secure, tamper-proof data exchange. One notable example is the Global Shipping Business Network (GSBN), a not-for-profit global consortium, which operates a blockchain-enabled infrastructure connecting different parties across global supply chains – including carriers, terminals, freight forwarders and other stakeholders involved in trade.

Innovation in Safe Transportation Protocols

In the context of Li-ion battery handling, the consortium has been collaborating with accredited testing laboratories, industry groups and carriers to support the needs of shippers without compromising on the safety of crew and vessels of carriers.

By expanding its ecosystem of China National Accreditation Service for Conformity Assessment (CNAS) accredited testing laboratories particularly in China, GSBN has enabled the development of a new protocol underpinned by its infrastructure. Shippers and certified laboratories can share information over their blockchain platform, that can then be directly verified by carriers. Those submissions and verifications are logged on blockchain creating an immutable audit trail. The aim is to create a new industry standard in safe transportation with a fully digital, trustworthy, streamlined and compliant alternative to the current paper-based process.

Stay Abreast of Regulation and Innovation

For manufacturers and supply chain partners, transporting critical cargo such as Li-ion batteries demand proactive planning and collaboration. Stricter regulations on battery recycling and material recovery require businesses to adapt their operations to remain compliant.

Misdeclarations or errors in documentation can lead to improper handling, jeopardising both safety and compliance. Businesses should ensure they stay ahead of evolving regulations as well as the innovation that is happening in safe transportation, and work with partners to explore how they can align to these. The industry should establish standardized protocols for handling critical cargoes to enable greater automation in document preparation and verification processes. In doing so, this not only helps enable a safer supply chain, but can also reduce potential loss, enable greater efficiency and higher insurance coverage.

Building a foundation of trust and accountability benefits all stakeholders and ensures a safer, more efficient supply chain. By adopting a proactive approach, businesses can mitigate risks, ensure compliance, and build more resilient supply chains.