• COVID-19 has grounded fishing fleets, halted processing plants and closed access to seafood markets.
• Seafood businesses with local sourcing and an online presence seem to have most resilience.
• Blockchain's ability to make supply chains more transparent and efficient could insure against such disruption.
The COVID-19 crisis has laid bare some of the challenges and inadequacies of the global seafood supply chain. The widespread pandemic has resulted in unprecedented disruption across the industry, with entire fleets tying up, seafood businesses shuttering their doors, and product stranded across the globe.
In some cases, such as with the Australian/New Zealand rock lobster, markets have dried up overnight; the lack of transportation infrastructure has made the export of live products all but impossible. Further down the supply chain, processing facilities have ceased or significantly curtailed operations in an effort to meet pandemic containment guidelines, or simply from a lack of raw materials.
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Even for the many purveyors of existing frozen and processed products, access to markets remains difficult, as restaurants and food service outlets either remain closed or restricted due to social distancing requirements. In one of the most heartbreaking cases, fishermen in India are literally dumping product back into the sea because there are no markets or storage. Projected sales and prices for seafood products are dour, with the plummet in price caused by an excess of product on the market, which is the case for the north-east US scallop industry, or the wild-caught shrimp fishery in the Gulf of Mexico.
The shuttering of many well-established seafood businesses notwithstanding, the time it will take for the industry to recover is of equal concern. Due to the nature of the global seafood supply chain and how the virus is spread, the supply chain is not expected to open up instantaneously. Thus, the fallout from the pandemic is expected to last weeks or months, if not a year, and some businesses might never recover to pre-COVID levels.
No part of the fishing industry has been immune. The pain is distributed across the entirety of the global seafood supply chain, from suppliers and distributors to wholesalers and restaurants, with little relief in the short-term sight. Part of the complexity of our increasingly mobile and global society, the dispersed nature of existing supply chains has unquestionably contributed to these difficulties – and will also make recovery exceedingly difficult.
Though there is no bright spot on the horizon, there are few glimmers of hope in the near distance. The seafood businesses that seem to be faring best are those with shorter, less complex, more direct, and more transparent supply chains. The most obvious example of that dynamic includes local industries that already had an established online presence, or were able to pivot quickly to provide online purchasing and direct delivery, such as Sitka Salmon Shares in Alaska and Dock to Dish in the north-east US.
It would be naive to think that the entire global seafood industry could or should follow that model, but could the digital-focused attributes of those companies somehow be translated into larger supply chains? What if we could develop a vaccine for the seafood industry that could help protect against the future impacts of these kinds of disruptions, pandemic or otherwise? Imagine if we had a technology in place that could not only ensure that supply meets demand more effectively, but that would allow seafood businesses to better meet the expectations of their customers, while simultaneously insulating against the worst impacts of a disruption and facilitating conditions that allow for faster recovery. The technology already exists and it is rapidly evolving and advancing.
Toothfish, tuna, prawns, salmon, and scallops are just a few of the products that have recently experimented with or implemented blockchain technology in the seafood sector. This transparency technology allows participants in the supply chain to see instantaneously, and at a glance, where a product is in the supply chain, where it is headed, and additional information like under what conditions it was produced or stored in. Blockchain technology, such as that used in the OpenSC platform, along with IoT and machine learning, offers such benefits.
Application Programming Interfaces (APIs) can be constructed that are capable of, for instance, flagging when a market becomes available, with the potential to automatically match sellers and buyers. Additionally, the technology could immutably connect sustainability and fair labour attributes to products in a way that prevents exploitation by unscrupulous actors during a crisis such as the COVID-19 pandemic.
Furthermore, blockchain is able to facilitate “smart contracts” that will execute contract deliverables – and payments – automatically. It will increase the efficiency of supply chain transactions in a way that better informs both producers and buyers such that they can make more informed and, thus, better decisions about how they run their business. These features could dramatically minimize the length and depth of the pain that our global seafood industry is currently experiencing.
Given the profound and devastating impact this pandemic has had on the global seafood industry, it is time to consider a revolution in the seafood supply chain that will allow participants to come out stronger, more innovative and more resilient than before.